SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM 10-Q

   [ x ]  QUARTERLY  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF  THE
          SECURITIES  EXCHANGE ACT of 1934 for the quarterly  period ended
          March 31, 2000, or ___________________

   [   ]  TRANSITION  REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES
          EXCHANGE ACT of 1934 for the transition period from _________________
          to ___________________.

Commission file number 001-12878
                       _________


                     TIME WARNER ENTERTAINMENT COMPANY, L.P.
             (Exact name of registrant as specified in its charter)

                  Delaware                                  13-3666692
          (State or other jurisdiction of                (I.R.S. Employer
        incorporation or organization)                     Identification
                                                              Number)


American Television and Communications
   Corporation                          Delaware                 13-2922502
Warner Communications Inc.              Delaware                 13-2696809
(Exact name of registrant a          (State or other         (I.R.S. Employer
 specified in its charter)           jurisdiction of     (Identification Number)
                                    incorporation or
                                      organization)


                              75 Rockefeller Plaza
                            New York, New York 10019
                                 (212) 484-8000

          (Address, including zip code, and telephone number, including
          area code, of each registrant's principal executive offices)


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



<PAGE>


                     TIME WARNER ENTERTAINMENT COMPANY L.P.
                            AND TWE GENERAL PARTNERS



                               INDEX TO FORM 10-Q


<TABLE>

                                                                                    Page
                                                                                    ----
                                                                                         TWE
                                                                                       General
                                                                                  TWE  Partners
                                                                                  ---  --------

<S>                                                                               <C>     <C>
PART I. FINANCIAL INFORMATION
Management's discussion and analysis of results of operations and
 financial condition ...........................................................   1      17
Consolidated balance sheets at March 31, 2000 and December 31, 1999.............   7      20
Consolidated statements of operations for the three months ended March 31, 2000
 and 1999.......................................................................   8      21
Consolidated statements of cash flows for the three months ended March 31, 2000
 and 1999.......................................................................   9      22
Consolidated statements of partnership capital and shareholders' equity for the
 three months ended March 31, 2000 and 1999.....................................  10      23
Notes to consolidated financial statements......................................  11      24




PART II. OTHER INFORMATION......................................................  30

</TABLE>



<PAGE>


                     TIME WARNER ENTERTAINMENT COMPANY, L.P.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

Description of Business

     Time Warner Entertainment Company, L.P. ("TWE" or the "Company") classifies
its business interests into four fundamental  areas: Cable Networks,  consisting
principally of interests in cable television programming;  Filmed Entertainment,
consisting   principally  of  interests  in  filmed  entertainment,   television
production  and  television  broadcasting;   Cable,  consisting  principally  of
interests in cable television systems; and Digital Media, consisting principally
of interests in Internet-related and digital media businesses.  TWE also manages
the cable  properties owned by Time Warner Inc. ("Time Warner") and the combined
cable television operations are conducted under the name of Time Warner Cable.

Use of EBITA


     TWE evaluates operating performance based on several factors, including its
primary  financial  measure of operating  income before noncash  amortization of
intangible  assets ("EBITA").  Consistent with  management's  financial focus on
controlling capital spending, EBITA measures operating performance after charges
for  depreciation.  In addition,  EBITA  eliminates the uneven effect across all
business segments of considerable  amounts of noncash amortization of intangible
assets recognized in business combinations accounted for by the purchase method.
These  business  combinations  include Time Warner's $14 billion  acquisition of
Warner  Communications Inc. in 1989 and $1.3 billion acquisition of the minority
interest in American  Television and  Communications  Corporation in 1992, which
created over $10 billion of intangible assets that generally are being amortized
over a twenty to forty  year  period.  The  exclusion  of  noncash  amortization
charges  also is  consistent  with  management's  belief  that TWE's  intangible
assets, such as cable television  franchises,  film and television libraries and
the goodwill  associated with its brands,  generally are increasing in value and
importance to TWE's business  objective of creating,  extending and distributing
recognizable brands and copyrights  throughout the world. As such, the following
comparative discussion of the results of operations of TWE includes, among other
factors, an analysis of changes in business segment EBITA. However, EBITA should
be considered in addition to, not as a substitute  for,  operating  income,  net
income and other measures of financial  performance  reported in accordance with
generally accepted accounting principles.


Transactions Affecting Comparability of Results of Operations


     As more fully described  herein,  the comparability of TWE's 1999 operating
results  has been  affected  by an  approximate  $215  million  net pretax  gain
recognized  in  connection  with  the  early  termination  and  settlement  of a
long-term, home video distribution agreement.

     In order to meaningfully  assess underlying  operating  trends,  management
believes that the results of operations for each period should be analyzed after
excluding the effects of significant  nonrecurring items. As such, the following
discussion  and analysis  focuses on amounts and trends  adjusted to exclude the
impact of this unusual  item.  However,  unusual  items may occur in any period.
Accordingly,  investors and other financial  statement users individually should
consider the types of events and  transactions  for which  adjustments have been
made.


<PAGE>


<TABLE>

                    TIME WARNER ENTERTAINMENT COMPANY, L.P.
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
         OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION--(Continued)


RESULTS OF OPERATIONS


        EBITA and operating income are as follows:

                                                              Three Months Ended March 31,
                                                              ----------------------------
                                                                                 Operating
                                                                EBITA              Income
                                                                -----            ---------
                                                           2000      1999       2000      1999
                                                          -----      ----       ----      ----
                                                                       (millions)
<S>                                                       <C>       <C>       <C>        <C>
Filmed Entertainment-Warner Bros.(a)...................   $144      $346      $114       $316
Broadcasting-The WB Network............................    (31)      (41)      (32)       (42)
Cable Networks-HBO.....................................    144       125       144        125
Cable..................................................    393       337       284        252
Digital Media..........................................    (13)        -       (13)         -
                                                          ----      ----      ----       ----
Total..................................................   $637      $767      $497       $651
                                                          ====      ====      ====       ====
________________
(a) 1999  results  include  a net  pretax  gain of $215  million  recognized  in
    connection with the early  termination  and settlement of a long-term,  home
    video distribution agreement.
</TABLE>

Consolidated Results


     TWE had  revenues of $3.297  billion and net income of $222 million for the
three months ended March 31,  2000,  compared to revenues of $2.934  billion and
net income of $312 million for the three months ended March 31, 1999.

     As discussed more fully below, TWE's net income decreased  principally as a
result of the inclusion in 1999 of a $215 million net pretax gain  recognized in
connection with the early termination and settlement of a long-term,  home video
distribution agreement.

     Excluding  this gain,  TWE's net income  increased  by $125 million to $222
million in 2000 from $97 million in 1999.  This  increase  principally  resulted
from an overall  increase in TWE's business  segment  operating income and lower
losses from certain investments accounted for under the equity method.

     As a U.S. partnership,  TWE is not subject to U.S. federal and state income
taxation.  Income and  withholding  taxes of $36 million and $28 million for the
three months ended March 31, 2000 and 1999, respectively, have been provided for
the operations of TWE's domestic and foreign subsidiary corporations.

Business Segment Results

     Filmed  Entertainment-Warner  Bros. Revenues increased to $1.553 billion in
2000,  compared to $1.380  billion in 1999.  EBITA  decreased to $144 million in
2000 from $346 million in 1999.  Operating  income  decreased to $114 million in
2000 from  $316  million  in 1999.  Revenues  benefited  from  increases  in the
distribution of both theatrical and television product,  offset in part by lower
revenues from consumer  product  operations.  Revenues from the  distribution of
theatrical product increased  principally due to higher worldwide home video and
DVD sales,  higher  revenues from  worldwide  television  exhibition  and higher
domestic  revenues  from  theatrical   exhibition,   offset  in  part  by  lower
international   revenues   from   theatrical   exhibition.   Revenues  from  the
distribution of television product increased principally due to higher aggregate
revenues from pay-TV, basic cable,  broadcast network and syndicated  television
exhibition.
<PAGE>

                      TIME WARNER ENTERTAINMENT COMPANY, L.P.
                       MANAGEMENT'S DISCUSSION AND ANALYSIS
         OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION--(Continued)


     Operating  results for 1999 included an approximate $215 million net pretax
gain  recognized in connection  with the early  termination  and settlement of a
long-term, home video distribution agreement. Excluding the effect of this item,
EBITA and operating income increased primarily as a result of the revenue gains,
offset in part by lower investment-related income.

     Broadcasting - The WB Network. Revenues increased to $102 million in
2000,  compared to $79 million in 1999.  EBITA improved to a loss of $31 million
in 2000 from a loss of $41 million in 1999.  Operating  losses  decreased to $32
million in 2000 from $42 million in 1999.  Revenues  increased  principally as a
result of one  additional  night of prime-time  programming in comparison to the
prior year and advertising  rate increases,  offset in part by lower  prime-time
television  ratings.  Prime-time  television ratings were negatively affected by
lower household delivery associated with the WGN Superstation  discontinuing its
carriage of The WB  Network's  programming  beginning  in the fall of 1999.  The
EBITA and operating loss improvements were due to the revenue gains,  which more
than offset higher  programming  costs associated with the expanded  programming
schedule.

     Cable Networks-HBO. Revenues increased to $554 million in 2000, compared to
$526 million in 1999.  EBITA and operating  income  increased to $144 million in
2000 from $125 million in 1999. Revenues benefited primarily from an increase in
subscriptions.  EBITA and  operating  income  increased  principally  due to the
revenue gains and increased cost savings, offset in part by lower gains from the
sale of certain investments.

     Cable.  Revenues  increased to $1.231  billion in 2000,  compared to $1.074
billion in 1999.  EBITA  increased  to $393 million in 2000 from $337 million in
1999.  Operating  income  increased to $284 million in 2000 from $252 million in
1999. Revenues increased due to growth in basic cable subscribers,  increases in
basic cable rates,  increases in  advertising  revenues and  increases  from the
deployment of digital cable and high-speed online services.  EBITA and operating
income   increased   principally   as  a  result  of  the   revenue   gains  and
pension-related  cost savings,  offset in part by higher  programming  costs and
higher depreciation related to capital spending.

     Digital Media.  Digital Media operating  results  reflect costs  associated
with the fourth quarter 1999 start-up of TWE's digital media businesses. Digital
Media had $13 million of operating losses on $1 million of revenues in 2000. Due
to the start-up nature of these  businesses,  losses are expected to continue in
2000.

     Interest and Other, Net. Interest and other, net, decreased to $180 million
of  expense in 2000,  compared  to $220  million  of  expense in 1999.  Interest
expense increased to $144 million in 2000, compared to $137 million in 1999 as a
result of higher market interest rates on variable-rate debt. Other expense, net
decreased to $36 million in 2000, compared to $83 million in 1999. This decrease
principally related to lower losses from certain investments accounted for under
the equity method.

     Minority  Interest.  Minority  interest expense decreased to $40 million in
2000, compared to $73 million in 1999.  Minority interest decreased  principally
due to a higher allocation of losses to a minority partner in The WB Network.


<PAGE>

                    TIME WARNER ENTERTAINMENT COMPANY, L.P.
                       MANAGEMENT'S DISCUSSION AND ANALYSIS
         OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION--(Continued)


FINANCIAL CONDITION AND LIQUIDITY
March 31, 2000


Financial Condition


     At March 31, 2000,  TWE had $6.7 billion of debt,  $360 million of cash and
equivalents  (net debt of $6.3  billion) and $6.3 billion of partners'  capital.
This compares to $6.7 billion of debt, $517 million of cash and equivalents (net
debt of $6.2  billion)  and $7.1  billion of  partners'  capital at December 31,
1999.

Cash Flows

     During the first three months of 2000,  TWE's cash  provided by  operations
amounted to $776 million and reflected  $637 million of business  segment EBITA,
$215  million of noncash  depreciation  expense  and $121  million  related to a
decrease in working  capital  requirements,  other  balance  sheet  accounts and
noncash  items,  less $157 million of interest  payments,  $19 million of income
taxes, $19 million of corporate expenses and $2 million of proceeds repaid under
TWE's asset securitization  program. Cash provided by operations of $788 million
in the first three months of 1999  reflected  $767  million of business  segment
EBITA, $192 million of noncash depreciation expense and $44 million related to a
decrease in working  capital  requirements,  other  balance  sheet  accounts and
noncash  items,  less $144 million of interest  payments,  $22 million of income
taxes, $18 million of corporate expense and $31 million of proceeds repaid under
TWE's asset securitization program.

     Cash used by  investing  activities  was $599  million  in the first  three
months of 2000, compared to $322 million in 1999,  principally as a result of an
increase  in cash used for  investments  and  acquisitions  and an  increase  in
capital  expenditures.  Capital  expenditures  increased  to $391 million in the
first three months of 2000, compared to $305 million in 1999.

     Cash used by financing activities was $334 million in the first three
months  of 2000,  compared  to $232  million  in  1999.  The use of cash in 2000
principally related to $308 million of capital distributions to Time Warner. The
use of cash in 1999 principally  resulted from the redemption of preferred stock
of a  subsidiary  at an  aggregate  cost of $217 million and the payment of $154
million  of  capital  distributions  to Time  Warner,  offset  in part by a $157
million increase in net borrowings.

     Management  believes that TWE's  operating cash flow,  cash and equivalents
and  additional  borrowing  capacity  are  sufficient  to fund its  capital  and
liquidity needs for the foreseeable future.

Cable Capital Spending


     Time Warner Cable has been  engaged in a plan to upgrade the  technological
capability  and  reliability  of its cable  television  systems  and develop new
services, which it believes will position the business for sustained,  long-term
growth. Capital spending by TWE's Cable division amounted to $360 million in the
three  months  ended March 31,  2000,  compared to $276  million in 1999.  Cable
capital spending for the remainder of 2000 is budgeted to be approximately  $1.3
billion,  reflecting  higher  spending on variable  capital to facilitate a more
aggressive  roll-out of Time Warner Cable's popular digital cable and high-speed
online services.  Capital spending is expected to continue to be funded by cable
operating cash flow.


<PAGE>

                     TIME WARNER ENTERTAINMENT COMPANY, L.P.
                       MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION--(Continued)


Warner Bros. Backlog


     Warner Bros.'s  backlog,  representing the amount of future revenue not yet
recorded from cash  contracts for the  licensing of  theatrical  and  television
product  for  pay  cable,  basic  cable,   network  and  syndicated   television
exhibition,  amounted  to $2.749  billion at March 31, 2000  (including  amounts
relating to TWE's cable television networks of $331 million and to Time Warner's
cable  television  networks  of $558  million),  compared  to $3.033  billion at
December 31, 1999 (including amounts relating to TWE's cable television networks
of $365 million and $599 million to Time Warner's cable television networks).

     Because  backlog  generally  relates  to  contracts  for the  licensing  of
theatrical  and  television  product  which  have  already  been  produced,  the
recognition of revenue for such completed  product is principally only dependent
upon the commencement of the availability period for telecast under the terms of
the related licensing agreement.  Cash licensing fees are received  periodically
over the term of the related  licensing  agreements or on an  accelerated  basis
using a $500 million  securitization  facility. The portion of backlog for which
cash has not already been received has significant off-balance sheet asset value
as a source of future  funding.  As of March 31, 2000,  including  cash received
under the  securitization  facility and other advanced  payments,  approximately
$600 million of cash licensing fees had been collected against the backlog.  The
backlog excludes advertising barter contracts, which are also expected to result
in the future  realization  of revenues and cash through the sale of advertising
spots received under such contracts.

Caution Concerning Forward-Looking Statements


     The SEC  encourages  companies to disclose  forward-looking  information so
that  investors  can better  understand a company's  future  prospects  and make
informed investment decisions. This document,  together with management's public
commentary related thereto,  contains such  "forward-looking  statements" within
the  meaning  of  the  Private   Securities   Litigation  Reform  Act  of  1995,
particularly statements  anticipating future growth in revenues,  EBITA and cash
flow. Words such as "anticipate,"  "estimate," "expects," "projects," "intends,"
"plans,"  "believes" and words and terms of similar substance used in connection
with any discussion of future operating or financial  performance  identify such
forward-looking  statements.  Those forward-looking  statements are management's
present expectations of future events. As with any projection or forecast,  they
are  inherently  susceptible  to changes in  circumstances,  and TWE is under no
obligation to (and expressly  disclaims any such  obligation to) update or alter
its  forward-looking  statements,  whether  as a  result  of such  changes,  new
information, future events or otherwise.

     TWE operates in highly  competitive,  consumer driven and rapidly  changing
media and entertainment  businesses that are dependent on government  regulation
and  economic,  political,  social  conditions  in the  countries  in which they
operate,  consumer  demand  for  their  products  and  services,   technological
developments and (particularly in view of technological  changes)  protection of
their intellectual property rights. TWE's actual results could differ materially
from management's  expectations because of changes in such factors.  Some of the
other  factors  that also  could  cause  actual  results  to differ  from  those
contained in the  forward-looking  statements  include those identified in TWE's
other filings with the SEC and:

 .    For TWE's cable business,  more  aggressive than expected  competition
     from  new   technologies   and  other   types  of  video   programming
     distributors,   including   DBS  and  DSL;   increases  in  government
     regulation of basic cable or equipment rates or other terms of service
     (such  as  "digital  must-carry"  or  common  carrier   requirements);
     increased  difficulty in obtaining franchise renewals;  the failure of
     new equipment  (such as digital  set-top  boxes) or services  (such as
     digital cable and high-speed  on-line services or telephony over cable
     or  video on  demand)  to  function  properly,  to  appeal  to  enough
     consumers or to be available at
<PAGE>

                     TIME WARNER ENTERTAINMENT COMPANY, L.P.
                       MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION--(Continued)


    reasonable prices and to be delivered in a timely fashion; and greater than
    expected increases in programming or other costs.

 .   For TWE's cable programming and television businesses, greater than expected
    programming or production  costs;  public and cable  operator  resistance to
    price increases (and the negative impact on premium programmers of increases
    in basic cable rates); increased regulation of distribution agreements;  the
    sensitivity  of  advertising  to  economic  cyclicality;  and  greater  than
    expected  fragmentation of consumer viewership due to an increased number of
    programming   services  or  the  increased  popularity  of  alternatives  to
    television.

 .   For TWE's film and  television  businesses,  their  ability to  continue  to
    attract  and select  desirable  talent  and  scripts  at  manageable  costs;
    increases in production costs  generally;  fragmentation of consumer leisure
    and  entertainment  time (and its possible negative effects on the broadcast
    and cable networks,  which are significant  customers of these  businesses);
    continued   popularity  of  merchandising;   and  the  uncertain  impact  of
    technological developments such as DVD and the Internet.

 .   For TWE's  digital media  businesses,  their ability to locate and invest in
    profitable businesses, to develop products and services that are attractive,
    accessible and commercially viable in terms of content, technology and cost;
    their ability to manage costs and generate revenues;  aggressive competition
    from existing and developing  technologies  and products;  the resolution of
    issues  concerning  commercial   activities  via  the  Internet,   including
    security,  reliability, cost, ease of use and access; and the possibility of
    increased government regulation of new media services.

     In  addition,  TWE's  overall  financial  strategy,   including  growth  in
operations,  maintaining its financial  ratios and  strengthened  balance sheet,
could be  adversely  affected  by  increased  interest  rates,  failure  to meet
earnings   expectations,   significant   acquisitions  or  other   transactions,
consequences of the euro  conversion and changes in TWE's plans,  strategies and
intentions.



<PAGE>

<TABLE>

                     TIME WARNER ENTERTAINMENT COMPANY, L.P.
                           CONSOLIDATED BALANCE SHEET
                                   (Unaudited)
                                                                           March 31,  December 31,
                                                                             2000        1999
                                                                           -----------------------
                                                                                 (millions)

<S>                                                                         <C>       <C>
ASSETS
Current assets
Cash and equivalents.......................................................  $  360    $  517
Receivables, including $1.165 and $1.354 billion due from Time Warner,
  less allowances of $685 and $668 million.................................   2,837     3,328
Inventories................................................................   1,192     1,220
Prepaid expenses...........................................................     195       246
                                                                             ------    ------

Total current assets.......................................................   4,584     5,311

Noncurrent inventories.....................................................   2,259     2,274
Investments................................................................     767       774
Property, plant and equipment..............................................   6,708     6,488
Cable television franchises................................................   5,558     5,464
Goodwill...................................................................   3,698     3,731
Other assets...............................................................     698       801
                                                                             ------    ------

Total assets............................................................... $24,272   $24,843
                                                                            =======   =======

LIABILITIES AND PARTNERS' CAPITAL
Current liabilities
Accounts payable........................................................... $ 1,636   $ 1,791
Participations and programming costs payable...............................   1,676     1,717
Debt due within one year...................................................       6         6
Other current liabilities, including $951 and $893 million due to
  Time Warner..............................................................   1,966     2,209
                                                                              -----     -----

Total current liabilities..................................................   5,284     5,723

Long-term debt.............................................................   6,648     6,655
Other long-term liabilities, including $2.014 and $1.292 billion due to
  Time Warner..............................................................   4,192     3,501
Minority interests.........................................................   1,805     1,815

Partners' capital
Contributed capital........................................................   7,349     7,338
Partnership deficit........................................................  (1,006)     (189)
                                                                             ------    ------

Total partners' capital....................................................   6,343     7,149
                                                                             ------    ------

Total liabilities and partners' capital.................................... $24,272   $24,843
                                                                            =======   =======


</TABLE>




See accompanying notes.



<PAGE>


                     TIME WARNER ENTERTAINMENT COMPANY, L.P.
                      CONSOLIDATED STATEMENT OF OPERATIONS
                                   (Unaudited)

<TABLE>

                                                                                Three Months
                                                                              Ended March 31,
                                                                              ---------------
                                                                              2000      1999
                                                                              ----      ----
                                                                                 (millions)


<S>                                                                          <C>       <C>
Revenues(a)................................................................  $3,297    $2,934

Cost of revenues(a)(b).....................................................  (2,080)   (1,818)
Selling, general and administrative(a)(b)..................................    (580)     (564)
Amortization of goodwill and other intangible assets.......................    (140)     (116)
Gain on early termination of video distribution agreement..................       -       215
                                                                              -----     -----

Business segment operating income..........................................     497       651
Interest and other, net(a).................................................    (180)     (220)
Corporate services(a)......................................................     (19)      (18)
Minority interest..........................................................     (40)      (73)
                                                                             ------    ------

Income before income taxes.................................................     258       340
Income taxes...............................................................     (36)      (28)
                                                                             ------     ------

Net income.................................................................  $  222    $  312
                                                                             ======    ======

---------------
(a) Includes the following income  (expenses)  resulting from  transactions with
    the partners of TWE and other related companies:
      Revenues.............................................................  $  93       $120
      Cost of revenues.....................................................    (63)       (78)
      Selling, general and administrative..................................    (24)        (4)
      Interest and other, net..............................................      3         20
      Corporate expenses...................................................    (19)       (18)

(b) Includes depreciation expense of:......................................   $215       $192
                                                                              ====       ====

</TABLE>












See accompanying notes.


<PAGE>


                     TIME WARNER ENTERTAINMENT COMPANY, L.P.
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                                   (Unaudited)
<TABLE>

                                                                                Three Months
                                                                              Ended March 31,
                                                                              ---------------
                                                                              2000      1999
                                                                              ----      ----
                                                                                (millions)
<S>                                                                          <C>       <C>
OPERATIONS
Net income.................................................................  $  222    $  312
Adjustments for noncash and nonoperating items:
   Depreciation and amortization...........................................     355       308
   Amortization of film costs..............................................     478       436
   Equity in losses of investee companies after distributions..............      31        63
Changes in operating assets and liabilities................................    (310)     (331)
                                                                              -----     -----

Cash provided by operations................................................     776       788
                                                                              -----     -----

INVESTING ACTIVITIES
Investments and acquisitions...............................................    (272)      (47)
Capital expenditures.......................................................    (391)     (305)
Investment proceeds........................................................      64        30
                                                                              -----     -----

Cash used by investing activities..........................................    (599)     (322)
                                                                              -----     -----

FINANCING ACTIVITIES
Borrowings.................................................................     894     1,160
Debt repayments............................................................    (901)   (1,003)
Redemption of preferred stock of subsidiary................................       -      (217)
Capital distributions......................................................    (308)     (154)
Other......................................................................     (19)      (18)
                                                                             ------     -----

Cash used by financing activities..........................................    (334)     (232)
                                                                             ------     -----

INCREASE (DECREASE) IN CASH AND EQUIVALENTS................................    (157)      234


CASH AND EQUIVALENTS AT BEGINNING OF PERIOD................................     517        87
                                                                              -----     -----

CASH AND EQUIVALENTS AT END OF PERIOD......................................  $  360    $  321
                                                                             ======    ======


</TABLE>










See accompanying notes.



<PAGE>



                     TIME WARNER ENTERTAINMENT COMPANY, L.P.
                  CONSOLIDATED STATEMENT OF PARTNERSHIP CAPITAL
                                   (Unaudited)


<TABLE>
                                                                              Three Months
                                                                             Ended March 31,
                                                                             ---------------
                                                                             2000      1999
                                                                             -----     ----
                                                                               (millions)

<S>                                                                          <C>       <C>
BALANCE AT BEGINNING OF PERIOD.............................................  $7,149    $5,107

Net income.................................................................     222       312
Other comprehensive income (loss)..........................................      (9)       41
                                                                            -------     -----
Comprehensive income.......................................................     213       353

Distributions..............................................................  (1,030)     (333)
Allocation of income to Time Warner General Partners' Senior Capital.......       -       (12)
Other......................................................................      11         -
                                                                            -------   -------

BALANCE AT END OF PERIOD...................................................  $6,343    $5,115
                                                                             ======    ======

</TABLE>

























See accompanying notes.



<PAGE>

                     TIME WARNER ENTERTAINMENT COMPANY, L.P.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)


1.   ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

     Time Warner  Entertainment  Company,  L.P., a Delaware limited  partnership
("TWE"),  classifies its business  interests into four fundamental  areas: Cable
Networks,  consisting principally of interests in cable television  programming;
Filmed   Entertainment,   consisting   principally   of   interests   in  filmed
entertainment,   television  production  and  television  broadcasting;   Cable,
consisting  principally of interests in cable  television  systems;  and Digital
Media, consisting principally of interests in Internet-related and digital media
businesses.

     Each of the business interests within Cable Networks, Filmed Entertainment,
Cable and Digital Media is important to TWE's  objective of  increasing  partner
value through the creation,  extension and  distribution of recognizable  brands
and copyrights  throughout the world. Such brands and copyrights include (1) HBO
and Cinemax, the leading  pay-television  services, (2) the unique and extensive
film,  television and animation libraries of Warner Bros. and trademarks such as
the  Looney  Tunes  characters  and  Batman,  (3)  The WB  Network,  a  national
broadcasting  network launched in 1995 as an extension of the Warner Bros. brand
and as an  additional  distribution  outlet for  Warner  Bros.'s  collection  of
children's cartoons and television programming, (4) Time Warner Cable, currently
the largest  operator of cable  television  systems in the U.S. and (5) Internet
websites, such as Entertaindom.com.

     The  operating  results of TWE's  various  business  segments are presented
herein as an indication of financial  performance  (Note 5). Except for start-up
losses  incurred in  connection  with The WB Network and  Digital  Media,  TWE's
principal business segments generate significant  operating income and cash flow
from  operations.  The cash  flow from  operations  generated  by such  business
segments is considerably  greater than their operating income due to significant
amounts of noncash  amortization of intangible assets recognized  principally in
Time  Warner  Inc.'s  ("Time   Warner")  $14  billion   acquisition   of  Warner
Communications Inc. ("WCI") in 1989 and $1.3 billion acquisition of the minority
interest in American Television and Communications  Corporation ("ATC") in 1992,
a portion  of which cost was  allocated  to TWE upon the  capitalization  of the
partnership.  Noncash  amortization  of  intangible  assets  recorded  by  TWE's
business segments amounted to $140 million in 2000 and $116 million in 1999.

     Certain of Time Warner's wholly owned subsidiaries collectively own general
and limited  partnership  interests in TWE  consisting of 74.49% of the pro rata
priority  capital  ("Series A Capital") and residual  equity capital  ("Residual
Capital"),  and 100% of the junior priority  capital  ("Series B Capital").  The
remaining  25.51%  limited  partnership  interests  in the Series A Capital  and
Residual  Capital  of TWE are  held by a  subsidiary  of  MediaOne  Group,  Inc.
("MediaOne").  Certain of Time Warner's subsidiaries are the general partners of
TWE ("Time Warner General Partners").

Basis of Presentation


     The accompanying  consolidated  financial  statements are unaudited but, in
the opinion of management, contain all the adjustments (consisting of those of a
normal recurring  nature)  considered  necessary to present fairly the financial
position and the results of operations and cash flows for the periods  presented
in  conformity  with  generally  accepted  accounting  principles  applicable to
interim periods.  The accompanying  consolidated  financial statements should be
read in conjunction with the audited  consolidated  financial  statements of TWE
included in its Annual Report on Form 10-K for the year ended  December 31, 1999
(the "1999 Form 10-K").


<PAGE>

                    TIME WARNER ENTERTAINMENT COMPANY, L.P.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                                   (Unaudited)

Reclassifications


     Certain  reclassifications  have been made to the  prior  year's  financial
statements to conform to the 2000 presentation.

2.   SIGNIFICANT TRANSACTIONS


America Online-Time Warner Merger


     In January 2000, Time Warner and America Online,  Inc.  ("America  Online")
announced  that they had entered into an  agreement  to merge (the  "Merger") by
forming a new holding  company named AOL Time Warner Inc.  ("AOL Time  Warner").
The Merger  will create a leading,  fully  integrated  media and  communications
company  that  will  combine  Time  Warner's  and  TWE's  collection  of  media,
entertainment   and  news  brands  and  its   technologically   advanced   cable
infrastructure   with  America  Online's  extensive   Internet   franchises  and
technology.   Management  believes  that  the  combined  company  will  be  well
positioned to expand the use of the Internet in consumers'  everyday  lives and,
accordingly,  provide Time Warner's and TWE's content  businesses with increased
access to consumers through a new and growing  distribution  medium.  Management
further  believes  that the Merger will result in  significant  new business and
other  value-creation  opportunities,  including  additional  opportunities  for
e-commerce,  growth in subscribers for each company's products and services, and
cost and operating efficiencies from cross-promotional and other opportunities.

     As a result of the Merger,  the former  shareholders of America Online will
have an approximate 55% interest in AOL Time Warner and the former  shareholders
of Time Warner will have an  approximate  45% interest in the  combined  entity,
expressed on a fully diluted  basis.  The Merger is expected to be accounted for
by AOL Time Warner as an acquisition of Time Warner under the purchase method of
accounting for business combinations.

     The  Merger  is  expected  to close in the fall of 2000 and is  subject  to
customary closing conditions, including the approval of the shareholders of each
of America Online and Time Warner and all necessary regulatory approvals.  There
can be no assurance that such approvals will be obtained.

1999 Gain on Termination of Video Distribution Agreement


     In  March  1999,  Warner  Bros.  and   Metro-Goldwyn-Mayer,   Inc.  ("MGM")
terminated a long-term  distribution  agreement  under which  Warner  Bros.  had
exclusive  worldwide  distribution  rights  for  MGM/United  Artists  home video
product.  In  connection  with the  early  termination  and  settlement  of this
distribution   agreement,   Warner  Bros.   recognized  a  net  pretax  gain  of
approximately  $215 million,  which has been  included in 1999 business  segment
operating income in the accompanying consolidated statement of operations.


<PAGE>


                    TIME WARNER ENTERTAINMENT COMPANY, L.P.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                                   (Unaudited)



3.   INVENTORIES

<TABLE>

        Inventories consist of:
                                                             March 31, 2000         December 31, 1999
                                                             ----------------      ------------------
                                                         Current     Noncurrent    Current    Noncurrent
                                                         -------     ----------    -------    ----------
                                                                           (millions)
<S>                                                       <C>            <C>        <C>           <C>
      Film costs:
         Released, less amortization...................   $  598         $  758     $  652        $  774
         Completed and not released....................       90             24         60            17
         In process and other..........................        7            513          8           532
         Library, less amortization....................        -            495          -           508
      Programming costs, less amortization.............      417            469        411           443
      Merchandise......................................       80              -         89             -
                                                          ------         ------     ------        ------
      Total............................................   $1,192         $2,259     $1,220        $2,274
                                                          ======         ======     ======        ======
</TABLE>

4.   PARTNERS' CAPITAL

     TWE is required to make  distributions to reimburse the partners for income
taxes at statutory rates based on their  allocable share of taxable income,  and
to reimburse Time Warner for stock options  granted to employees of TWE based on
the amount by which the market price of Time Warner Inc.  common  stock  exceeds
the option  exercise  price on the  exercise  date or,  with  respect to options
granted  prior to the TWE  capitalization  on June 30, 1992,  the greater of the
exercise  price or the $13.88  market price of Time Warner Inc.  common stock at
the time of the TWE capitalization.  TWE accrues a stock option distribution and
a  corresponding  liability with respect to unexercised  options when the market
price of Time Warner Inc. common stock increases  during the accounting  period,
and reverses previously accrued stock option distributions and the corresponding
liability when the market price of Time Warner Inc. common stock declines.

     During the three months  ended March 31, 2000,  TWE accrued $145 million of
tax-related distributions and $885 million of stock option distributions,  based
on closing prices of Time Warner Inc.  common stock of $100.00 at March 31, 2000
and $72.31 at December 31,  1999.  During the three months ended March 31, 1999,
TWE accrued $67 million of tax-related  distributions  and $266 million of stock
option distributions as a result of an increase at that time in the market price
of Time Warner Inc. common stock.  During the three months ended March 31, 2000,
TWE paid distributions to the Time Warner General Partners in the amount of $308
million,  consisting  of $145  million  of  tax-related  distributions  and $163
million of stock  option  related  distributions.  During the three months ended
March 31, 1999, TWE paid the Time Warner General  Partners  distributions in the
amount of $154 million,  consisting of $67 million of tax-related  distributions
and $87 million of stock option related distributions.

5.    SEGMENT INFORMATION


     TWE classifies its business  interests into four fundamental  areas:  Cable
Networks,  consisting principally of interests in cable television  programming;
Filmed   Entertainment,   consisting   principally   of   interests   in  filmed
entertainment,   television  production  and  television  broadcasting;   Cable,
consisting  principally of interests in cable  television  systems;  and Digital
Media, consisting principally of interests in Internet-related and digital media
businesses.  TWE's  Digital  Media  segment  commenced  operations in the fourth
quarter of 1999.

     Information as to the operations of TWE in different  business  segments is
set forth below based on the nature of the products and  services  offered.  TWE
evaluates  performance based on several factors,  of which the primary financial
measure is business  segment  operating  income before noncash  amortization  of
intangible assets ("EBITA"). The


<PAGE>

                    TIME WARNER ENTERTAINMENT COMPANY, L.P.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                                   (Unaudited)


accounting  policies  of the  business  segments  are  the  same  as  those
described  in the summary of  significant  accounting  policies  under Note 1 in
TWE's 1999 Annual Report on Form 10-K.  Intersegment  sales are accounted for at
fair value as if the sales were to third parties.

<TABLE>

                                                                                Three Months
                                                                               Ended March 31,
                                                                               ---------------
                                                                              2000        1999
                                                                              ----        ----
                                                                                 (millions)
<S>                                                                          <C>       <C>
Revenues
Filmed Entertainment-Warner Bros...........................................  $1,553    $1,380
Broadcasting-The WB Network................................................     102        79
Cable Networks-HBO.........................................................     554       526
Cable......................................................................   1,231     1,074
Digital Media..............................................................       1         -
Intersegment elimination...................................................    (144)     (125)
                                                                             ------    -------

Total......................................................................  $3,297    $2,934
                                                                             ======    ======

                                                                                Three Months
                                                                               Ended March 31,
                                                                               ---------------
                                                                              2000        1999
                                                                              ----        ----
                                                                                 (millions)
EBITA(a)
Filmed Entertainment-Warner Bros.(b).......................................    $144      $346
Broadcasting-The WB Network................................................     (31)      (41)
Cable Networks-HBO.........................................................     144       125
Cable......................................................................     393       337
Digital Media..............................................................     (13)        -
                                                                              -----   -------

Total......................................................................    $637      $767
                                                                               ====      ====
---------------
(a) EBITA   represents   business   segment   operating  income  before  noncash
    amortization  of  intangible   assets.   After  deducting   amortization  of
    intangible assets,  TWE's business segment operating income was $497 million
    in 2000 and $651 million in 1999.
(b) 1999  results  include  a net  pretax  gain of $215  million  recognized  in
    connection with the early  termination  and settlement of a long-term,  home
    video distribution agreement.

                                                                                Three Months
                                                                               Ended March 31,
                                                                               ---------------
                                                                              2000        1999
                                                                              ----        ----
                                                                                 (millions)
Depreciation of Property, Plant and Equipment
Filmed Entertainment-Warner Bros...........................................    $ 21     $  29
Broadcasting-The WB Network................................................       -         -
Cable Networks-HBO.........................................................       7         7
Cable......................................................................     186       156
Digital Media..............................................................       1         -
                                                                              -----    ------

Total......................................................................    $215      $192
                                                                               ====      ====

</TABLE>

<PAGE>

                    TIME WARNER ENTERTAINMENT COMPANY, L.P.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                                   (Unaudited)

<TABLE>

                                                                                Three Months
                                                                               Ended March 31,
                                                                               ---------------
                                                                              2000        1999
                                                                              ----        ----
                                                                                 (millions)
<S>                                                                            <C>       <C>
Amortization of Intangible Assets(a)
Filmed Entertainment-Warner Bros...........................................    $ 30     $  30
Broadcasting-The WB Network................................................       1         1
Cable Networks-HBO.........................................................       -         -
Cable......................................................................     109        85
Digital Media..............................................................       -         -
                                                                               ----     -----

Total......................................................................    $140      $116
                                                                               ====      ====
-------------------

(a)Includes amortization relating to all business combinations  accounted for by
   the purchase method,  including Time Warner's $14 billion  acquisition of WCI
   in 1989 and $1.3 billion acquisition of the minority interest in ATC in 1992.
</TABLE>



6.   COMMITMENTS AND CONTINGENCIES


     TWE is subject to certain  litigation  relating  to Six Flags.  In December
1998, a jury  returned an adverse  verdict in the Six Flags matter in the amount
of $454  million.  TWE and its former 51%  partner in Six Flags are  financially
responsible  for this  judgment.  Management  believes  that there were numerous
legal errors in the case and has appealed the verdict.  In management's  opinion
and  considering  the gain  deferred on the sale of Six Flags  described on page
F-41 of TWE's 1999 Form 10-K to cover this potential exposure, the resolution of
this  matter  is not  expected  to have a  material  effect  on TWE's  financial
statements.

     TWE is subject to numerous other legal proceedings. In management's opinion
and considering  established reserves,  the resolution of these matters will not
have a material effect, individually and in the aggregate, on TWE's consolidated
financial statements.

7.  ADDITIONAL FINANCIAL INFORMATION

Cash Flows

     Additional  financial  information  with  respect  to cash  flows  is as
follows:
<TABLE>

                                                                               Three Months
                                                                              Ended March 31,
                                                                              ---------------
                                                                              2000      1999
                                                                              ----      ----
                                                                                (millions)
<S>                                                                            <C>       <C>
        Cash payments made for interest....................................    $157      $144
        Cash payments made for income taxes, net...........................      19        22
        Noncash capital distributions......................................     885       266

</TABLE>

<PAGE>

                    TIME WARNER ENTERTAINMENT COMPANY, L.P.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                                  (Unaudited)


Interest and Other, Net


        Interest and other, net, consists of:

<TABLE>

                                                                               Three Months
                                                                              Ended March 31,
                                                                              ---------------
                                                                              2000      1999
                                                                              ----      ----
                                                                                (millions)
<S>                                                                          <C>      <C>
        Interest expense...................................................  $(144)   $(137)
        Other investment-related activity, principally net losses on
         corporate-related equity investees................................    (14)     (66)
        Corporate finance-related activity, including losses on asset
         securitization programs...........................................     (7)      (9)
        Miscellaneous......................................................    (15)      (8)
                                                                             -----   ------
        Total interest and other, net......................................  $(180)   $(220)
                                                                             =====    =====

</TABLE>


<PAGE>


                              TWE GENERAL PARTNERS
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION


     On June 30, 1992,  thirteen direct or indirect  subsidiaries of Time Warner
Companies,  Inc. ("TW Companies")  contributed the assets and liabilities or the
rights  to  the  cash  flows  of  substantially  all  of TW  Companies's  Filmed
Entertainment-Warner  Bros.,  Cable  Networks-HBO  and Cable  businesses to Time
Warner Entertainment  Company, L.P., a Delaware limited partnership ("TWE"), for
general  partnership  interests,  and each general partner guaranteed a pro rata
portion of  substantially  all of TWE's debt and accrued  interest  based on the
relative  fair value of the net assets  each  contributed  to TWE (the  "General
Partner  Guarantees").  Since  then,  eleven of the  thirteen  original  general
partners have been merged or dissolved into the other two. Warner Communications
Inc. ("WCI") and American Television and Communications  Corporation ("ATC") are
the two remaining  general  partners of TWE. They have  succeeded to the general
partnership  interests  and have assumed the General  Partner  Guarantees of the
eleven former general partners.

     Set forth below is a discussion of the results of operations  and financial
condition of WCI, the only General Partner with independent business operations.
WCI conducts substantially all of TW Companies's Music operations, which include
copyrighted  music from many of the world's  leading  recording  artists that is
produced and distributed by a family of established record labels such as Warner
Bros.  Records,   Atlantic  Records,  Elektra  Entertainment  and  Warner  Music
International.  The  financial  position  and results of  operations  of ATC are
principally   derived  from  its  investments  in  TWE,  TW  Companies,   Turner
Broadcasting  System, Inc. and Time Warner Telecom LLC, and its revolving credit
agreement with TW Companies.  Capitalized  terms are as defined and described in
the accompanying consolidated financial statements, or elsewhere herein.

Use of EBITA


     WCI evaluates operating performance based on several factors, including its
primary  financial  measure of operating  income before noncash  amortization of
intangible  assets ("EBITA").  Consistent with  management's  financial focus on
controlling capital spending, EBITA measures operating performance after charges
for depreciation.  The exclusion of noncash  amortization  charges is consistent
with management's  belief that WCI's intangible assets, such as music catalogues
and  copyrights  and the  goodwill  associated  with its brands,  generally  are
increasing  in value and  importance  to WCI's  business  objective of creating,
extending and  distributing  recognizable  brands and copyrights  throughout the
world.  As  such,  the  following  comparative  discussion  of  the  results  of
operations  of WCI  includes,  among  other  factors,  an analysis of changes in
business segment EBITA. However,  EBITA should be considered in addition to, not
as a  substitute  for,  operating  income,  net  income  and other  measures  of
financial  performance reported in accordance with generally accepted accounting
principles.

RESULTS OF OPERATIONS


     WCI's  operating  results for 1999  reflect a change in the way  management
evaluates its investment in the Columbia House Company  Partnerships  ("Columbia
House"),  an  equity  investee.   Effective  on  January  1,  2000,   management
reclassified  WCI's  share of the  operating  results  of  Columbia  House  from
business  segment   operating  income  to  interest  and  other,   net,  in  the
accompanying statement of operations.  This reclassification  resulted primarily
from the planned restructuring of Columbia House's traditional  direct-marketing
business and an increasing dependency on the sale of video product.

     WCI had revenues of $917 million and a net loss of $1 million for the three
months ended March 31, 2000, compared to revenues of $936 million and net income
of $118 million for the three months  ended March 31, 1999.  EBITA  decreased to
$80 million in 2000 from $89 million in 1999 after giving effect to the Columbia
House
<PAGE>


                              TWE GENERAL PARTNERS
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION--(Continued)


reclassification  described  earlier.  Operating  income decreased to $21
million in 2000 from $27  million in 1999 after  giving  effect to the  Columbia
House  reclassification.  Revenues  decreased  primarily  due to lower  domestic
recorded   music  sales,   offset  in  part  by  increased   revenues  from  DVD
manufacturing operations. The revenue decline principally related to lower sales
of new releases and carryover product in comparison to the prior year. EBITA and
operating income  decreased  principally as a result of the decline in revenues,
offset  in part by  lower  artist  royalty  costs  and  higher  income  from DVD
manufacturing  operations.

     WCI's  equity in the pretax  income of TWE was $153  million  for the three
months ended March 31, 2000, compared to $202 million for the three months ended
March 31,  1999.  TWE's  pretax  income  decreased  in 2000 as  compared to 1999
principally  as a result of the  inclusion  of an  approximate  $215 million net
pretax gain  recognized in 1999 in  connection  with the early  termination  and
settlement of a long-term,  home video  distribution  agreement.  Excluding this
gain, TWE's pretax income increased to $258 million in 2000 from $125 million in
the prior year. This increase  principally  resulted from an overall increase in
business  segment  operating  income and lower losses from  certain  investments
accounted for under the equity method of accounting.

     Interest  and other,  net was $143  million of expense for the three months
ended  March 31,  2000,  compared  to $8 million of income for the three  months
ended March 31, 1999.  Interest expense was $2 million both in 2000 and in 1999.
There was other expense, net, of $141 million in 2000, compared to other income,
net, of $10 million in 1999. The decrease in other income,  net was  principally
because of a $115 million  noncash  pretax charge in 2000 to reduce the carrying
value of WCI's  investment  in Columbia  House and higher  losses  from  certain
investments accounted for under the equity method of accounting.

     The relationship  between income before income taxes and income tax expense
for the General Partners is principally affected by the amortization of goodwill
and certain  other  financial  statement  expenses that are not  deductible  for
income  tax  purposes.  Income  tax  expense  for each of the  General  Partners
includes all income taxes related to its allocable  share of partnership  income
and its equity in the income tax expense of corporate subsidiaries of TWE.

FINANCIAL CONDITION AND LIQUIDITY
March 31, 2000

Financial Condition

     WCI had $8.3 billion of equity at March 31, 2000,  compared to $8.7 billion
of equity at December 31, 1999. Cash and  equivalents  increased to $143 million
at March 31, 2000,  compared to $107  million at December  31, 1999.  WCI had no
borrowings  outstanding to TW Companies under its revolving  credit agreement at
the end of either period.

     ATC had $1.8 billion of equity at March 31, 2000,  compared to $2.1 billion
at December 31, 1999. Although ATC has no independent operations, it is expected
that  additional  tax-related  and  other  distributions  from  TWE,  as well as
availability  under ATC's  revolving  credit  agreement with TW Companies,  will
continue to be sufficient to satisfy ATC's  obligations  with respect to its tax
sharing agreement with TW Companies for the foreseeable future.

Cash Flows

     In the first three months of 2000, cash provided by WCI's operations of $92
million  reflected  $80 million of EBITA,  $20  million of noncash  depreciation
expense,  $183 million of  distributions  from TWE,  less $2 million of interest
<PAGE>


                              TWE GENERAL PARTNERS
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
          OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION--(Continued)



payments,  $15 million of income  taxes (net of $13 million  which was  received
from TW Companies under a tax sharing agreement), $31 million of proceeds repaid
under WCI's asset securitization program and $143 million related to an increase
in working capital requirements, other balance sheet accounts and noncash items.
In the first three months of 1999, WCI's cash provided by operations amounted to
$266  million  and  reflected  $89  million  of EBITA,  $17  million  of noncash
depreciation  expense,  $91 million of  distributions  from TWE, $125 million of
proceeds  received  under  WCI's  asset  securitization  program and $61 million
related to a decrease  in working  capital  requirements,  other  balance  sheet
accounts  and  noncash  items,  less $3 million of  interest  payments  and $114
million of income taxes ($85  million of which was paid to TW Companies  under a
tax sharing agreement).

     Cash used by investing activities was $35 million in the first three months
of 2000,  which was  comparable  to cash  used by  investing  activities  of $36
million in the first three months of 1999.

     Cash used by financing activities was $21 million in the first three months
of 2000, compared to $295 million in the first three months of 1999, principally
as a result of a decrease in advances to TW Companies,  offset in part by higher
dividend payments.

     Management   believes  that  WCI's   operating   cash  flow  and  borrowing
availability  under  its  revolving  credit  agreement  with  TW  Companies  are
sufficient to fund its capital and liquidity  needs for the  foreseeable  future
without  cash   distributions   from  TWE  above  those  permitted  by  existing
agreements.


     WCI and ATC have no  claims  on the  assets  and cash  flows of TWE  except
through the payment of certain reimbursements and cash distributions. During the
three months ended March 31, 2000,  the General  Partners  received an aggregate
$308  million  of  distributions,  consisting  of $145  million  of  tax-related
distributions and $163 million of stock option related distributions. During the
three months ended March 31, 1999,  the General  Partners  received an aggregate
$154 million of distributions from TWE, consisting of $67 million of tax-related
distributions  and $87 million of stock option  related  distributions.  Of such
aggregate distributions, WCI received $183 million during the three months ended
March 31, 2000 and $91 million in 1999 and ATC received $125 million  during the
three months ended March 31, 2000 and $63 million in 1999.


<PAGE>

<TABLE>

                              TWE GENERAL PARTNERS
                           CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
                                                        WCI                          ATC
                                               ----------------------     ------------------------
                                                March 31,    December 31,   March 31,    December 31,
                                                  2000         1999           2000           1999
                                                  ----         ----           ----           ----
                                                                   (millions)

<S>                                            <C>          <C>              <C>          <C>
ASSETS
Current assets
Cash and equivalents........................    $  143       $  107          $    -       $    -
Receivables, less allowances of $282 and
   $290 million.............................     1,162        1,528               -            -
Inventories.................................       156          155               -            -
Prepaid expenses............................       807          727               -            -
                                                ------       ------          ------        -----

Total current assets........................     2,268        2,517               -            -

Investments in and amounts due to and from TWE   2,702        2,476           2,142        2,170
Investments in TW Companies.................       103          103              60           60
Other investments...........................     1,348        1,497             453          449
Music catalogues, contracts and copyrights..       755          779               -            -
Goodwill....................................     3,577        3,612               -            -
Other assets, primarily property, plant and
   equipment................................       515          497               -            -
                                                ------       ------          ------        -----

Total assets................................   $11,268      $11,481          $2,655       $2,679
                                               =======      =======          ======       ======

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts and royalties payable..............   $ 1,099      $ 1,115         $     -       $    -
Other current liabilities...................       399          534               -            -
                                               -------      -------          ------        -----

Total current liabilities...................     1,498        1,649               -            -

Long-term liabilities, including $1,194, $766
  $837 and $542 million, respectively, due to
  TW Companies................................   1,458        1,095             837          542

Shareholders' equity
Common stock................................         1            1               1            1
Preferred stock of WCI, $.01 par value, 90,000
   shares outstanding and $90 million liquidation
   preference...............................         -            -               -            -
Paid-in capital.............................     9,932        9,926           2,341        2,338
Retained earnings (deficit).................      (371)         833            (124)         172
                                                ------     --------          ------       ------
                                                 9,562       10,760           2,218        2,511

Due from TW Companies, net..................      (664)      (1,437)            (64)         (38)
Reciprocal interest in TW Companies stock...      (586)        (586)           (336)        (336)
                                               -------       ------          ------       ------

Total shareholders' equity..................     8,312        8,737           1,818        2,137
                                               -------       ------          ------       ------

Total liabilities and shareholders' equity..   $11,268      $11,481          $2,655       $2,679
                                               =======      =======          ======       ======

See accompanying notes.

</TABLE>


<PAGE>


                              TWE GENERAL PARTNERS
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                          Three Months Ended March 31,
                                   (Unaudited)

<TABLE>

                                                                  WCI                     ATC
                                                           ----------------        ----------------
                                                           2000        1999        2000        1999
                                                           ----        ----        ----        ----
                                                                         (millions)

<S>                                                        <C>         <C>        <C>         <C>
Revenues(a)............................................    $917        $936       $   -       $   -
                                                           ----        ----       -----       -----

Cost of revenues(a)(b).................................    (461)       (485)          -           -
Selling, general and administrative(a)(b)..............    (376)       (362)          -           -
Amortization of goodwill and other intangibles.........     (59)        (62)          -           -
                                                          -----       -----       -----       -----

Business segment operating income......................      21          27           -           -
Equity in pretax income of TWE(a)......................     153         202         105         138
Interest and other, net(a).............................    (143)          8          10           4
                                                           ----       -----         ---       -----

Income before income taxes.............................      31         237         115         142
Income taxes (a).......................................     (32)       (119)        (48)        (61)
                                                          -----        ----         ---        ----

Net income (loss)......................................   $  (1)       $118        $ 67        $ 81
                                                          ======       ====        ====        ====
------------------
(a)  Includes the following income  (expenses)  resulting from transactions with
     Time Warner, TW Companies, TWE or equity investees of the General Partners:

     Revenues..........................................    $ 75        $ 64       $   -        $  -
     Cost of revenues..................................      (3)         (2)          -           -
     Selling, general and administrative...............       6          (1)          -           -
     Equity in pretax income of TWE....................     (33)        (16)          -           -
     Interest and other, net...........................       6          27           -           -
     Income taxes......................................      13         (85)        (33)        (50)

(b)  Includes depreciation expense of:.................    $ 20        $ 17       $   -       $   -
                                                           ====        ====       =====       =====


</TABLE>













See accompanying notes.



<PAGE>


                              TWE GENERAL PARTNERS
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                          Three Months Ended March 31,
                                   (Unaudited)




<TABLE>

                                                                  WCI                      ATC
                                                          --------------------       ----------------
                                                          2000            1999       2000        1999
                                                          ----            ----       ----        ----
                                                                             (millions)
<S>                                                       <C>           <C>          <C>       <C>
OPERATIONS
Net income (loss)......................................   $  (1)         $118         $ 67      $ 81
Adjustments for noncash and nonoperating items:
   Depreciation and amortization.......................      79            79            -         -
   Excess (deficiency) of distributions over equity in
      pretax income of TWE.............................      30          (111)          20       (75)
   Equity in losses (income) of other investee companies
      after distributions..............................      23            (1)          (4)        1
Changes in operating assets and liabilities............     (39)          181            9        (4)
                                                            ----         ----        -----     -----

Cash provided by operations............................      92           266           92         3
                                                           ----          ----         ----     -----

INVESTING ACTIVITIES
Investments and acquisitions...........................      (6)           (9)           -         -
Capital expenditures...................................     (29)          (27)           -         -
                                                            ----         ----        -----     -----

Cash used by investing activities......................     (35)          (36)           -         -
                                                           ----          ----        -----     -----

FINANCING ACTIVITIES
Dividends..............................................     (99)          (54)         (66)      (35)
Decrease (increase) in amounts due from TW Companies, net    78          (241)         (26)       32
                                                             --          ----          ---        --

Cash used by financing activities......................     (21)         (295)         (92)       (3)
                                                           ----          ----         ----      ----

INCREASE (DECREASE) IN CASH AND EQUIVALENTS............      36          (65)            -         -

CASH AND EQUIVALENTS AT BEGINNING OF PERIOD............     107          160             -         -
                                                           ----         ----         -----     -----

CASH AND EQUIVALENTS AT END OF PERIOD..................   $ 143         $ 95         $   -     $   -
                                                          =====         ====         =====     =====









See accompanying notes.

</TABLE>


<PAGE>


                              TWE GENERAL PARTNERS
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                          Three Months Ended March 31,
                                   (Unaudited)


<TABLE>

                                                                  WCI                       ATC
                                                          --------------------       ----------------
                                                          2000            1999       2000        1999
                                                          ----            ----       ----        ----
                                                                             (millions)

<S>                                                       <C>           <C>          <C>       <C>
BALANCE AT BEGINNING OF PERIOD.........................   $8,737        $7,701       $2,137    $1,482

Net income (loss)......................................       (1)          118           67        81
Other comprehensive income (loss)......................       17            (7)          (3)        8
                                                           -----         ------       ------    -----
Comprehensive income ..................................       16           111           64        89

Increase in stock option distribution liability to
   TW Companies(a).....................................     (525)         (158)        (360)     (108)
Dividends..............................................     (697)           (2)           -         -
Transfers to TW Companies, net.........................      773          (241)         (26)       32
Other..................................................        8             -            3         -
                                                          ------        ------      -------    ------

BALANCE AT END OF PERIOD...............................   $8,312        $7,411       $1,818    $1,495
                                                          ======        ======       ======    ======

------------------
(a)The General Partners record distributions to TW Companies and a corresponding
   receivable  from TWE as a result of the  stock  option  related  distribution
   provisions of the TWE partnership  agreement.  Stock option  distributions of
   $525  million and $158  million for WCI and $360 million and $108 million for
   ATC were  accrued in the first three  months of 2000 and 1999,  respectively,
   because of an increase in the market price of Time Warner  common stock (Note
   3).






</TABLE>













See accompanying notes.

<PAGE>



                              TWE GENERAL PARTNERS
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.   DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Description of Business

     On June 30, 1992,  thirteen direct or indirect  subsidiaries of Time Warner
Companies,  Inc. ("TW Companies")  contributed the assets and liabilities or the
rights  to  the  cash  flows  of  substantially  all  of TW  Companies's  Filmed
Entertainment-Warner  Bros.,  Cable  Networks-HBO  and Cable  businesses to Time
Warner Entertainment  Company, L.P., a Delaware limited partnership ("TWE"), for
general  partnership  interests,  and each general partner guaranteed a pro rata
portion of  substantially  all of TWE's debt and accrued  interest  based on the
relative  fair value of the net assets  each  contributed  to TWE (the  "General
Partner  Guarantees," see Note 4). Since then,  eleven of the thirteen  original
general  partners  have been  merged or  dissolved  into the other  two.  Warner
Communications   Inc.  ("WCI")  and  American   Television  and   Communications
Corporation  ("ATC") are the two  remaining  general  partners of TWE. They have
succeeded  to the general  partnership  interests  and have  assumed the General
Partner  Guarantees of the eleven former general  partners.  WCI, ATC and, where
appropriate,  the former general partners are referred to herein as the "General
Partners."

     WCI conducts  substantially all of TW Companies's  Music operations,  which
include  copyrighted  music from many of the world's leading  recording  artists
that is produced and  distributed by a family of established  record labels such
as Warner Bros.  Records,  Atlantic  Records,  Elektra  Entertainment and Warner
Music  International.  ATC  does  not  conduct  operations  independent  of  its
ownership interests in TWE and certain other investments.


Basis of Presentation


Interim Financial Statements


     The accompanying  consolidated  financial  statements are unaudited but, in
the opinion of management, contain all the adjustments (consisting of those of a
normal recurring  nature)  considered  necessary to present fairly the financial
position and the results of operations and cash flows for the periods  presented
in  conformity  with  generally  accepted  accounting  principles  applicable to
interim  periods.  The  accompanying  financial  statements  should  be  read in
conjunction with the audited  consolidated  financial  statements of the General
Partners  included  in TWE's  Annual  Report  on Form  10-K  for the year  ended
December 31, 1999 (the "1999 Form 10-K").

Reclassifications


     Certain  reclassifications  have been made to the  prior  year's  financial
information to conform to the 2000 presentation, including a reclassification of
WCI's  operating  results  for  1999  to  reflect  a  change  in how  management
classifies  WCI's share of the operating  results of the Columbia  House Company
Partnerships  ("Columbia  House"),  an equity investee.  Effective on January 1,
2000,  management  reclassified WCI's share of the operating results of Columbia
House from business segment  operating  income to interest and other,  net. This
reclassification  resulted primarily from the planned  restructuring of Columbia
House's traditional  direct-marketing  business and an increasing  dependency on
the sale of video product.

<PAGE>


                              TWE GENERAL PARTNERS
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                                   (Unaudited)


2.  SIGNIFICANT TRANSACTIONS


America Online-Time Warner Merger


     In January 2000, Time Warner and America Online,  Inc.  ("America  Online")
announced  that they had entered into an  agreement  to merge (the  "Merger") by
forming a new holding company named AOL Time Warner Inc. ("AOL Time Warner"). As
part of the Merger,  each issued and  outstanding  share of each class of common
stock of Time Warner will be converted into 1.5 shares of an identical series of
common stock of AOL Time Warner. In addition,  each issued and outstanding share
of each class of preferred stock of Time Warner will be converted into one share
of preferred stock of AOL Time Warner,  which will have substantially  identical
terms except that such shares will be convertible into approximately 6.25 shares
of AOL Time Warner common stock.  Lastly,  each issued and outstanding  share of
common stock of America  Online will be converted into one share of common stock
of AOL Time Warner.


     As a result of the Merger,  the former  shareholders of America Online will
have an approximate 55% interest in AOL Time Warner and the former  shareholders
of Time Warner will have an  approximate  45% interest in the  combined  entity,
expressed on a fully diluted  basis.  The Merger is expected to be accounted for
by AOL Time Warner as an acquisition of Time Warner under the purchase method of
accounting for business combinations.

     The  Merger  is  expected  to close in the fall of 2000 and is  subject  to
customary closing conditions, including the approval of the shareholders of each
of America Online and Time Warner and all necessary regulatory approvals.  There
can be no assurance that such approvals will be obtained.


Warner-EMI Music Merger


     In January 2000,  Time Warner and EMI Group plc ("EMI")  announced they had
entered  into an agreement to combine  their  global music  operations  into two
jointly owned ventures,  to be referred to collectively as Warner EMI Music. WCI
will control the ventures  through  majority board  representation,  among other
factors,  and will  account for the  transaction  under the  purchase  method of
accounting for business combinations.

     As  part  of the  transaction,  each  company  will  contribute  its  music
operations  to the  ventures,  subject  to a  comparable  amount of debt.  As of
December  31,  1999,  EMI  had  approximately  $1.5  billion  of net  debt.  EMI
shareholders   also  will  receive  an  aggregate,   special  cash  dividend  of
approximately  $1.3 billion.  This dividend is expected to be financed through a
combination  of  proceeds  from debt  incurred  or assumed by the  ventures  and
consideration  to be paid by Time Warner  directly to EMI for a new class of EMI
equity  securities.  The new class of EMI equity  securities  to be held by Time
Warner will convert automatically into an 8% common equity interest in EMI, on a
fully diluted basis, if EMI's share price reaches (pound)9 for a short period of
time within the first three-and-a-half years after closing.

     The transaction is expected to close by the end of 2000, subject to
customary closing conditions, including regulatory approvals and the approval of
EMI's  shareholders.  There  can be no  assurance  that such  approvals  will be
obtained.

Columbia House Investment Write-Down


     In July 1999, Time Warner  announced an agreement with Sony  Corporation of
America ("Sony") to merge their jointly owned music and video club operations of
Columbia House with CDNOW, Inc. ("CDNOW"), a music and video

<PAGE>

                              TWE GENERAL PARTNERS
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                                   (Unaudited)


e-commerce  company.  Since that time,  the parties had been  pursuing  the
receipt of regulatory approvals.  While awaiting these approvals,  the March 13,
2000  termination  date in the merger  agreement  was  reached,  and the parties
terminated the agreement. Accordingly, the merger will not occur.

     In lieu of the merger, Time Warner and Sony each committed $25.5 million of
funding  to CDNOW to help  support  the  future  growth  of its  business.  Each
company's funding will be in the form of a $10.5 million equity investment and a
$15 million long-term convertible debt interest.

     Time Warner and WCI are continuing to evaluate  strategic  alternatives for
Columbia House's operations. Those alternatives are focused primarily on ways to
improve  Columbia  House's  declining  operating  performance,  including online
initiatives,  joint ventures and other strategic  actions.  Management  believes
that such  strategies are important to achieve a turnaround in Columbia  House's
operating  performance  and to  position  it for  long-term  growth  in a highly
competitive and rapidly changing business environment.

     With the termination of the CDNOW merger in March 2000, the risk associated
with the timely execution of these strategies and the transformation of Columbia
House's traditional business model to an online one has increased.  As a result,
management has concluded that the decline in Columbia  House's business is going
to continue  through the near term. As such, WCI recorded a $115 million noncash
pretax charge  during the first quarter of 2000 to reduce the carrying  value of
its  investment in Columbia  House to an estimate of its fair value.  The charge
has been included in interest and other,  net, in the accompanying  consolidated
statement of operations.

3.   TWE
<TABLE>

     The  General  Partners'  investment  in and  amounts due to and from TWE at
March 31, 2000 and December 31, 1999 consists of the following:

        March 31, 2000                                                         WCI        ATC
        --------------                                                         ---        ---
                                                                                 (millions)
<S>                                                                          <C>       <C>
        Investment in TWE..................................................  $1,873    $1,322
        Stock option related distributions due from TWE....................   1,194       820
        Other net liabilities due to TWE, principally related to home
        video distribution                                                     (365)        -
                                                                             ------    ------
        Total..............................................................  $2,702    $2,142
                                                                             ======    ======

        December 31, 1999                                                      WCI        ATC
        -----------------                                                      ---        ---
                                                                                 (millions)
        Investment in TWE..................................................  $2,342    $1,644
        Stock option related distributions due from TWE....................     766       526
        Other net liabilities due to TWE, principally related to home video
        distribution                                                           (632)        -
                                                                             ------    ------
        Total..............................................................  $2,476    $2,170
                                                                             ======    ======
</TABLE>

Partnership Structure and Allocation of Income


     TWE is a Delaware limited partnership that was capitalized on June 30, 1992
to own and operate substantially all of the Filmed  Entertainment-Warner  Bros.,
Cable  Networks-HBO  and  Cable  businesses  previously  owned  by  the  General
Partners.  The General  Partners in the aggregate hold,  directly or indirectly,
63.27% of the pro rata priority capital ("Series A Capital") and residual equity
capital  ("Residual  Capital")  of TWE and 100% of the junior  priority  capital
("Series B Capital") of TWE. TW  Companies  holds 11.22% of the Series A Capital
and Residual Capital limited partnership interests. The remaining 25.51% limited
partnership  interests in the Series A Capital and  Residual  Capital of TWE are
held by a subsidiary of MediaOne Group, Inc. ("MediaOne").

<PAGE>


                              TWE GENERAL PARTNERS
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                                   (Unaudited)


     The TWE partnership  agreement provides for special  allocations of income,
loss and distributions of partnership capital,  including priority distributions
in the event of  liquidation.  No portion of TWE's net income has been allocated
to the limited partnership interests.

Summarized Financial Information of TWE

<TABLE>

        Set forth below is summarized financial information of TWE.
                                                                                Three Months
                                                                               Ended March 31,
                                                                                ---------------
                                                                              2000         1999
                                                                              ----         ----
                                                                                  (millions)
<S>                                                                          <C>         <C>
Operating Statement Information
Revenues...................................................................  $3,297      $2,934
Depreciation and amortization..............................................    (355)       (308)
Business segment operating income(a).......................................     497         651
Interest and other, net....................................................    (180)       (220)
Minority interest..........................................................     (40)        (73)
Income before income taxes.................................................     258         340
Net income.................................................................     222         312
------------------
(a) Includes a net pretax gain of approximately  $215 million recognized in 1999
    in connection with the early termination and settlement of a long-term, home
    video distribution agreement.

                                                                                Three Months
                                                                               Ended March 31,
                                                                                ---------------
                                                                              2000         1999
                                                                              ----         ----
                                                                                  (millions)
<S>                                                                         <C>          <C>
Cash Flow Information
Cash provided by operations................................................ $   776      $  788
Capital expenditures.......................................................    (391)       (305)
Investments and acquisitions...............................................    (272)        (47)
Investment proceeds........................................................      64          30
Borrowings.................................................................     894       1,160
Debt repayments............................................................    (901)     (1,003)
Redemption of preferred stock of subsidiary................................       -        (217)
Capital distributions......................................................    (308)       (154)
Other......................................................................     (19)        (18)
Increase (decrease) in cash and equivalents................................    (157)        234

                                                                             March 31,   December 31,
                                                                               2000          1999
                                                                             --------    ------------
                                                                                  (millions)

Balance Sheet Information
Cash and equivalents....................................................... $   360       $   517
Total current assets.......................................................   4,584         5,311
Total assets...............................................................  24,272        24,843
Total current liabilities..................................................   5,284         5,723
Long-term debt ............................................................   6,648         6,655
Minority interests.........................................................   1,805         1,815
Partners' capital..........................................................   6,343         7,149

Capital Distributions
</TABLE>


     The assets and cash flows of TWE are restricted by the TWE  partnership and
credit agreements and are unavailable for use by the partners except through the
payment of certain fees, reimbursements, cash distributions and loans,


<PAGE>


                              TWE GENERAL PARTNERS
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                                   (Unaudited)

which are subject to limitations.  At March 31, 2000 and December 31, 1999,
the  General   Partners  had  recorded   $2.014  billion  and  $1.292   billion,
respectively,  of stock  option  related  distributions  due from TWE,  based on
closing prices of Time Warner common stock of $100.00 and $72.31,  respectively.
The  General  Partners  are paid when the  options  are  exercised.  The General
Partners also receive  tax-related  distributions  from TWE on a current  basis.
During the three months ended March 31, 2000, the General Partners received cash
distributions from TWE in the amount of $308 million, consisting of $145 million
of  tax-related   distributions   and  $163  million  of  stock  option  related
distributions.  During  the three  months  ended  March 31,  1999,  the  General
Partners  received  cash  distributions  from TWE in the amount of $154 million,
consisting of $67 million of tax-related  distributions and $87 million of stock
option related distributions. Of such aggregate distributions, WCI received $183
million  during the first  three  months of 2000 and $91 million in 1999 and ATC
received  $125 million  during the first three months of 2000 and $63 million in
1999.

1999 Gain on Termination of Video Distribution Agreement


     In  March  1999,  Warner  Bros.  and   Metro-Goldwyn-Mayer,   Inc.  ("MGM")
terminated a long-term  distribution  agreement  under which  Warner  Bros.  had
exclusive  worldwide  distribution  rights  for  MGM/United  Artists  home video
product.  In  connection  with the  early  termination  and  settlement  of this
distribution   agreement,   Warner  Bros.   recognized  a  net  pretax  gain  of
approximately $215 million,  which has been included in 1999 operating income in
the accompanying consolidated statement of operations.

4.   GENERAL PARTNER GUARANTEES


     Each General  Partner has  guaranteed  a pro rata portion of  approximately
$5.3 billion of TWE's debt and accrued  interest at March 31, 2000, based on the
relative fair value of the net assets each General Partner (or its  predecessor)
contributed to TWE. Such  indebtedness  is recourse to each General Partner only
to the extent of its guarantee.  There are no restrictions on the ability of the
General Partner guarantors to transfer assets, other than TWE assets, to parties
that are not guarantors.

     The portion of TWE debt and accrued  interest at March 31, 2000 that was
guaranteed by each General Partner is set forth below:
<TABLE>

                                                                            Total Guaranteed by
                                                                           Each General Partner
                                                                           --------------------
        General Partner                                                        %         Amount
        ---------------                                                      -----       ------
                                                                             (dollars in millions)


<S>                                                                           <C>        <C>
        WCI...............................................................    59.27      $3,150
        ATC...............................................................    40.73       2,164
                                                                             ------      ------
        Total.............................................................   100.00      $5,314
                                                                             ======      ======
</TABLE>

5.             COMMITMENTS AND CONTINGENCIES


     WCI is  subject  to a  class  action  lawsuit  alleging  collusive  pricing
practices by the major record  companies in their  capacity as  distributors  of
compact discs to CD wholesalers and retailers.  The trial presently is scheduled
for the fall of 2000. Although management believes the case is without merit, an
adverse jury verdict  could result in a material loss to WCI. Due to the lack of
specificity to plaintiffs'  claims,  a range of loss is not determinable at this
time.

     The  General   Partners  and  TWE  are  also  subject  to  numerous   legal
proceedings, including certain litigation relating to Six Flags. In management's
opinion and considering  established  reserves,  the resolution of these matters
will not have a  material  effect,  individually  and in the  aggregate,  on the
consolidated financial statements of the General Partners.
<PAGE>

                              TWE GENERAL PARTNERS
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
                                   (Unaudited)



6.    ADDITIONAL FINANCIAL INFORMATION


     Additional financial information with respect to cash flows is as
follows:

<TABLE>

                                                                Three Months Ended March 31,
                                                                ----------------------------
                                                                      2000            1999
                                                                -------------     -----------
                                                                WCI       ATC     WCI     ATC
                                                                ---       ---     ---     ---
                                                                           (millions)

<S>                                                           <C>      <C>        <C>    <C>
        Cash payments made for interest.....................  $   2    $    -     $   3  $   -
        Cash payments made for income taxes, net............     15        33       114      50
        Tax-related distributions received from TWE.........     86        59        39      28
        Noncash capital distributions, net..................   (525)     (360)     (158)   (108)

     Noncash financing  activities in 2000 included the settlement of WCI's note
receivable  from TW  Companies  through  a WCI  dividend  in the  amount of $695
million to TW Companies.


</TABLE>


<PAGE>



                           Part II. Other Information


Item 1.   Legal Proceedings.

     Reference is made to the Consent  Order  entered into by Warner Music Group
with the Federal Trade Commission  (FTC) staff relating to its  investigation of
minimum  advertised  price (MAP)  programs  described  on pages I-20 and I-24 of
TWE's Annual  Report on Form 10-K for the year ended  December 31, 1999.  On May
10, 2000,  the FTC granted its initial  approval of the Consent Order as well as
similar Consent Orders for the other major record companies. Those Orders remain
subject to public comment and final approval by the FTC.


Item 6.  Exhibits and Reports on Form 8-K.

        (a)  Exhibits.
             --------

     The  exhibits  listed  on the  accompanying  Exhibit  Index  are  filed  or
incorporated  by reference  as a part of this report and such  Exhibit  Index is
incorporated herein by reference.

        (b)  Reports on Form 8-K.
             -------------------

        No Current  Report on Form 8-K was filed by TWE during the quarter ended
March 31, 2000.



<PAGE>


                     TIME WARNER ENTERTAINMENT COMPANY, L.P.
                            AND TWE GENERAL PARTNERS

                                   SIGNATURES



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

                         TIME WARNER ENTERTAINMENT COMPANY, L.P.
                         By: Warner Communications Inc.,
                              as General Partner


                         By:    /s/Joseph A. Ripp
                                ____________________________
                         Name:  Joseph A. Ripp
                         Title: Executive Vice President and
                                Chief Financial Officer

                         AMERICAN TELEVISION AND COMMUNICATIONS CORPORATION
                         WARNER COMMUNICATIONS INC.


                         By:    /s/Joseph A. Ripp
                                _____________________________
                         Name:  Joseph A. Ripp
                         Title: Executive Vice President and
                                Chief Financial Officer


Dated: May 15, 2000

<PAGE>


                                  EXHIBIT INDEX

                     Pursuant to Item 601 of Regulations S-K
                     ---------------------------------------




Exhibit No.    Description of Exhibit
-----------    ----------------------


10             Restated  Combination  Agreement  dated as of January  23,  2000,
               between Time Warner Inc. and EMI Group plc (which is incorporated
               herein  by  reference  to  Exhibit  10.2  to Time  Warner  Inc.'s
               Quarterly  Report on Form 10-Q for the  quarter  ended  March 31,
               2000 (File No. 1-12259)).


27             Financial Data Schedule.