<PAGE>
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                                 UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                   FORM 10-Q

                                   (MARK ONE)

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

     FOR THE PERIOD ENDED MARCH 31, 2001

                                       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 1-5706

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

                      METROMEDIA INTERNATIONAL GROUP, INC.

             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                            <C>
               DELAWARE                                     58-0971455
    (State or other jurisdiction of                      (I.R.S. Employer
    incorporation or organization)                     Identification No.)
</TABLE>

             ONE MEADOWLANDS PLAZA, EAST RUTHERFORD, NJ 07073-2137
             (Address and zip code of principal executive offices)

                                 (201) 531-8000

              (Registrant's telephone number, including area code)

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

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 / /

THE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING AS OF MAY 8, 2001 WAS
94,034,947.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
                      METROMEDIA INTERNATIONAL GROUP, INC.

                                    INDEX TO
                         QUARTERLY REPORT ON FORM 10-Q

                         PART I--FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                                                                PAGE
                                                              --------
<S>                                                           <C>
Item 1. Financial Statements (unaudited)

Consolidated Condensed Statements of Operations.............      2
Consolidated Condensed Balance Sheets.......................      3
Consolidated Condensed Statements of Cash Flows.............      4
Consolidated Condensed Statement of Stockholders' Equity....      5
Notes to Consolidated Condensed Financial Statements........      6

Item 2. Management's Discussion and Analysis of Financial
  Condition and Results of Operations.......................     24

Item 3. Quantitative and Qualitative Disclosures about
  Market Risk...............................................     58

                      PART II--OTHER INFORMATION

Item 1. Legal Proceedings...................................     60

Item 6. Exhibits and Reports on Form 8-K....................     63

Signature...................................................     64
</TABLE>

                                       1
<PAGE>
                      METROMEDIA INTERNATIONAL GROUP, INC.

                CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED
                                                                    MARCH 31,
                                                               -------------------
                                                                 2001       2000
                                                               --------   --------
<S>                                                            <C>        <C>
Revenues:
  Communications Group......................................   $ 33,155   $ 31,245
  Snapper...................................................     53,627     50,182
                                                               --------   --------
                                                                 86,782     81,427
Cost and expenses:
  Cost of sales and operating expenses--Communications
    Group...................................................     11,169      8,281
  Cost of sales and operating expenses--Snapper.............     34,136     32,619
  Selling, general and administrative.......................     34,585     34,413
  Depreciation and amortization.............................     18,460     16,191
                                                               --------   --------
Operating loss..............................................    (11,568)   (10,077)

Other income (expense):
  Interest expense..........................................     (7,511)    (7,928)
  Interest income...........................................      1,648        891
  Equity in income (losses) of unconsolidated investees.....     (3,806)       250
  Foreign currency loss.....................................       (334)      (478)
  Other income..............................................         30      2,500
                                                               --------   --------
                                                                 (9,973)    (4,765)
                                                               --------   --------
Loss before income tax expense and minority interest........    (21,541)   (14,842)
Income tax expense..........................................     (2,338)    (2,508)
Minority interest...........................................        (91)       819
                                                               --------   --------
Net loss....................................................    (23,970)   (16,531)
Cumulative convertible preferred stock dividend
  requirement...............................................     (3,752)    (3,752)
                                                               --------   --------
Net loss attributable to common stockholders................   $(27,722)  $(20,283)
                                                               ========   ========
Weighted average number of common shares--Basic.............     94,035     93,807
                                                               ========   ========
Loss per common share--Basic and Diluted:
  Net loss attributable to common stockholders..............   $  (0.29)  $  (0.22)
                                                               ========   ========
</TABLE>

     See accompanying notes to consolidated condensed financial statements.

                                       2
<PAGE>
                      METROMEDIA INTERNATIONAL GROUP, INC.

                     CONSOLIDATED CONDENSED BALANCE SHEETS

                      (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                MARCH 31,    DECEMBER 31,
                                                                  2001           2000
                                                               -----------   -------------
                                                               (UNAUDITED)
<S>                                                            <C>           <C>
ASSETS:
Current assets:
  Cash and cash equivalents.................................   $   65,895     $    80,236
  Accounts receivable:
    Snapper, net............................................       41,363          23,297
    Communications Group, net...............................       17,940          17,883
    Other, net..............................................          344             764
  Inventories...............................................       67,142          65,029
  Other assets..............................................       17,800          20,078
                                                               -----------    -----------
      Total current assets..................................      210,484         207,287
Investments in and advances to joint ventures:
  Eastern Europe and the republics of the former Soviet
    Union...................................................      113,502         117,908
Property, plant and equipment, net of accumulated
  depreciation..............................................      178,936         180,800
Intangible assets, less accumulated amortization............      216,374         224,819
Other assets................................................        5,343           5,305
                                                               -----------    -----------
      Total assets..........................................   $  724,639     $   736,119
                                                               ===========    ===========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
  Accounts payable..........................................   $   35,431     $    37,361
  Accrued expenses..........................................       81,839          81,514
  Current portion of long-term debt.........................        4,536           4,834
                                                               -----------    -----------
      Total current liabilities.............................      121,806         123,709
Long-term debt..............................................      247,583         230,036
Other long-term liabilities.................................        6,004           5,667
                                                               -----------    -----------
      Total liabilities.....................................      375,393         359,412
                                                               -----------    -----------
Minority interest...........................................       33,123          33,031
Commitments and contingencies
Stockholders' equity:
  7 1/4% Cumulative Convertible Preferred Stock.............      207,000         207,000
  Common Stock, $1.00 par value, authorized 400,000,000
    shares, issued and outstanding 94,034,947 shares at
    March 31, 2001 and December 31, 2000....................       94,035          94,035
  Paid-in surplus...........................................    1,102,769       1,102,769
  Accumulated deficit.......................................   (1,081,318)     (1,053,596)
  Accumulated other comprehensive loss......................       (6,363)         (6,532)
                                                               -----------    -----------
      Total stockholders' equity............................      316,123         343,676
                                                               -----------    -----------
      Total liabilities and stockholders' equity............   $  724,639     $   736,119
                                                               ===========    ===========
</TABLE>

     See accompanying notes to consolidated condensed financial statements.

                                       3
<PAGE>
                      METROMEDIA INTERNATIONAL GROUP, INC.

                CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

                                 (IN THOUSANDS)

                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                              THREE MONTHS ENDED
                                                                   MARCH 31,
                                                              -------------------
                                                                2001       2000
                                                              --------   --------
<S>                                                           <C>        <C>
Operating activities:
  Net loss..................................................  $(23,970)  $(16,531)
Items not requiring cash outlays:
  Equity in (income) losses of unconsolidated investees.....     3,806       (250)
  Depreciation and amortization.............................    18,460     16,191
  Other income..............................................        --     (2,500)
  Minority interest.........................................        91       (819)
  Amortization of interest..................................     4,838      4,488
Changes in:
  Accounts receivable.......................................   (17,703)    (9,792)
  Inventories...............................................    (2,113)      (211)
  Other assets and liabilities..............................     2,561     (2,297)
  Accounts payable and accrued expenses.....................    (1,701)     1,095
  Other operating activities, net...........................       204       (440)
                                                              --------   --------
    Cash used in operating activities.......................   (15,527)   (11,066)
                                                              --------   --------
Investing activities:
  Investments in and advances to joint ventures.............      (348)        --
  Distributions from joint ventures.........................       946     21,210
  Cash paid for acquisitions and additional equity in
    subsidiaries............................................    (2,104)    (2,437)
  Additions to property, plant and equipment................    (6,063)    (4,759)
  Cash received on settlement of option.....................        --     11,000
                                                              --------   --------
    Cash provided by (used in) investing activities.........    (7,569)    25,014
                                                              --------   --------
Financing activities:
  Proceeds from issuance of debt............................    15,318      5,598
  Payments on notes and debt................................    (2,811)    (4,697)
  Proceeds from issuance of common stock related to
    incentive plans.........................................        --      1,153
  Preferred stock dividends paid............................    (3,752)    (3,752)
                                                              --------   --------
    Cash provided by (used in) financing activities.........     8,755     (1,698)
                                                              --------   --------
Net increase (decrease) in cash and cash equivalents........   (14,341)    12,250
Cash and cash equivalents at beginning of period............    80,236     50,985
                                                              --------   --------
Cash and cash equivalents at end of period..................  $ 65,895   $ 63,235
                                                              ========   ========
</TABLE>

     See accompanying notes to consolidated condensed financial statements.

                                       4
<PAGE>
                      METROMEDIA INTERNATIONAL GROUP, INC.

            CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY

                      (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

                                  (UNAUDITED)
<TABLE>
<CAPTION>
                                          7 1/4%
                                        CUMULATIVE
                                       CONVERTIBLE
                                     PREFERRED STOCK          COMMON STOCK                                    ACCUMULATED
                                   --------------------   ---------------------                                  OTHER
                                   NUMBER OF              NUMBER OF                PAID-IN     ACCUMULATED   COMPREHENSIVE
                                    SHARES      AMOUNT      SHARES      AMOUNT     SURPLUS       DEFICIT     INCOME (LOSS)
                                   ---------   --------   ----------   --------   ----------   -----------   -------------
<S>                                <C>         <C>        <C>          <C>        <C>          <C>           <C>
Balances, December 31, 1999......  4,140,000   $207,000   93,284,589   $93,285    $1,102,308   $(1,014,284)     $(3,374)

Net loss.........................        --          --           --        --            --      (16,531)           --

Other comprehensive income, net
  of tax:

Foreign currency translation
  adjustments....................        --          --           --        --            --           --          (296)

Total comprehensive loss.........

Issuance of stock related to
  incentive plans................        --          --      739,709       739           414           --            --

Dividends on 7 1/4% cumulative
  convertible preferred stock....        --          --           --        --            --       (3,752)           --
                                   ---------   --------   ----------   -------    ----------   -----------      -------

Balances, March 31, 2000.........  4,140,000   $207,000   94,024,298   $94,024    $1,102,722   $(1,034,567)     $(3,670)
                                   =========   ========   ==========   =======    ==========   ===========      =======

Balances, December 31, 2000......  4,140,000   $207,000   94,034,947   $94,035    $1,102,769   $(1,053,596)     $(6,532)

Net loss.........................        --          --           --        --            --      (23,970)           --

Other comprehensive income, net
  of tax:

Foreign currency translation
  adjustments....................        --          --           --        --            --           --           169

Total comprehensive loss.........

Dividends on 7 1/4% cumulative
  convertible preferred stock....        --          --           --        --            --       (3,752)           --
                                   ---------   --------   ----------   -------    ----------   -----------      -------

Balances, March 31, 2001.........  4,140,000   $207,000   94,034,947   $94,035    $1,102,769   $(1,081,318)     $(6,363)
                                   =========   ========   ==========   =======    ==========   ===========      =======

<CAPTION>

                                       TOTAL
                                   COMPREHENSIVE
                                       LOSS
                                   -------------
<S>                                <C>
Balances, December 31, 1999......    $     --
Net loss.........................     (16,531)
Other comprehensive income, net
  of tax:
Foreign currency translation
  adjustments....................        (296)
                                     --------
Total comprehensive loss.........    $(16,827)
                                     ========
Issuance of stock related to
  incentive plans................
Dividends on 7 1/4% cumulative
  convertible preferred stock....
Balances, March 31, 2000.........
Balances, December 31, 2000......    $     --
Net loss.........................     (23,970)
Other comprehensive income, net
  of tax:
Foreign currency translation
  adjustments....................         169
                                     --------
Total comprehensive loss.........    $(23,801)
                                     ========
Dividends on 7 1/4% cumulative
  convertible preferred stock....
Balances, March 31, 2001.........
</TABLE>

     See accompanying notes to consolidated condensed financial statements.

                                       5
<PAGE>
                      METROMEDIA INTERNATIONAL GROUP, INC.

              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION AND LIQUIDITY

BASIS OF PRESENTATION

The accompanying consolidated financial statements include the accounts of
Metromedia International Group, Inc. ("MMG" or the "Company") and its
wholly-owned subsidiaries, Metromedia International Telecommunications, Inc.,
Snapper Inc. and PLD Telekom Inc. PLD Telekom, Metromedia International
Telecommunications ("MITI") and its majority owned subsidiary, Metromedia China
Corporation ("MCC"), are together known as the "Communications Group". All
significant intercompany transactions and accounts have been eliminated.

On November 8, 2000, the Company's Board of Directors authorized management to
evaluate structural alternatives to separate its Snapper, Metromedia China and
radio and cable businesses from its telephony assets. These alternatives may
include sales of certain or all of these assets to third parties or the spin-off
of certain or all of these assets as independent companies to MMG's
stockholders. On March 1, 2001, the Company engaged two independent,
internationally recognized investment banking firms to advise it on these
various alternatives.

Although the Company is engaged in discussions regarding the restructuring with
its and Snapper's banks and bondholders, the Company's Board of Directors has
not approved any definitive transaction. Any final action remains subject to a
number of conditions in addition to final Board of Director approval, including,
for certain transactions, obtaining the consent of the Company's and Snapper's
banks and bondholders. As a result, the financial statements have been prepared
assuming the Company continues to operate each of its lines of business. The
Company does not currently believe that any spin-off of its businesses could be
accomplished on a tax-free basis.

Investments in other companies, including those of the Communications Group's
joint ventures that are not majority owned, or in which the Company does not
have control but exercises significant influence, are accounted for using the
equity method. The Company reflects its net investments in joint ventures under
the caption "Investments in and advances to joint ventures."

All of the Communications Group's joint ventures other than the businesses of
PLD Telekom and Comstar report their financial results on a three-month lag.
Therefore, the Communications Group's financial results for March 31 include the
financial results for those joint ventures for the three months ending
December 31. The Company has deferred its decision on reducing or eliminating
the three-month reporting lag for certain of its principal businesses until it
has completed its evaluation of structural alternatives as noted above.

The accompanying interim consolidated condensed financial statements have been
prepared without audit pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations although the Company believes that the disclosures made are adequate
to make the information presented not misleading. These financial statements
should be read in conjunction with the consolidated financial statements and
related footnotes included in the Company's Annual Report on Form 10-K/A
Amendment No. 1 for the year ended December 31, 2000. In the opinion of
management, all adjustments, consisting only of normal recurring adjustments,
necessary to present fairly the financial position of the Company as of
March 31, 2001, and the results of its operations and its cash flows for the
three-month periods ended March 31, 2001 and 2000, have been included. The

                                       6
<PAGE>
                      METROMEDIA INTERNATIONAL GROUP, INC.

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

1. BASIS OF PRESENTATION AND LIQUIDITY (CONTINUED)
results of operations for the interim period are not necessarily indicative of
the results which may be realized for the full year.

LIQUIDITY

The Company is a holding company and, accordingly, does not generate cash flows
from operations. The Company believes that its cash on hand will be sufficient
to fund the Company's working capital requirements for the remainder of the
year.

The Communications Group is dependent on the Company for significant capital
infusions to fund its operations and make acquisitions, as well as to fulfill
its commitments to make capital contributions and loans to its joint ventures.
Many of the Communications Group's joint ventures operate or invest in
businesses, such as cable television, fixed telephony and cellular
telecommunications, that are capital intensive and require significant capital
investment in order to construct and develop operating systems and market their
services. To date, such financing requirements have been funded from cash on
hand. The Company currently has approximately $40.0 million at headquarters.
Future financing requirements of the Communications Group, including future
acquisitions, will depend on available funding from the Company and on the
ability of the Communications Group's joint ventures to generate positive cash
flows, and if necessary, selective dispositions of assets, alternative sources
of funding or non-payment of cash dividends on the Company's preferred stock.

In addition to funding the cash requirements of the Communications Group, the
Company has periodically funded the short-term working capital needs of Snapper.
PLD Telekom and Snapper are restricted under covenants contained in their credit
documents from making dividend payments or advances, other than certain
permitted repayments, to the Company.

On March 15, 2001, Snapper received written notice from the financial
institution that provides Snapper's dealers with floor plan financing, advising
that it considered Snapper and the Company to be in default under the terms of
the floor plan financing agreements as a result of claimed material adverse
changes in their respective financial conditions. The financial institution also
claimed that Snapper had defaulted under its agreement by failing to provide
collateral to the financial institution, notwithstanding the fact that the
agreement does not require the provision of collateral. The notice further
advised that the financing relationship would be terminated as of June 13, 2001,
and that Snapper would be required to pay a default termination fee of one
percent of the average amount floor planned with Snapper's dealers during the
previous twelve month period. Snapper and the Company disagree with the basis
for this action taken by the financial institution, and are currently contesting
the claimed defaults.

If the Company is unable to come to terms with the financial institution that is
providing Snapper's floor plan financing, the Company will be required to pursue
alternative sources of financing. Alternatives include negotiating a new floor
plan financing arrangement with another financial institution or pursuing
additional working capital financing with either its existing lender or another
financial institution. The Company believes that it will either come to terms
with the current financial institution or find an alternative source of
financing. However, if the Company is unable to come to terms with the current
financial institution or find an alternative, Snapper may be required to
significantly reduce its production schedule and current operations. Under this
scenario, Snapper would be required to self-finance the receivables from its
dealers commencing June 13, 2001 and fully utilize its existing working capital
facility by the end of December 2001 to fund operations. Snapper's reduced

                                       7
<PAGE>
                      METROMEDIA INTERNATIONAL GROUP, INC.

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

1. BASIS OF PRESENTATION AND LIQUIDITY (CONTINUED)
production levels would reduce revenues in the last quarter of 2001 and have an
adverse impact on Snapper's revenues in 2002. In addition, with reduced
production and sales in 2002, Snapper would be required to reduce operating
expenses and operate at a significantly reduced level to be able to meet its
obligations as they come due, without additional sources of financing. However,
there can be no assurances that Snapper will be able to reduce its operations to
a level that would not require additional outside funding. In the event of
adverse weather conditions or other factors which adversely impact sales,
further actions may be required.

The Company will be required to pay interest on its 10 1/2% senior discount
notes issued in connection with the acquisition of PLD Telekom commencing
September 30, 2002. The Company will require additional financing or
modification of the existing terms of the 10 1/2% senior discount notes in order
to satisfy its debt service, on-going working capital requirements, and
acquisition and expansion requirements. Such additional capital may be provided
through the public or private sale of equity or debt securities of the Company
or by separate equity or debt financings by the Communications Group or certain
companies of the Communications Group or proceeds from the sale of assets. No
assurance can be given that such additional financing will be available to the
Company on acceptable terms, if at all. If adequate additional funds are not
available, the Company may be required to curtail significantly its long-term
business objectives and the Company's results of operations may be materially
and adversely affected.

Management believes that its longer-term liquidity needs (including debt
service) will be satisfied through a combination of the Company's successful
implementation and execution of its growth strategy to become a global
communications and media company and through the Communications Group's joint
ventures and subsidiaries achieving positive operating results and cash flows
through revenue and subscriber growth, and control of operating expenses.

2. COMMUNICATIONS GROUP--EASTERN EUROPE AND THE REPUBLICS OF THE FORMER SOVIET
UNION

GENERAL

The Communications Group records its investments in other companies and joint
ventures which are less than majority-owned, or which the Company does not
control but in which it exercises significant influence, at cost, net of its
equity in earnings or losses. Advances to the joint ventures under the line of
credit agreements between the Company or one of its subsidiaries and the joint
ventures are reflected based on amounts recoverable under the credit agreement,
plus accrued interest.

Advances are made to joint ventures and subsidiaries in the form of cash for
working capital purposes, payment of expenses or capital expenditures, or in the
form of equipment purchased on behalf of the joint ventures. Interest rates
charged to the joint ventures and subsidiaries range from prime rate to prime
rate plus 6%. The credit agreements generally provide for the payment of
principal and interest from 90% of the joint ventures' and subsidiaries'
available cash flow, as defined, prior to any substantial distributions of
dividends to the joint venture partners. The Communications Group has entered
into charter fund and credit agreements with its joint ventures and subsidiaries
to provide up to $208.7 million in funding of which $43.3 million in funding
obligations remain at March 31, 2001. The Communications Group's funding
commitments are contingent on its approval of the joint ventures' and
subsidiaries' business plans.

                                       8
<PAGE>
                      METROMEDIA INTERNATIONAL GROUP, INC.

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

2. COMMUNICATIONS GROUP--EASTERN EUROPE AND THE REPUBLICS OF THE FORMER SOVIET
UNION (CONTINUED)
2000 IMPAIRMENT CHARGES

Certain of the Company's joint ventures have continued to incur operating
losses. As part of its ongoing review of these operations, the long lived assets
and investments in these businesses were evaluated to determine whether any
impairment existed. The Company's assessment was based on whether the estimated
undiscounted future cash flows of the businesses over the estimated lives of the
related assets were sufficient to recover the recorded carrying values. Where
such cash flows were insufficient to recover the recorded carrying values, the
Company utilized a discounted cash flow model or current purchase and sale
negotiations to estimate the fair value of assets and investments and recorded
an impairment charge to adjust the carrying values to estimated fair value. As a
result of this evaluation, the Company recorded a non-cash impairment charge on
three of its joint ventures of $9.4 million in 2000.

1999 RESTRUCTURING CHARGES

Shortly after completing its September 30, 1999 acquisition of PLD Telekom, the
Company began identifying synergies and redundancies between its MITI and PLD
Telekom subsidiaries. The Company's efforts were directed toward streamlining
its operations. Following the review of its operations, the Communications Group
made significant reductions in its projected overhead costs for 2000 by closing
its offices in Stamford, Connecticut and London, England, consolidating its
executive offices in New York, New York, consolidating its operational
headquarters in Vienna, Austria and consolidating its two Moscow offices into
one. As part of this streamlining of its operations, the Company announced an
employee headcount reduction. Employees impacted by the restructuring were
notified in December 1999 and in almost all cases were terminated effective
December 31, 1999. The total number of U.S. domestic and expatriate employees
separated was approximately 60. In addition, there were reductions in locally
hired foreign staff. In 1999 the Company recorded a charge of $8.4 million in
connection with this restructuring.

Following is a rollforward of the activity and balances of the restructuring
reserve account from December 31, 1999 to March 31, 2001 (in thousands):

<TABLE>
<CAPTION>
                                      DECEMBER 31,                            DECEMBER 31,              MARCH 31,
TYPE OF COST                              1999       PAYMENTS   ADJUSTMENTS       2000       PAYMENTS     2001
------------                          ------------   --------   -----------   ------------   --------   ---------
<S>                                   <C>            <C>        <C>           <C>            <C>        <C>
Employee separations................     $5,872      $(3,953)      $(676)        $1,243       $ (26)     $1,217
Facility closings...................      1,456       (1,123)       (147)           186        (126)         60
                                         ------      -------       -----         ------       -----      ------
                                         $7,328      $(5,076)      $(823)        $1,429       $(152)     $1,277
                                         ======      =======       =====         ======       =====      ======
</TABLE>

Adjustments are primarily due to actual employee termination costs being lower
than originally estimated. The restructuring accrual is included in accrued
expenses in the accompanying balance sheet at March 31, 2001 and December 31,
2000.

EQUITY METHOD INVESTMENT INFORMATION

At March 31, 2001 and December 31, 2000, the Communications Group's
unconsolidated investments in and advances to joint ventures in Eastern Europe
and the republics of the former Soviet Union, at

                                       9
<PAGE>
                      METROMEDIA INTERNATIONAL GROUP, INC.

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

2. COMMUNICATIONS GROUP--EASTERN EUROPE AND THE REPUBLICS OF THE FORMER SOVIET
UNION (CONTINUED)
cost, net of adjustments for its equity in earnings or losses, impairment
charges and distributions were as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                         YEAR
                                                                                      OPERATIONS
NAME                                               2001       2000     OWNERSHIP %   COMMENCED (1)
----                                             --------   --------   -----------   -------------
<S>                                              <C>        <C>        <C>           <C>
WIRELESS TELEPHONY
Magticom, Georgia..............................  $ 21,066   $ 19,148         35%         1997
Tyumenruskom, Russia (2).......................      (289)      (289)        46%         1999
BELCEL, Belarus................................     4,546      4,093         50%         1999
                                                 --------   --------
                                                   25,323     22,952
                                                 --------   --------
FIXED TELEPHONY
Comstar (3)....................................    60,016     61,007         50%         2000
MTR-Sviaz, Russia (2)..........................     1,797      1,973         49%         1999
Telecom Georgia, Georgia.......................     2,523      2,802         30%         1994
Instaphone, Kazakhstan (2).....................        --         --         50%         1998
Caspian American Telecom, Azerbaijan (2).......        --         --         37%         1999
                                                 --------   --------
                                                   64,336     65,782
                                                 --------   --------
CABLE TELEVISION
Sun TV, Chisinau, Moldova (4)..................        --      2,907         91%         1994
Kosmos TV, Moscow, Russia......................     6,008      5,471         50%         1992
Baltcom TV, Riga, Latvia.......................     3,720      4,645         50%         1992
Kamalak TV, Tashkent, Uzbekistan...............     1,151      2,623         50%         1993
Cosmos TV, Minsk, Belarus......................     1,517      2,195         50%         1996
Alma TV, Almaty, Kazakhstan....................     4,315      5,467         50%         1995
Teleplus, St. Petersburg, Russia (2)...........       (27)       (31)        45%         1998
                                                 --------   --------
                                                   16,684     23,277
                                                 --------   --------
PAGING
Kamalak Paging, Tashkent, Uzbekistan...........     1,274      1,263         50%         1993
Mobile Telecom, Russia (2)(5)..................        --        500         50%         1998
Baltcom Plus, Latvia (2).......................        --         --         50%         1995
Paging One, Georgia (2)........................        --         --         45%         1994
Raduga Poisk, Nizhny Novgorod, Russia (2)......        --         --         45%         1994
PT Page, St. Petersburg, Russia (2)............        --         --         40%         1995
Paging Ajara, Batumi, Georgia (2)..............        --         --         35%         1997
Kazpage, Kazakhstan (2)........................        --         --      26-41%         1997
Alma Page, Almaty, Kazakhstan (2)..............        --         --         50%         1995
                                                 --------   --------
                                                    1,274      1,763
                                                 --------   --------
RADIO BROADCASTING
AS Trio LSL, Estonia...........................       933      1,318         49%         1997
                                                 --------   --------
                                                      933      1,318
                                                 --------   --------
</TABLE>

                                       10
<PAGE>
                      METROMEDIA INTERNATIONAL GROUP, INC.

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

2. COMMUNICATIONS GROUP--EASTERN EUROPE AND THE REPUBLICS OF THE FORMER SOVIET
UNION (CONTINUED)

<TABLE>
<CAPTION>
                                                                                         YEAR
                                                                                      OPERATIONS
NAME                                               2001       2000     OWNERSHIP %   COMMENCED (1)
----                                             --------   --------   -----------   -------------
<S>                                              <C>        <C>        <C>           <C>
PRE-OPERATIONAL (6)
Other..........................................     4,952      2,816
                                                 --------   --------
                                                    4,952      2,816
                                                 --------   --------
Total..........................................  $113,502   $117,908
                                                 ========   ========
</TABLE>

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

(1) Indicates year operations commenced, or in the case of acquired operational
    entities, the year of acquisition.

(2) Investment balance reflects write down of investment.

(3) In December 2000, the Company purchased its 50% interest in Comstar for
    $61.4 million of which approximately $44.0 million was allocated to goodwill
    and intangibles based upon the preliminary purchase price allocation.

(4) The Communications Group increased its ownership in Sun TV to 91% in the
    fourth quarter of 2000. The results of operations are consolidated for the
    first quarter of 2001.

(5) The Company purchased its 50% interest in Mobile Telecom and a related
    paging distribution company in June 1998 for $7.5 million plus two potential
    earnout payments to be made in 2000 and 2001. The Company has not yet made
    any earnout payments, based on the operational results of the ventures.

(6) At March 31, 2001 and December 31, 2000, amounts disbursed for proposed
    joint ventures and pre-operational joint ventures are included in
    pre-operational joint ventures.

                                       11
<PAGE>
                      METROMEDIA INTERNATIONAL GROUP, INC.

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

2. COMMUNICATIONS GROUP--EASTERN EUROPE AND THE REPUBLICS OF THE FORMER SOVIET
UNION (CONTINUED)
Summarized combined balance sheet financial information of unconsolidated joint
ventures as of March 31, 2001 and December 31, 2000, and combined statement of
operations financial information for the three months ended March 31, 2001 and
2000, of the Company's joint ventures accounted for under the equity method,
that have commenced operations as of the dates indicated are as follows (in
thousands):

COMBINED INFORMATION OF UNCONSOLIDATED JOINT VENTURES

COMBINED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                        MARCH 31,   DECEMBER 31,
                                                          2001          2000
                                                        ---------   ------------
<S>                                                     <C>         <C>
Assets:
  Current assets......................................  $ 44,598      $ 51,356
  Investments in systems and equipment................   151,343       157,084
  Other assets........................................     1,327         1,179
                                                        --------      --------
    Total assets......................................  $197,268      $209,619
                                                        ========      ========
Liabilities and Joint Ventures' Deficit:
  Current liabilities.................................  $ 64,197      $ 66,056
  Amount payable under credit facility................    73,681        93,229
  Other long-term liabilities.........................    21,188        28,189
                                                        --------      --------
                                                         159,066       187,474
  Joint ventures' equity..............................    38,202        22,145
                                                        --------      --------
    Total liabilities and joint ventures' deficit.....  $197,268      $209,619
                                                        ========      ========
</TABLE>

COMBINED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
                                                         THREE MONTHS ENDED
                                                              MARCH 31,
                                                      -------------------------
                                                         2001          2000
                                                      ----------   ------------
<S>                                                   <C>          <C>
Revenues............................................   $ 41,573      $ 34,287
Costs and Expenses:
  Cost of sales and operating expenses..............     16,497         7,892
  Selling, general and administrative...............     14,670        15,798
  Depreciation and amortization.....................      9,182         8,649
                                                       --------      --------
    Total expenses..................................     40,349        32,339
                                                       --------      --------
Operating income....................................      1,224         1,948
Interest expense....................................     (2,313)       (4,197)
Other expense.......................................     (1,637)       (1,009)
Foreign currency transactions.......................       (674)         (755)
                                                       --------      --------
Net loss............................................   $ (3,400)     $ (4,013)
                                                       ========      ========
</TABLE>

For the three months ended March 31, 2001 and 2000 the results of operations
presented above are before the elimination of intercompany interest. Financial
information for joint ventures which are not

                                       12
<PAGE>
                      METROMEDIA INTERNATIONAL GROUP, INC.

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

2. COMMUNICATIONS GROUP--EASTERN EUROPE AND THE REPUBLICS OF THE FORMER SOVIET
UNION (CONTINUED)
yet operational or which are no longer reported since they have been
written-off, are not included in the above summary.

The following tables represent summary financial information for the Company's
operating unconsolidated joint ventures being grouped as indicated as of and for
the three months ended March 31, 2001 and 2000. For the three months ended
March 31, 2001 and 2000 the results of operations presented below are before the
elimination of intercompany interest (in thousands):

<TABLE>
<CAPTION>
                                                              THREE MONTHS ENDED MARCH 31, 2001
                                           -----------------------------------------------------------------------
                                           WIRELESS      FIXED       CABLE         RADIO
                                           TELEPHONY   TELEPHONY   TELEVISION   BROADCASTING    PAGING     TOTAL
                                           ---------   ---------   ----------   ------------   --------   --------
<S>                                        <C>         <C>         <C>          <C>            <C>        <C>
Revenues.................................   $11,376    $ 22,987      $ 6,525        $ 371       $  314    $ 41,573
Depreciation and amortization............     2,927       4,065        2,093           43           54       9,182
Operating income (loss)..................     3,410       1,381       (3,458)        (141)          32       1,224
Interest income..........................        --         168           --           --           --         168
Interest expense.........................       572         562        1,168           11           --       2,313
Net income (loss)........................     2,688        (108)      (5,785)        (151)         (44)     (3,400)
Assets...................................    60,292     110,413       25,923          291          349     197,268
Capital expenditures.....................     4,719       1,430        2,892           --           --       9,041
Net investment in joint ventures.........    25,323      64,336       16,684          933        1,274     108,550
Equity in income (losses) of
  unconsolidated investees...............     1,668         176       (4,617)        (490)        (543)     (3,806)
</TABLE>

<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED MARCH 31, 2000
                                            -----------------------------------------------------------------------
                                            WIRELESS      FIXED       CABLE         RADIO
                                            TELEPHONY   TELEPHONY   TELEVISION   BROADCASTING    PAGING     TOTAL
                                            ---------   ---------   ----------   ------------   --------   --------
<S>                                         <C>         <C>         <C>          <C>            <C>        <C>
Revenues..................................   $16,417     $ 7,232      $ 7,856       $  545       $2,237    $ 34,287
Depreciation and amortization.............     4,515       1,391        2,516           53          174       8,649
Operating income (loss)...................     3,929      (1,891)         154          (19)        (225)      1,948
Interest income...........................        --          --            3           --           --           3
Interest expense..........................     2,146         524        1,462           13           52       4,197
Net income (loss).........................     1,320      (2,863)      (1,910)         (52)        (508)     (4,013)
Assets....................................    99,215      37,001       32,352        1,000        3,617     173,185
Capital expenditures......................     9,052       3,007        1,765           --          380      14,204
Net investment in joint ventures..........    23,916      11,733       24,931        1,722        8,251      70,553
Equity in income (losses) of
  unconsolidated investees................     2,549      (1,524)        (393)         (37)        (345)        250
</TABLE>

                                       13
<PAGE>
                      METROMEDIA INTERNATIONAL GROUP, INC.

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

3. COMMUNICATIONS GROUP--CHINA

The Company has made intercompany loans to Metromedia China under a credit
agreement, and Metromedia China has used the proceeds of these loans to fund its
operations and investments in China. At March 31, 2001, MCC owed $8.1 million
under this credit agreement (including accrued interest).

In May 1999, MCC's wholly-owned subsidiary, Asia American Telecommunications
("AAT"), entered into a joint venture agreement with All Warehouse Commodity
Electronic Commerce Information Development Co., Ltd. ("All Warehouse"), a
Chinese trading company, to form Huaxia Metromedia Information Technology
Co., Ltd ("Huaxia JV"). The Huaxia JV was established in July 1999 to develop
software and provide technical services supporting operation of electronic
commerce computer information systems for China-based corporate clients. The
terms under which Huaxia JV was originally established required a total amount
to be invested in the joint venture of $25.0 million, of which $10.0 million had
to be in the form of registered capital contributions from its shareholders. At
its formation, AAT owned a 49% interest in Huaxia JV and was obligated to make
total registered capital contributions of $4.9 million over a three-year period.
All Warehouse owned a 51% interest, obligating it to contribute $5.1 million.
The remaining investment in Huaxia JV was to be in the form of up to
$15.0 million of loans from AAT.

On September 20, 2000, the Chinese government approved a revised joint venture
contract for Huaxia JV whereby AAT's ownership interest in the joint venture was
increased to 98%. AAT's only material cost for its increased ownership position
in Huaxia JV was a corresponding increase in its obligation for future
registered capital contributions. On April 10, 2001, the Chinese government
approved Huaxia to become a wholly foreign-owned enterprise and AAT obtained
100% ownership. Huaxia's business license remains unchanged as to permitted
business activities and capitalization requirements.

The terms under which Huaxia JV is currently established require a total
investment of $10.0 million, of which $5.0 million must be in the form of
registered capital contributions from the joint venture's shareholders. The
registered capital contributions must be made within three years. As of
March 31, 2001, AAT had made $1.6 million of its scheduled registered capital
investment. AAT accounted for Huaxia JV as an equity method investment until
assuming 98% ownership and control of the venture on September 20, 2000. For the
three months ended March 31, 2000, Huaxia JV had not commenced material
operations. The Company consolidated the results of operations of Huaxia JV
subsequent to September 30, 2000.

On July 24, 2000, MCC purchased an 80% interest in Twin Poplars LLC, a Delaware
limited liability company, for $300,000 and obtained options to acquire the
remaining 20% equity interest for $75,000. On August 31, 2000, the Company
exercised its option to acquire an additional 10% equity interest in Twin
Poplars, at which time Twin Poplars owned a 97% registered capital interest in
Beijing 66cities.com Company, Limited, a Chinese-foreign equity joint venture
established to engage in information content provision and e-commerce-related
services in China. Twin Poplars operates as a holding company for 66cities JV
and has no operations or assets other than its interests in this venture.

As of March 31, 2001, the MCC had advanced $1.6 million to Twin Poplars, all of
which was invested in or advanced to 66cities JV.

By virtue of its ownership interest in Twin Poplars, as of March 31, 2001 MCC
owns an indirect 87% interest in the 66cities JV. The approved total investment
level for 66cities JV is $2.5 million of which

                                       14
<PAGE>
                      METROMEDIA INTERNATIONAL GROUP, INC.

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

3. COMMUNICATIONS GROUP--CHINA (CONTINUED)
$1.8 million shall be in the form of registered capital. As of March 31, 2001,
Twin Poplars had invested $1.3 million registered capital in and advanced
$302,000 to 66cities JV.

On March 20, 2001, MCC completed registration and establishment of Clarity Data
Systems Co., Ltd. ("Clarity"), a wholly foreign owned enterprise. The approved
total investment level for Clarity is $5.0 million of which $2.5 million must be
in the form of registered capital. The Company invested the initial $375,000 of
Clarity's registered capital on April 4, 2001.

Clarity's approved scope of business is to provide database management and
related application services and software. It focuses on direct marketers and
retailers selling to China's consumer markets, offering Customer Relationship
Management applications and services. As of March 31, 2001 Clarity had conducted
no material business operations.

4. EARNINGS PER SHARE OF COMMON STOCK

Basic earnings per share excludes all dilutive securities. It is based upon the
weighted average number of common shares outstanding during the period. Diluted
earnings per share reflects the potential dilution that would occur if
securities exercisable for or convertible into common stock were exercised or
converted into common stock. In calculating diluted earnings per share, no
potential shares of common stock are to be included in the computation when a
loss from continuing operations attributable to common stockholders exists. For
the three months ended March 31, 2001 and 2000, the Company had losses from
continuing operations.

At March 31, 2001 and 2000, the Company had potentially dilutive shares of
common stock of 24,799,000 and 26,994,000, respectively.

5. INVESTMENT IN RDM

On August 29, 1997, RDM Sports Group, Inc. and certain of its affiliates filed
voluntary petitions for relief under chapter 11 of the Bankruptcy Code. At the
time of the filings, the Company owned 39% of the outstanding common stock of
RDM Sports Group, Inc. In addition, during the chapter 11 case the Company
honored a $15.0 million guaranty obligation to RDM's pre-petition senior secured
lender, and, as a result, the Company has asserted a subrogation claim in that
amount (together with interest and other amounts owing in respect thereof) in
the RDM chapter 11 case. On February 19, 1998, the Bankruptcy Court ordered the
appointment of a chapter 11 trustee. On July 18, 2000, the Bankruptcy Court
confirmed the Second Amended and Restated Joint Chapter 11 Plan of Liquidation
for RDM Sports Group, Inc. and Related Debtor Entities (the "Plan"). Under the
Plan the Company's 39% equity interest will likely be cancelled by operation of
the Plan. The treatment of the aforementioned subrogation claim under the Plan
remains subject to the bankruptcy-related proceedings described below.

On August 19, 1998, a purported class action lawsuit, THEOHAROUS V. FONG, ET
AL., Civ. No. 1:98CV2366, was filed in United States District Court for the
Northern District of Georgia. On October 19, 1998, a second purported class
action lawsuit with substantially the same allegations, SCHUETTE V. FONG, ET
AL., Civ. No. 1:98CV3034, was filed in United States District Court for the
Northern District of Georgia. On June 7, 1999, plaintiffs in each of these
lawsuits filed amended complaints. The amended complaints alleged that certain
officers, directors and shareholders of RDM, including the Company and current
and former officers of the Company who served as directors of RDM, were liable
under

                                       15
<PAGE>
                      METROMEDIA INTERNATIONAL GROUP, INC.

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

5. INVESTMENT IN RDM (CONTINUED)
federal securities laws for misrepresenting and failing to disclose information
regarding RDM's alleged financial condition during the period between
November 7, 1995 and August 22, 1997, the date on which RDM disclosed that its
management had discussed the possibility of filing for bankruptcy. The amended
complaints also alleged that the defendants, including the Company and current
and former officers of the Company who served as directors of RDM, were
secondarily liable as controlling persons of RDM. In an opinion dated March 10,
2000, the court dismissed these actions in their entirety. On April 7, 2000,
plaintiffs in each of these actions filed notices of appeal to the United States
Court of Appeals for the Eleventh Circuit. The Eleventh Circuit heard oral
arguments on March 20, 2001. The appeal to the Eleventh Circuit is pending.

On December 30, 1998, the chapter 11 trustee of RDM brought an adversary
proceeding in the bankruptcy of RDM, HAYS, ET AL. V. FONG, ET AL., Adv. Proc.
No. 98-1128, in the United States Bankruptcy Court, Northern District of
Georgia, alleging that current and former officers of the Company, while serving
as directors on the board of RDM, breached fiduciary duties allegedly owed to
RDM's shareholders and creditors in connection with the bankruptcy of RDM. On
January 25, 1999, the plaintiff filed a first amended complaint. The official
committee of unsecured creditors of RDM moved to proceed as co-plaintiff or to
intervene in this proceeding, and the official committee of bondholders of RDM
moved to intervene in or join the proceeding. On February 26, 1999, the court
entered an order staying all activity in this proceeding pending the court's
ruling on these motions. Plaintiffs in this adversary proceeding seek the
following relief against current and former officers of the Company who served
as directors of RDM: actual damages in an amount to be proven at trial,
reasonable attorney's fees and expenses, and such other and further relief as
the court deems just and proper.

On February 16, 1999, the creditors' committee brought an adversary proceeding,
THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS OF RDM SPORTS GROUP, INC. AND
RELATED DEBTORS V. METROMEDIA INTERNATIONAL GROUP INC., Adv. Proc. No. 99-1023,
seeking in the alternative to recharacterize as contributions to equity a
secured claim in the amount of $15.0 million made by the Company arising out of
the Company's financing of RDM, or to equitably subordinate such claim made by
the Company against RDM and other debtors in the bankruptcy proceeding. On
March 3, 1999, the bondholders' committee brought an adversary proceeding, THE
OFFICIAL COMMITTEE OF BONDHOLDERS OF RDM SPORTS GROUP, INC. V. METROMEDIA
INTERNATIONAL GROUP, INC., Adv. Proc. No. 99-1029, with substantially the same
allegations as the above proceeding. In addition to the equitable and injunctive
relief sought by plaintiffs described above, plaintiffs in these adversary
proceedings seek actual damages in the amount of $52.0 million, and such other
and further relief as the court deems just and proper.

On July 17, 2000, the bankruptcy court approved the Plan. Upon the Plan's
effective date, the creditors' committee and the bondholders' committee
dissolved and the right to continue the adversary proceedings described above
fell to the Plan's "liquidating agent," the former chapter 11 trustee. The Plan
also provided that, if the liquidating agent chose to pursue the adversary
proceedings, he should consolidate them.

On August 18, 2000, the liquidating agent filed first amended complaints in both
the former creditors' committee adversary proceeding and the former bondholders'
committee adversary proceeding. In October 2000, the bankruptcy court approved a
consent order, signed by the parties, staying all activity in these proceedings
pending the bankruptcy court's ruling on an anticipated motion by the
liquidating agent to consolidate the adversary proceedings. On January 31, 2001,
the liquidating agent made

                                       16
<PAGE>
                      METROMEDIA INTERNATIONAL GROUP, INC.

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

5. INVESTMENT IN RDM (CONTINUED)
motions (a) to lift the stay in the HAYS V. FONG adversary proceeding, (b) to
consolidate the HAYS V. FONG adversary proceeding with the former creditors'
committee adversary proceeding, the former bondholders' committee adversary
proceeding and another adversary proceeding--HAYS, ET AL. V. EQUITEX, ET AL.,
Adv. Proc. No. 00-1065--which does not involve the Company or any of its current
or former officers or directors, and (c) for leave to file an amended
consolidated complaint. On March 14, 2001, the liquidating agent's motion to
consolidate the various proceedings was denied. On March 22, 2001, the
liquidating agent filed a lien avoidance action against the Company, HAYES, ET
AL. V. METROMEDIA INTERNATIONAL GROUP, INC., ET AL., Adv. Proc. No. 01-1026. On
May 7, 2001, the Company filed a motion to dismiss the former creditors'
committee adversary proceedings and the former bondholders' committee adversary
proceeding. Also on May 7, 2001, the Company filed a motion seeking to have such
adversary proceeding withdrawn from the United States Bankruptcy Court, Northern
District of Georgia to the United States District Court, Northern District of
Georgia.

The Company believes that it has meritorious defenses and plans to defend
vigorously these actions. Due to the status of these proceedings, the Company
cannot evaluate the likelihood of an unfavorable outcome or estimate the likely
amount or range of possible loss, if any. Accordingly, the Company has not
recorded any liability in connection with these adversary proceedings.

6. BUSINESS SEGMENT DATA

The business activities of the Company consist of two operating groups, the
Communications Group and Snapper.

The Communications Group has operations in Eastern Europe and the republics of
the former Soviet Union and China. Operations in Eastern Europe and the
republics of the former Soviet Union provide the following services:
(i) wireless telephony; (ii) fixed telephony; (iii) cable television;
(iv) radio broadcasting; and (v) paging. The Communications Group is developing
e-commerce business opportunities in China and currently owns controlling
interests in Chinese software services and information services joint ventures.

Snapper manufactures Snapper-Registered Trademark- brand premium priced power
lawnmowers, garden tillers, snow throwers and related parts and accessories.

The Company evaluates the performance of its operating segments based on
earnings before interest, taxes, depreciation, and amortization. The segment
information is based on operating income (loss) which includes depreciation and
amortization. Equity in income (losses) of unconsolidated investees reflects
elimination of intercompany interest expense.

The Company's segment information is set forth as of and for the three months
ended March 31, 2001, and 2000 in the following tables (in thousands):

                                       17
<PAGE>
                      METROMEDIA INTERNATIONAL GROUP, INC.
        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

6. BUSINESS SEGMENT DATA (CONTINUED)

                       THREE MONTHS ENDED MARCH 31, 2001
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                       COMMUNICATIONS GROUP--EASTERN EUROPE AND
                                                       THE REPUBLICS OF THE FORMER SOVIET UNION
                                    ------------------------------------------------------------------------------
                                                                          RADIO                SEGMENT
                                    WIRELESS      FIXED       CABLE       BROAD-                HEAD-
                                    TELEPHONY   TELEPHONY   TELEVISION   CASTING     PAGING    QUARTERS    TOTAL
                                    ---------   ---------   ----------   --------   --------   --------   --------
<S>                                 <C>         <C>         <C>          <C>        <C>        <C>        <C>
COMBINED
Revenues..........................   $14,406     $44,462     $ 9,843      $4,861     $ 430     $   517    $ 74,519
Depreciation and amortization.....     4,121       8,386       3,812         546       104       9,110      26,079
Operating income (loss)...........     2,285       3,514      (5,340)        697       (37)    (13,644)    (12,525)
CONSOLIDATED
Revenues..........................   $ 3,030     $21,475     $ 3,318      $4,490     $ 116     $   517    $ 32,946
Gross profit......................
Depreciation and amortization.....     1,194       4,321       1,719         503        50       9,110      16,897
Operating income (loss)...........    (1,125)      2,133      (1,882)        838       (69)    (13,644)    (13,749)
UNCONSOLIDATED JOINT VENTURES
Revenues..........................   $11,376     $22,987     $ 6,525      $  371     $ 314     $    --    $ 41,573
Depreciation and amortization.....     2,927       4,065       2,093          43        54          --       9,182
Operating income (loss)...........     3,410       1,381      (3,458)       (141)       32          --       1,224
Net income (loss).................     2,688        (108)     (5,785)       (151)      (44)         --      (3,400)
Equity in income (losses) of
  unconsolidated investees........     1,668         176      (4,617)       (490)     (543)         --      (3,806)
Foreign currency loss.............                                                                            (334)
Minority interest.................                                                                            (197)
Interest expense..................
Interest income...................
Other income......................
Income tax expense................
Net loss..........................
Capital expenditures..............                                                                           5,471
Assets at March 31, 2001..........                                                                         533,983

<CAPTION>

                                    COMMUNICATIONS                CORPORATE
                                     GROUP--CHINA     SNAPPER    HEADQUARTERS   CONSOLIDATED
                                    ---------------   --------   ------------   ------------
<S>                                 <C>               <C>        <C>            <C>
COMBINED
Revenues..........................
Depreciation and amortization.....
Operating income (loss)...........
CONSOLIDATED
Revenues..........................      $   209       $ 53,627     $    --        $ 86,782
Gross profit......................                      19,491
Depreciation and amortization.....          208          1,339          16          18,460
Operating income (loss)...........       (2,083)         5,969      (1,705)        (11,568)
UNCONSOLIDATED JOINT VENTURES
Revenues..........................      $    --
Depreciation and amortization.....           --
Operating income (loss)...........           --
Net income (loss).................           --
Equity in income (losses) of
  unconsolidated investees........           --             --          --          (3,806)
Foreign currency loss.............           --             --          --            (334)
Minority interest.................          106             --          --             (91)
Interest expense..................                                                  (7,511)
Interest income...................                                                   1,648
Other income......................                                                      30
Income tax expense................                                                  (2,338)
                                                                                  --------
Net loss..........................                                                $(23,970)
                                                                                  ========
Capital expenditures..............          159            433          --        $  6,063
Assets at March 31, 2001..........        2,141        141,615      46,900        $724,639
</TABLE>

                                       18
<PAGE>
                      METROMEDIA INTERNATIONAL GROUP, INC.
        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

6. BUSINESS SEGMENT DATA (CONTINUED)

                       THREE MONTHS ENDED MARCH 31, 2000
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                       COMMUNICATIONS GROUP--EASTERN EUROPE AND
                                                       THE REPUBLICS OF THE FORMER SOVIET UNION
                                    ------------------------------------------------------------------------------
                                                                          RADIO                SEGMENT
                                    WIRELESS      FIXED       CABLE       BROAD-                HEAD-
                                    TELEPHONY   TELEPHONY   TELEVISION   CASTING     PAGING    QUARTERS    TOTAL
                                    ---------   ---------   ----------   --------   --------   --------   --------
<S>                                 <C>         <C>         <C>          <C>        <C>        <C>        <C>
COMBINED
Revenues..........................   $19,911     $27,489     $ 9,386      $5,298     $2,769    $   679    $ 65,532
Depreciation and amortization.....     5,813       5,400       3,198         331        246      8,304      23,292
Operating income (loss)...........     3,030         598        (226)        310       (231)   (12,519)     (9,038)
CONSOLIDATED
Revenues..........................   $ 3,494     $20,257     $ 1,530      $4,753     $  532    $   679    $ 31,245
Gross profit......................
Depreciation and amortization.....     1,298       4,009         682         278         72      8,304      14,643
Operating income (loss)...........      (899)      2,489        (380)        329         (6)   (12,519)    (10,986)
UNCONSOLIDATED JOINT VENTURES
Revenues..........................   $16,417     $ 7,232     $ 7,856      $  545     $2,237         --    $ 34,287
Depreciation and amortization.....     4,515       1,391       2,516          53        174         --       8,649
Operating income (loss)...........     3,929      (1,891)        154         (19)      (225)        --       1,948
Net income (loss).................     1,320      (2,863)     (1,910)        (52)      (508)        --      (4,013)
Equity in income (losses) of
  unconsolidated investees........     2,549      (1,524)       (393)        (37)      (345)        --         250
Foreign currency loss.............                                                                            (478)
Minority interest.................                                                                            (638)
Interest expense..................
Interest income...................
Other income......................
Income tax expense................
Net loss..........................
Capital expenditures..............                                                                           4,244
Assets at December 31, 2000.......                                                                         552,311

<CAPTION>

                                    COMMUNICATIONS                CORPORATE
                                     GROUP--CHINA     SNAPPER    HEADQUARTERS   CONSOLIDATED
                                    ---------------   --------   ------------   ------------
<S>                                 <C>               <C>        <C>            <C>
COMBINED
Revenues..........................
Depreciation and amortization.....
Operating income (loss)...........
CONSOLIDATED
Revenues..........................      $    --       $ 50,182     $    --        $ 81,427
Gross profit......................                      17,563
Depreciation and amortization.....           52          1,479          17          16,191
Operating income (loss)...........       (1,905)         4,165      (1,351)        (10,077)
UNCONSOLIDATED JOINT VENTURES
Revenues..........................      $    --
Depreciation and amortization.....           --
Operating income (loss)...........           --
Net income (loss).................           --
Equity in income (losses) of
  unconsolidated investees........           --             --          --             250
Foreign currency loss.............           --             --          --            (478)
Minority interest.................        1,457             --          --             819
Interest expense..................                                                  (7,928)
Interest income...................                                                     891
Other income......................                                                   2,500
Income tax expense................                                                  (2,508)
                                                                                  --------
Net loss..........................                                                $(16,531)
                                                                                  ========
Capital expenditures..............           23            492          --        $  4,759
Assets at December 31, 2000.......        2,412        121,313      60,083        $736,119
</TABLE>

                                       19
<PAGE>
                      METROMEDIA INTERNATIONAL GROUP, INC.

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

6. BUSINESS SEGMENT DATA (CONTINUED)

Information about the Communications Group's operations in different geographic
locations for the three months ended March 31, 2001 and 2000 and as of
March 31, 2001 and December 31, 2000 is as follows (in thousands):

<TABLE>
<CAPTION>
                                                             REVENUES              ASSETS
                                                        ------------------   -------------------
COUNTRY                                                   2001      2000       2001       2000
-------                                                 --------   -------   --------   --------
<S>                                                     <C>        <C>       <C>        <C>
Azerbaijan............................................  $    --    $    --   $     27   $     27
Belarus...............................................      106        212      6,126      6,850
Bulgaria..............................................       --         --        412        352
Cyprus................................................       --         --         49         26
Czech Republic........................................      324        558      2,256      2,367
Estonia...............................................      116        118      1,209      1,520
Finland...............................................       --         --      1,141         --
Georgia...............................................      584         64     29,500     28,535
Germany...............................................       --         45         --         --
Hungary...............................................    1,123      2,049      4,917      4,595
Kazakhstan............................................    3,030      3,282     53,883     56,796
Kyrgystan.............................................      127         41      1,742      1,794
Latvia................................................      186        156      4,292      5,199
Lithuania.............................................      365        320      1,368      1,391
Moldova...............................................      570         --      3,409      2,907
People's Republic of China............................      209         --      2,141      2,412
Romania...............................................    1,516      1,124      9,522     10,444
Russia................................................   24,490     22,374    296,370    303,355
Ukraine...............................................       --        230        688        688
United Kingdom........................................       --         --         74         12
United States (1).....................................      409        672    114,574    121,567
Uzbekistan............................................       --         --      2,424      3,886
                                                        -------    -------   --------   --------
                                                        $33,155    $31,245   $536,124   $554,723
                                                        =======    =======   ========   ========
</TABLE>

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

(1) Assets include goodwill of $110.6 million, and $112.0 million at March 31,
    2001 and December 31, 2000, respectively.

All of the Company's remaining assets and substantially all remaining revenue
relate to operations in the United States.

7. OTHER CONSOLIDATED CONDENSED FINANCIAL STATEMENT INFORMATION

ACCOUNTS RECEIVABLE

The total allowance for doubtful accounts at March 31, 2001 and December 31,
2000 was $4.2 million and $3.9 million, respectively.

                                       20
<PAGE>
                      METROMEDIA INTERNATIONAL GROUP, INC.

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

7. OTHER CONSOLIDATED CONDENSED FINANCIAL STATEMENT INFORMATION (CONTINUED)
INVENTORIES

Inventories consist of the following as of March 31, 2001 and December 31, 2000
(in thousands):

<TABLE>
<CAPTION>
                                                              2001      2000
                                                            --------   -------
<S>                                                         <C>        <C>
Lawn and garden equipment:
  Raw materials...........................................  $ 9,170    $ 8,665
  Finished goods..........................................   54,061     52,294
                                                            -------    -------
                                                             63,231     60,959
                                                            -------    -------
Telecommunications:
  Pagers..................................................      131        131
  Telephony...............................................    3,039      3,029
  Cable...................................................      741        910
                                                            -------    -------
                                                              3,911      4,070
                                                            -------    -------
                                                            $67,142    $65,029
                                                            =======    =======
</TABLE>

INTEREST EXPENSE

Interest expense includes amortization of debt discount of $4.8 million and
$4.5 million for the three months ended March 31, 2001 and 2000, respectively.

OTHER INCOME

For the three months ended March 31, 2000, the Company recorded a $2.5 million
gain representing the gain realized on the buyout of options to acquire an
indirect interest in Telecominvest, a holding company with diverse
telecommunications interests in northwest Russia.

8. CONTINGENCIES

RISKS ASSOCIATED WITH THE COMMUNICATIONS GROUP'S INVESTMENTS

The ability of the Communications Group and its joint ventures and subsidiaries
to establish and maintain profitable operations is subject to, among other
things, significant political, economic and social risks inherent in doing
business in emerging markets such as Eastern Europe, the republics of the former
Soviet Union and China. These include, among other things, matters arising out
of competition, relationships with local partners, corporate governance of the
operating ventures, government policies, economic conditions, imposition of or
changes in government regulations or policies (including licensing requirements
and laws restricting foreign ownership), imposition of or changes to taxes or
other similar charges by government bodies, exchange rate fluctuations and
controls, civil disturbances, deprivation or unenforceability of contractual
rights, and taking of property without fair compensation. These and other risks
associated with the Company are discussed more fully in the Company's Annual
Report on Form 10-K/A Amendment No. 1 "Item 1--Risks Associated with the
Company."

The Communications Group's strategy is to minimize its foreign currency risk. To
the extent possible, the Communications Group bills and collects all revenues in
U.S. dollars or an equivalent local

                                       21
<PAGE>
                      METROMEDIA INTERNATIONAL GROUP, INC.

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

8. CONTINGENCIES (CONTINUED)
currency amount adjusted on a monthly basis for exchange rate fluctuations. The
Communications Group's subsidiaries and joint ventures are generally permitted
to maintain U.S. dollar accounts to service their U.S. dollar denominated debt
and current account obligations, thereby reducing foreign currency risk. As the
Communications Group's subsidiaries and joint ventures expand their operations
and become more dependent on local currency based transactions, the
Communications Group expects that its foreign currency exposure will increase.

RISKS ASSOCIATED WITH THE COMPANY'S CHINA E-COMMERCE JOINT VENTURES

All of the Company's China-based business units operate pursuant to business
licenses issued by the Chinese government. A condition of each license is that
the business unit shall comply with all Chinese regulations, both as presently
formed and as may be issued in the future. Such regulations may prohibit certain
business activities and may limit foreign investment in Chinese enterprises
engaged in certain business activities. The Company believes that the current
and intended business activities of all of its China-based business units comply
with currently published regulations, and that the current extent of the
Company's foreign ownership in these units is similarly permitted. Future
changes to or domestic interpretations of the regulations could, however, limit
business activity or the Company's ownership interests or both.

Chinese regulation of business activities involving use of the Internet and
provision of information content or services via the Internet or similar
networks are under active development. Regulations addressing the extent of
direct foreign investment permitted in Chinese business units engaged in these
activities could, if promulgated in the most severe form, require the Company to
limit its equity participation in current ventures or limit the scale of such
participation in future ventures. Regulations governing the permitted scope and
nature of commercial transactions via electronic networks and systems
(e-commerce) could limit the extent or profitability of the Company's current or
anticipated ventures. Regulations limiting dissemination of information for
political, social or security reasons could impose added operating expense
burdens on the Company's current or anticipated ventures.

This uncertainty regarding future Chinese regulations is applicable to all of
the Company's current and planned activities in China. The Company believes that
its current China ventures are in compliance with all currently published
Chinese regulations and further believes that future regulatory developments in
China will not unduly limit these ventures or other planned business activities.
However, there can be no assurance at this time that all such activities will be
permitted or be economically feasible under future Chinese regulatory regimes
and, therefore, the Company's investments in China or future profitability of
these investments could be jeopardized.

The Company's Huaxia JV was established to develop and sell software and provide
technical services relating to operation of electronic commerce computer
information systems for China-based corporate clients. Computer and software
products and services, such as those offered by Huaxia JV, are subject to
regulatory regimes different from those applied to telecommunications, Internet
and information service operations in China. The Company expects that a
significant portion of Huaxia JV's planned future revenues will, however, derive
from other businesses in China (including other of the Company's own ventures)
that may be subject to Internet, e-commerce or information service regulatory
regimes and, therefore, the potential scale of such revenues could be limited by
future regulatory developments in those areas. The Company believes that its
equity interest in Huaxia JV is not viewed under current Chinese regulation as
foreign equity investment in telecommunications operations or any other line of

                                       22
<PAGE>
                      METROMEDIA INTERNATIONAL GROUP, INC.

        NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

8. CONTINGENCIES (CONTINUED)
business restricted from foreign investment and the Company does not anticipate
that the extent of its equity investment in Huaxia JV will be challenged by
future Chinese regulation.

The Company's investment in 66cities JV entails certain risks resulting both
from regulatory uncertainty and the generally sensitive nature of any publishing
related activities within China. 66cities JV provides support services to
Chinese publishers and offers information content via the Internet on the
website it supports. With respect to current regulatory prohibitions against
foreign investment in publishing businesses in China, the Company believes that
66cities JV would not be deemed to be operating as a publishing business, since
it is providing content and services to licensed Chinese publisher clients under
contract for fixed fees. In addition, during the start-up phase, 66cities is
also providing administrative services of billings and collections on behalf of
the Chinese publisher, for which it is being reimbursed. The current contract
expires on June 30, 2001 and the Company is negotiating an extension. However,
regulatory action that alters, revokes or limits the clients' publishing rights
or the clients' contracts with 66cities JV could significantly impact 66cities
JV's current principal revenue stream. Since 66cities JV does not itself
actually publish the content it develops, the Chinese publishing clients'
revocation of existing service contracts with 66cities JV could have significant
adverse financial impact on the joint venture. With respect to Internet-related
operations, 66cities JV could be required in the future to adjust its web
hosting and Internet content provision support arrangements to comply with new
regulatory developments and such adjustment could adversely affect 66cities JV's
overall costs of operation.

The newly established Clarity unit will engage in a form of application service
provision, in addition to direct sale of application software products. Remote
provision of applications services via the Internet or other network is a new
business activity in China and clear regulatory provisions have not yet been
finalized. The Company believes that Clarity's business license makes specific
provision for the services the unit will offer and that Clarity's intended
operations are in compliance with current regulatory provisions. Future
regulatory developments, however, are unpredictable as to nature and timing.
Although the Company expects China's future regulatory regime to permit and
support business activities of the kind Clarity intends, there can be no
assurance at this time that all such activities will be permitted or be
economically feasible under these future regimes.

LITIGATION

During February 2001, four separate lawsuits were filed by the Company's
stockholders against the Company's current and former officers and directors
seeking, among other things, to compel the disposition of Snapper, Inc.

The Company is involved in various legal and regulatory proceedings and while
the results of any litigation or regulatory issue contain an element of
uncertainty, except as disclosed in note 5, management believes that the outcome
of any known, pending or threatened legal proceedings, including those noted in
the preceding paragraph, will not have a material effect on the Company's
consolidated financial position and results of operations.

                                       23
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
OF OPERATIONS

The following discussion should be read in conjunction with the Company's
consolidated condensed financial statements and related notes thereto.

RECENT DEVELOPMENTS

On November 8, 2000, the Company's Board of Directors authorized management to
evaluate structural alternatives to separate its Snapper, Metromedia China and
radio and cable businesses from its telephony assets as a means to maximize
stockholder value. These alternatives may include sales of certain or all of
these assets to third parties or the spin-off of certain or all of these assets
as independent companies to MMG's stockholders. On March 1, 2001, the Company
engaged Salomon Smith Barney and ING Barings, two independent, internationally
recognized investment banking firms, to advise it on the various alternatives.

Although the Company is engaged in discussions regarding the restructuring with
its and Snapper's banks and bondholders, the Company's Board of Directors has
not approved any definitive transaction. Any final action remains subject to a
number of conditions in addition to final Board of Director approval, including,
for certain transactions, obtaining the consent of the Company's and Snapper's
banks and bondholders. As a result, all information in this Quarterly Report has
been prepared assuming the Company continues to operate each of its lines of
businesses. The Company does not currently believe that any spin-off of its
businesses could be accomplished on a tax-free basis.

During February 2001, four separate lawsuits were filed by the Company's
stockholders against the Company's current and former officers and directors
seeking, among other things, to compel the disposition of Snapper, Inc. See
Part II, Item 1 "Legal Proceedings".

During December 2000, the Company received four separate proposals from the
Company's stockholders for inclusion in the Company's Proxy Statement with
respect to the Company's 2001 Annual Meeting of Stockholders (the "Annual
Meeting"). The Company is currently evaluating whether it is required to include
such proposals in its Proxy Statement for the Annual Meeting. With respect to
one of the four proposals, the Company sought the concurrence of the Securities
and Exchange Commission's Division of Corporate Finance, that the Division would
not recommend that the Commission take enforcement action against the Company in
the event that the Company chose to exclude such proposal from its 2001 Proxy
Statement. On March 27, 2001, the Division of Corporate Finance notified the
Company that it would not recommend to the Commission that it take enforcement
action against the Company if the Company chooses to omit such proposal from its
Proxy Statement.

On March 14, 2001 the Company received notice on behalf of Elliot Associates,
L.P. and Elliott International, L.P., stockholders of the Company, that they
have nominated three individuals to stand for election to the Company's Board of
Directors at the Annual Meeting. The Company is currently evaluating this notice
and preliminary proxy materials subsequently filed by such stockholders. In
light of the consideration by the Company's management and Board of Directors of
the structural alternatives for the Company and its business lines and the
possibility that any such transaction might require stockholder approval, the
Board of Directors has not yet established a definitive date for the Annual
Meeting.

GENERAL

The business activities of the Company consist of two operating groups, the
Communications Group and Snapper.

                                       24
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
OF OPERATIONS (CONTINUED)
COMMUNICATIONS GROUP

OVERVIEW

The Communications Group has operations in Eastern Europe and the republics of
the former Soviet Union and e-commerce related businesses in China. Operations
in Eastern Europe and the republics of the former Soviet Union provide the
following services: (i) wireless telephony; (ii) fixed telephony; (iii) cable
television; (iv) radio broadcasting; and (v) paging. The Communications Group is
currently developing e-commerce business opportunities in China.

The Company continues to focus its growth strategy on opportunities in
communications businesses. The constantly changing technologies involved in the
Communications Group's telephony and cable businesses, and the relationship of
each business to Internet access has provided the Company with new
opportunities.

The Communications Group's consolidated revenues represented approximately 38%
of the Company's total revenues for the three months ended March 31, 2001 and
2000.

2000 IMPAIRMENT CHARGE

Certain of the Company's joint ventures have continued to incur operating
losses. As part of its on-going review of these operations, the long lived
assets and investments in these businesses were evaluated to determine whether
any impairment existed. The Company's assessment was based on whether the
estimated undiscounted future cash flows of the businesses over the estimated
lives of the related assets were sufficient to recover the recorded carrying
values. Where such cash flows were insufficient to recover the recorded carrying
value, the Company utilized a discounted cash flow model or current purchase and
sale negotiations to estimate the fair value of assets and investments and
recorded an impairment charge to adjust the carrying values to estimated fair
value. As a result of this evaluation, the Company recorded a non-cash
impairment charge on three of its joint ventures of $9.4 million in 2000.

1999 RESTRUCTURING CHARGES

Shortly after completing its September 30, 1999 acquisition of PLD Telekom, the
Company began identifying synergies and redundancies between its MITI and PLD
Telekom subsidiaries. The Company's efforts were directed toward streamlining
its operations. Following the review of its operations, the Communications Group
made significant reductions in its projected overhead costs for 2000 by closing
its offices in Stamford, Connecticut and London, England, consolidating its
executive offices in New York, New York, consolidating its operational
headquarters in Vienna, Austria and consolidating its two Moscow offices into
one. As part of this streamlining of its operations, the Company announced an
employee headcount reduction. Employees impacted by the restructuring were
notified in December 1999 and in almost all cases were terminated effective
December 31, 1999. The total number of U.S. domestic and expatriate employees
separated was approximately 60. In addition, there were reductions in locally
hired staff. In 1999 the Company recorded a charge of $8.4 million in connection
with this restructuring.

                                       25
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
OF OPERATIONS (CONTINUED)
Following is a rollforward of the activity and balances of the restructuring
reserve account from December 31, 1999 to March 31, 2001 (in thousands):

<TABLE>
<CAPTION>
                                      DECEMBER 31,                            DECEMBER 31,              MARCH 31,
TYPE OF COST                              1999       PAYMENTS   ADJUSTMENTS       2000       PAYMENTS     2001
------------                          ------------   --------   -----------   ------------   --------   ---------
<S>                                   <C>            <C>        <C>           <C>            <C>        <C>
Employee separations................     $5,872      $(3,953)      $(676)        $1,243      $   (26)    $1,217
Facility closings...................      1,456       (1,123)       (147)           186         (126)        60
                                         ------      -------       -----         ------      -------     ------
                                         $7,328      $(5,076)      $(823)        $1,429      $  (152)    $1,277
                                         ======      =======       =====         ======      =======     ======
</TABLE>

Adjustments are primarily due to actual employee termination costs being lower
than originally estimated.

JOINT VENTURE OWNERSHIP STRUCTURES

The following table summarizes the Communications Group's joint ventures and
subsidiaries at March 31, 2001 and the Communications Group's ownership in each
company:

<TABLE>
<CAPTION>
                                                                COMPANY
JOINT VENTURE (1)                                             OWNERSHIP %
-----------------                                             -----------
<S>                                                           <C>
WIRELESS TELEPHONY
ALTEL (Kazakhstan) (2)......................................        50%
BELCEL (Belarus)............................................        50%
Tyumenruskom (Tyumen, Russia)...............................        46%
Magticom (Tbilisi, Georgia).................................        35%
Gorizont-RT (Sakha) (3).....................................        25%

FIXED AND OTHER TELEPHONY
Baltic Communications Limited (St. Petersburg, Russia)
  (2).......................................................       100%
CPY Yellow Pages (St. Petersburg, Russia) (2)...............       100%
Cardlink ZAO (Moscow, Russia) (2)...........................        85%
PeterStar (St. Petersburg, Russia) (2)......................        71%
Teleport-TP (Moscow, Russia) (2)(4).........................        56%
Comstar ZAO (Moscow, Russia) (5)............................        50%
Instaphone (Kazakhstan) (6)(7)..............................        50%
MTR-Sviaz (Moscow, Russia) (4)..............................        49%
Caspian American Telecommunications (Azerbaijan) (6)........        37%
Spectrum (Kazakhstan) (6)(8)................................        33%
Telecom Georgia (Tbilisi, Georgia)..........................        30%

INTERNET SERVICES
Clarity Data Systems Co., Ltd. (Beijing, China) (2)(9)......        58%
Huaxia Metromedia Information Technology Co., Ltd.
  (Beijing, China) (2)(9)...................................        57%
66cities.com Co., Ltd. (Beijing, China) (2)(9)..............        50%
</TABLE>

                                       26
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
OF OPERATIONS (CONTINUED)

<TABLE>
<CAPTION>
                                                                COMPANY
JOINT VENTURE (1)                                             OWNERSHIP %
-----------------                                             -----------
<S>                                                           <C>
CABLE TELEVISION
Romsat Cable TV (Bucharest, Romania) (2)....................       100%
Sun TV (Chisinau, Moldova) (2)(11)..........................        91%
Ayety TV (Tbilisi, Georgia (2)(10)..........................        85%
ATK (Archangelsk, Russia) (2)...............................        81%
Viginta (Vilnius, Lithuania) (2)............................        55%
Ala TV (Bishkek, Kyrghizstan) (2)...........................        53%
Kosmos TV (Moscow, Russia)..................................        50%
Baltcom TV (Riga, Latvia)...................................        50%
Kamalak TV (Tashkent, Uzbekistan)...........................        50%
Alma TV (Almaty, Kazakhstan)................................        50%
Cosmos TV (Minsk, Belarus)..................................        50%
Teleplus (St. Petersburg, Russia) (6)(12)...................        45%

RADIO BROADCASTING
Radio Juventus (Budapest, Hungary) (2)......................       100%
Metroradio (Bulgaria) (13)..................................       100%
Radio Katusha (St. Petersburg, Russia) (2)(15)..............        96%
Oy P4 Radio (Finland) (14)..................................        90%
Country Radio (Prague, Czech Republic) (2)..................        85%
SAC (Moscow, Russia) (2)....................................        83%
Radio One (Prague, Czech Republic) (2)......................        80%
Radio Skonto (Riga, Latvia) (2).............................        55%
Radio Georgia (Tbilisi, Georgia) (2)(15)....................        51%
AS Trio LSL (Estonia) (15)..................................        49%

PAGING
Baltcom Paging (Estonia) (2)................................        85%
CNM (Romania) (16)..........................................        54%
Eurodevelopment (Ukraine) (6)...............................        51%
Mobile Telecom (Russia) (6)(17).............................        50%
Kamalak Paging (Tashkent, Samarkand, Bukhara and Andijan,
  Uzbekistan)...............................................        50%
Alma Page (Almaty and Ust-Kamenogorsk, Kazakhstan) (6)......        50%
Baltcom Plus (Latvia) (6)...................................        50%
Paging One (Tbilisi, Georgia) (6)...........................        45%
Raduga Poisk (Nizhny Novgorod, Russia) (6)..................        45%
PT Page (St. Petersburg, Russia) (6)(12)....................        40%
Paging Ajara (Batumi, Georgia) (6)..........................        35%
Kazpage (Kazakhstan) (6)(18)................................     26-41%
</TABLE>

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

(1) Each parenthetical notes the area of operations for each operational joint
    venture or the area for which each pre-operational joint venture is
    licensed.

(2) Results of operations are consolidated with the Company's financial
    statements.

(3) The Communications Group is selling its 25% interest to one of the other
    partners in the venture.

                                       27
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
OF OPERATIONS (CONTINUED)
(4) The Company's interests in Teleport-TP and MTR-Sviaz are held through its
    wholly-owned subsidiary Technocom Limited.

(5) The Communications Group acquired a 50% stake in Comstar in December 2000.

(6) Results of operations are no longer reported.

(7) The Communication Group is currently negotiating the disposition of its
    interest in Instaphone.

(8) The Communication Group is currently negotiating the disposition of its
    interest in Spectrum.

(9) The Communications Group's majority-owned subsidiary Metromedia China
    Corporation indirectly owns 98% of Huaxia JV. Metromedia China currently
    owns 90% of Twin Poplars LLC with an option to acquire the remaining 10%,
    and Twin Poplars owns 97% of 66cities JV. Metromedia China Corporation owns
    100% of Clarity.

(10) During the quarter ended September 30, 2000, the Communications Group
    increased its ownership interest in Ayety TV to 85%. The results of this
    venture were consolidated in the fourth quarter of 2000.

(11) The Communications Group increased its ownership interest in Sun TV to 91%
    in 2000. The results of this venture are consolidated in the first quarter
    of 2001.

(12) The Communications Group has signed an agreement to dispose of 11% of PT
    Page, in exchange for an additional 14% of Teleplus. The transaction, which
    is subject to Russian Anti-Monopoly Commission approval, is expected to
    close in 2001.

(13) Metroradio was established by the Communications Group in 1999 and acquired
    radio broadcasting licenses in November 2000.

(14) The Communications Group agreed to acquire a 90% interest in Oy P4 Finland
    in November 2000 for $1.1 million conditioned on the reconfirmation of its
    licenses, which was received in February 2001. Oy P4 operates two radio
    stations in Finland. The results for this venture will be consolidated in
    the second quarter of 2001.

(15) Radio Katusha includes two radio stations operating in St. Petersburg,
    Russia. AS Trio LSL operates six radio stations in various cities throughout
    Estonia. Radio Georgia has two radio stations operating in Georgia. On
    December 14, 2000, the Communications Group acquired an additional 21% of
    Radio Katusha for $500,000.

(16) The Communications Group is commencing liquidation procedures.

(17) The Company purchased its 50% interest in Mobile Telecom and a related
    paging distribution company in June 1998 for $7.5 million plus two potential
    earnout payments to be made in 2000 and 2001 based on the operational
    results of the ventures. The Company has not yet made any earnout payments.

(18) The Communications Group is currently negotiating to dispose of its
    interests in Kazpage, which is comprised of a service entity and 10 paging
    joint ventures that provide services in Kazakhstan. The Communications
    Group's current interests in the joint venture range from 26% to 41% and its
    interest in the service entity is 51%.

                                       28
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
OF OPERATIONS (CONTINUED)
SNAPPER

Snapper manufactures Snapper-Registered Trademark- brand premium-priced power
lawnmowers, garden tillers, snowthrowers, utility vehicles and related parts and
accessories. The lawnmowers include rear engine riding mowers, front-engine
riding mowers or lawn tractors, and self-propelled and push-type walk-behind
mowers. Snapper also manufactures a line of commercial lawn and turf equipment
under the Snapper brand.

Snapper provides lawn and garden products through distribution channels to
domestic and foreign retail markets.

CERTAIN DISPOSITIONS OF ASSETS AND OTHER COMPANY INFORMATION

On November 1, 1995, as a result of the mergers of Orion Pictures Corporation
and Metromedia International Telecommunications, Inc. with and into wholly-owned
subsidiaries of the Company and MCEG Sterling Incorporated with and into the
Company, the Company changed its name from "The Actava Group Inc." to
"Metromedia International Group, Inc." As part of the November 1, 1995 merger,
the Company acquired approximately 39% of RDM Sports Group, Inc. On August 29,
1997, RDM and certain of its affiliates filed voluntary bankruptcy petitions
under chapter 11. The Company does not believe it will receive any funds in
respect of its equity interest in RDM.

Certain statements set forth below under this caption constitute
"Forward-Looking Statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934,
as amended. See "Special Note Regarding Forward-Looking Statements" on page 59.

SEGMENT INFORMATION

The following tables set forth operating results for the three months ended
March 31, 2001 and 2000, for the Company's Communications Group and Snapper.

                                       29
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)

                              SEGMENT INFORMATION
                       THREE MONTHS ENDED MARCH 31, 2001
                                 (IN THOUSANDS)

                               SEE NOTES 1 AND 2
<TABLE>
<CAPTION>
                                           COMMUNICATIONS GROUP--EASTERN EUROPE AND THE REPUBLICS OF THE FORMER
                                                                       SOVIET UNION
                                    ----------------------------------------------------------------------------------
                                                                                                   SEGMENT
                                    WIRELESS      FIXED       CABLE         RADIO                   HEAD-
                                    TELEPHONY   TELEPHONY   TELEVISION   BROADCASTING    PAGING    QUARTERS    TOTAL
                                    ---------   ---------   ----------   ------------   --------   --------   --------
<S>                                 <C>         <C>         <C>          <C>            <C>        <C>        <C>
COMBINED
Revenues..........................   $14,406     $44,462      $ 9,843       $4,861       $ 430     $    517   $ 74,519
Depreciation and amortization.....     4,121       8,386        3,812          546         104        9,110     26,079
Operating income (loss)...........     2,285       3,514       (5,340)         697         (37)     (13,644)   (12,525)
CONSOLIDATED
Revenues..........................   $ 3,030     $21,475      $ 3,318       $4,490       $ 116     $    517   $ 32,946
Gross profit......................
Depreciation and amortization.....     1,194       4,321        1,719          503          50        9,110     16,897
Operating income (loss)...........    (1,125)      2,133       (1,882)         838         (69)     (13,644)   (13,749)
UNCONSOLIDATED JOINT VENTURES
Revenues..........................   $11,376     $22,987      $ 6,525       $  371       $ 314     $     --   $ 41,573
Depreciation and amortization.....     2,927       4,065        2,093           43          54           --      9,182
Operating income (loss)...........     3,410       1,381       (3,458)        (141)         32           --      1,224
Net income (loss).................     2,688        (108)      (5,785)        (151)        (44)          --     (3,400)
Equity in income (losses) of
  unconsolidated investees (note
  2)..............................     1,668         176       (4,617)        (490)       (543)          --     (3,806)
Foreign currency loss.............                                                                                (334)
Minority interest.................                                                                                (197)
Interest expense..................
Interest income...................
Other income......................
Income tax expense................
Net loss..........................

<CAPTION>

                                    COMMUNICATIONS               CORPORATE
                                     GROUP--CHINA    SNAPPER    HEADQUARTERS   CONSOLIDATED
                                    --------------   --------   ------------   ------------
<S>                                 <C>              <C>        <C>            <C>
COMBINED
Revenues..........................
Depreciation and amortization.....
Operating income (loss)...........
CONSOLIDATED
Revenues..........................     $   209       $53,627      $    --        $ 86,782
Gross profit......................                    19,491
Depreciation and amortization.....         208         1,339           16          18,460
Operating income (loss)...........      (2,083)        5,969       (1,705)        (11,568)
UNCONSOLIDATED JOINT VENTURES
Revenues..........................     $    --
Depreciation and amortization.....          --
Operating income (loss)...........          --
Net income (loss).................          --
Equity in income (losses) of
  unconsolidated investees (note
  2)..............................          --            --           --          (3,806)
Foreign currency loss.............          --            --           --            (334)
Minority interest.................         106            --           --             (91)
Interest expense..................                                                 (7,511)
Interest income...................                                                  1,648
Other income......................                                                     30
Income tax expense................                                                 (2,338)
                                                                                 --------
Net loss..........................                                               $(23,970)
                                                                                 ========
</TABLE>

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

Note 1: The Company evaluates the performance of its operating segments based on
earnings before interest, taxes, depreciation, and amortization. The above
segment information and the discussion of the Company's operating segments is
based on operating income (loss) which includes depreciation and amortization.
In addition, the Company evaluates the performance of the Communications Group's
operating segment in Eastern Europe and the republics of the former Soviet Union
on a combined basis. The Company is providing as supplemental information an
analysis of combined revenues and operating income (loss) for its consolidated
and unconsolidated joint ventures in Eastern Europe and the republics of the
former Soviet Union.

Note 2: Equity in income (losses) of unconsolidated investees reflects
elimination of intercompany interest expense.

                                       30
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)

                              SEGMENT INFORMATION
                       THREE MONTHS ENDED MARCH 31, 2000
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                          COMMUNICATIONS GROUP--EASTERN EUROPE AND THE REPUBLICS OF THE FORMER
                                                                      SOVIET UNION
                                    ---------------------------------------------------------------------------------
                                                                            RADIO                 SEGMENT
                                    WIRELESS      FIXED       CABLE        BROAD-                  HEAD-
                                    TELEPHONY   TELEPHONY   TELEVISION     CASTING      PAGING    QUARTERS    TOTAL
                                    ---------   ---------   ----------   -----------   --------   --------   --------
<S>                                 <C>         <C>         <C>          <C>           <C>        <C>        <C>
COMBINED
Revenues..........................   $19,911     $27,489      $ 9,386      $5,298       $2,769    $    679   $ 65,532
Depreciation and amortization.....     5,813       5,400        3,198         331          246       8,304     23,292
Operating income (loss)...........     3,030         598         (226)        310         (231)    (12,519)    (9,038)
CONSOLIDATED
Revenues..........................   $ 3,494     $20,257      $ 1,530      $4,753       $  532    $    679   $ 31,245
Gross profit......................
Depreciation and amortization.....     1,298       4,009          682         278           72       8,304     14,643
Operating income (loss)...........      (899)      2,489         (380)        329           (6)    (12,519)   (10,986)
UNCONSOLIDATED JOINT VENTURES
Revenues..........................   $16,417     $ 7,232      $ 7,856      $  545       $2,237    $     --   $ 34,287
Depreciation and amortization.....     4,515       1,391        2,516          53          174          --      8,649
Operating income (loss)...........     3,929      (1,891)         154         (19)        (225)         --      1,948
Net income (loss).................     1,320      (2,863)      (1,910)        (52)        (508)         --     (4,013)
Equity in income (losses) of
  unconsolidated investees (note
  2)..............................     2,549      (1,524)        (393)        (37)        (345)         --        250
Foreign currency loss.............                                                                               (478)
Minority interest.................                                                                               (638)
Interest expense..................
Interest income...................
Gain on settlement of option......
Income tax expense................
Net loss..........................

<CAPTION>

                                    COMMUNICATIONS               CORPORATE
                                     GROUP--CHINA    SNAPPER    HEADQUARTERS   CONSOLIDATED
                                    --------------   --------   ------------   ------------
<S>                                 <C>              <C>        <C>            <C>
COMBINED
Revenues..........................
Depreciation and amortization.....
Operating income (loss)...........
CONSOLIDATED
Revenues..........................     $    --       $50,182      $    --        $ 81,427
Gross profit......................                    17,563
Depreciation and amortization.....          52         1,479           17          16,191
Operating income (loss)...........      (1,905)        4,165       (1,351)        (10,077)
UNCONSOLIDATED JOINT VENTURES
Revenues..........................     $    --
Depreciation and amortization.....          --
Operating income (loss)...........          --
Net income (loss).................          --
Equity in income (losses) of
  unconsolidated investees (note
  2)..............................          --            --           --             250
Foreign currency loss.............          --            --           --            (478)
Minority interest.................       1,457            --           --             819
Interest expense..................                                                 (7,928)
Interest income...................                                                    891
Gain on settlement of option......                                                  2,500
Income tax expense................                                                 (2,508)
                                                                                 --------
Net loss..........................                                               $(16,531)
                                                                                 ========
</TABLE>

                                       31
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)

RESULTS OF OPERATION--THREE MONTHS ENDED MARCH 31, 2001 COMPARED TO THREE MONTHS
  ENDED
  MARCH 31, 2000

LEGEND

C = Consolidated
D = Dissolution
E = Equity method
P = Pre-operational
L = Liquidated
N/A = Not applicable
N/M = Not meaningful

COMMUNICATIONS GROUP--EASTERN EUROPE AND THE REPUBLICS OF THE FORMER SOVIET
  UNION

Operations in Eastern Europe and the republics of the former Soviet Union
provide the following services: (i) wireless telephony; (ii) fixed telephony;
(iii) cable television; (iv) radio broadcasting; and (v) paging. Certain of the
Communications Group's ventures pay management fees to their shareholders. The
figures presented for the ventures reflect all payments of such fees (i.e.
management fees are included in operating expenses, the same as other expenses
of the ventures). Certain of the Communications Group's investments have been
written down to zero. If the Communications Group is no longer funding their
operations, the results of these ventures have not been reported.

WIRELESS TELEPHONY

The following sets forth the names of the Communications Group's wireless
telephony ventures, its ownership percentage as of March 31, 2001, and
accounting treatment for the three months ended March 31, 2001 and 2000:

<TABLE>
<CAPTION>
                                                                                 MARCH 31,
                                                                            -------------------
VENTURE                                                       OWNERSHIP %     2001       2000
-------                                                       -----------   --------   --------
<S>                                                           <C>           <C>        <C>
ALTEL (Almaty, Kazakhstan)..................................      50%         C           C
BELCEL (Minsk, Belarus).....................................      50%         E           E
Tyumenruskom (Tyumen, Russia)...............................      46%         E           E
Magticom (Tbilisi, Georgia).................................      35%         E           E
Baltcom GSM* (Latvia).......................................      22%        N/A          E
</TABLE>

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

* -- In October 2000, the Communications Group sold its indirect 22% interest.

The following table sets forth the revenues and operating loss for consolidated
wireless telephony ventures (in thousands):

<TABLE>
<CAPTION>
                                                                                      % CHANGE
WIRELESS TELEPHONY--CONSOLIDATED                                2001       2000     2001 TO 2000
--------------------------------                              --------   --------   ------------
<S>                                                           <C>        <C>        <C>
Revenues....................................................  $ 3,030     $3,494        (13)%
Operating loss..............................................  $(1,125)    $ (899)        25%
</TABLE>

REVENUES.  Wireless telephony consolidated revenues for the first quarter of
2001 amounted to $3.0 million and were attributable to ALTEL, the Kazakhstan
D-AMPS operator. ALTEL's revenue for the corresponding period in 2000 amounted
to $3.5 million. The company's performance for the first

                                       32
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
quarter of 2001 was adversely affected by strong competition from Kazakhstan's
two GSM operators and by increased fraud problems involving 'cloned' cellular
telephones. ALTEL is purchasing additional anti-fraud equipment which is
expected to be installed in mid-2001.

OPERATING LOSS.  ALTEL generated an operating loss of $1.1 million for the first
quarter of 2001, which was in line with the prior year first quarter's operating
loss. In spite of lower revenues generated by ALTEL in 2001, operating loss
levels were kept in line with 2000 due to management's efforts to reduce costs.
However, continued competition in the remaining part of 2001 is likely to have
continued adverse effects on the venture's operating results, as are the
venture's fraud problems until new anti-cloning equipment is installed.

The following table sets forth the revenues, operating income, net income and
equity in income of the unconsolidated wireless telephony joint ventures which
are recorded under the equity method (in thousands):

<TABLE>
<CAPTION>
                                                                                      % CHANGE
WIRELESS TELEPHONY--UNCONSOLIDATED                              2001       2000     2001 TO 2000
----------------------------------                            --------   --------   ------------
<S>                                                           <C>        <C>        <C>
Revenues....................................................  $11,376    $16,417        (31)%
Operating income............................................  $ 3,410    $ 3,929        (13)%
Net income..................................................  $ 2,688    $ 1,320        104%
Equity in income of joint ventures..........................  $ 1,668    $ 2,549        (35)%
</TABLE>

EQUITY IN INCOME OF JOINT VENTURES.  The Communications Group's share in income
from investments in wireless telephony ventures for the first quarter of 2001
amounted to $1.7 million, compared to $2.5 million in the first quarter of 2000.
The results for 2001 were primarily attributable to the Communications Group's
GSM wireless operation in Georgia. The results for 2000 were primarily
attributable to GSM operations in Latvia and Georgia. The Communications Group
sold its 22% interest of Baltcom GSM, the Latvian GSM operation, in the third
quarter of 2000. For the first quarter of 2000 Baltcom GSM's revenues amounted
to $8.3 million with operating income of $1.1 million.

Magticom's first quarter of 2001 revenues were $8.7 million, a 32% increase on
first quarter of 2000 revenues of $6.6 million due to strong subscriber growth.
As a result of the above, Magticom achieved net income of $3.3 million in the
first three months of 2001, as compared to $3.2 million during the first three
months of 2000. Magticom's first quarter 2000 results were positively affected
by the settlement of a legal claim of $1.8 million in the early part of that
year. In the remaining part of 2001, Magticom's operating results are likely to
be adversely affected by the emergence of two alternative GSM operations in
Georgia in late 2000.

The above results also include BELCEL, which operates an NMT 450 wireless
network in Belarus and Tyumenruscom, the D-AMPS operator in Tyumen, Russia.
During the first quarter of 2001 these ventures jointly generated revenues of
$2.7 million and operating losses of $496,000, as compared with revenues of
$1.5 million and operating losses of $517,000 in the first quarter of 2000. Both
of the ventures experienced subscriber growth leading to increased revenues in
the first quarter 2001 compared to the corresponding period in 2000. However,
pressure on profit margins and increased operating costs caused no improvement
in first quarter 2001 operating results as compared with the prior year.

                                       33
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
FIXED TELEPHONY

The following sets forth the names of the Communications Group's fixed telephony
ventures, its ownership percentage as of March 31, 2001, and accounting
treatment for the three months ended

March 31, 2001 and 2000:

<TABLE>
<CAPTION>
                                                                                 MARCH 31,
                                                                            -------------------
VENTURE                                                       OWNERSHIP %     2001       2000
-------                                                       -----------   --------   --------
<S>                                                           <C>           <C>        <C>
Technocom (Moscow, Russia)..................................      100%         C         C
Baltic Communications (St Petersburg, Russia)...............      100%         C         C
CPY Yellow Pages (St Petersburg, Russia)....................      100%         C         C
PeterStar (St Petersburg, Russia)...........................       71%         C         C
Comstar* (Moscow, Russia)...................................       50%         E        N/A
Instaphone** (Kazakhstan)...................................       50%         E         E
MTR Sviaz...................................................       49%         E         E
Caspian American Telecommunications** (Azerbaijan)..........       37%         E         E
Spectrum** (Kazakhstan).....................................       33%         E         E
Telecom Georgia (Tbilisi, Georgia)..........................       30%         E         E
</TABLE>

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

* -- Acquired in December 2000.

** -- Results not reported.

The following table sets forth the revenues and operating income for the
consolidated fixed telephony ventures (in thousands):

<TABLE>
<CAPTION>
                                                                                      % CHANGE
FIXED TELEPHONY--CONSOLIDATED                                   2001       2000     2001 TO 2000
-----------------------------                                 --------   --------   ------------
<S>                                                           <C>        <C>        <C>
Revenues....................................................  $21,475    $20,257          6%
Operating income............................................  $ 2,133    $ 2,489        (14)%
</TABLE>

REVENUES.  Fixed telephony consolidated revenues for the first quarter of 2001
amounted to $21.5 million as compared with $20.3 million for the first quarter
of 2000. The results of operations were primarily attributable to PeterStar and
Technocom.

In the first three months of 2001 PeterStar generated revenues of $11.9 million
as compared to $13.0 million in the same period in 2000. The 9% reduction in
revenue is primarily due to loss of revenue commencing in 2001 derived from
processing of transit traffic for St Petersburg's mobile telephony operators.

In the first three months of 2001, Technocom generated revenues of $7.7 million
compared with $5.2 million in the same period in 2000. Higher international and
long distance traffic volumes in the first quarter of 2001 compared to 2000
positively affected Technocom's revenues. It is believed that Technocom's
traffic levels in the remaining part of 2001 will continue to increase.

OPERATING INCOME.  During the first quarters of 2001 and 2000 fixed telephony
consolidated ventures' operating income amounted to $2.1 million. PeterStar's
operating income for the quarter was $2.9 million compared to $3.9 million for
the first quarter of 2000. PeterStar's first quarter of 2001 profitability was
adversely affected by the above loss of revenues from the St Petersburg mobile
operators. PeterStar's financial results will continue to be adversely affected
by this loss of traffic and future increased competition in St. Petersburg.
Technocom generated an operating loss of $578,000

                                       34
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
during the first quarter of 2001 compared to an operating loss of $539,000 in
the first quarter of 2000. Higher revenues at Technocom were offset by lower
operating margins and increased operating costs.

The following table sets forth the revenues, operating income (loss), net loss
and equity in income (losses) of the unconsolidated fixed telephony joint
ventures recorded under the equity method (in thousands):

<TABLE>
<CAPTION>
                                                                                      % CHANGE
FIXED TELEPHONY--UNCONSOLIDATED                                 2001       2000     2001 TO 2000
-------------------------------                               --------   --------   ------------
<S>                                                           <C>        <C>        <C>
Revenues....................................................  $22,987    $ 7,232         218%
Operating income (loss).....................................  $ 1,381    $(1,891)        N/M
Net loss....................................................  $  (108)   $(2,863)       (96)%
Equity in income (losses) of joint ventures.................  $   176    $(1,524)        N/M
</TABLE>

EQUITY IN INCOME (LOSSES) OF JOINT VENTURES.  The Communications Group's equity
in income from investments in fixed telephony ventures for the first quarter of
2001 amounted to $176,000 as compared with losses of $1.5 million in the first
quarter of 2000. These results were attributable mainly to the operations of
Comstar, a fixed line operator in Moscow, in which a 50% interest was acquired
by the Communications Group during the fourth quarter of 2000, and also to
Telecom Georgia.

Comstar generated first quarter of 2001 revenues of $16.8 million and operating
income of $2.1 million as compared to first quarter of 2000 revenues of $14.6
million and operating profits of $770,000. The Communications Group began
recording its equity share of Comstar's results from December 1, 2000.

In the first three months of 2001, Telecom Georgia generated revenues of
$5.9 million compared to revenues of $6.2 million in the first quarter of 2000,
a reduction of 5% due to tariff pressure caused by local competition. The
venture's first quarter of 2001 operating losses amounted to $701,000 as
compared to $1.1 million in the first quarter of 2000. The improvement was due
to more advantageous interconnect costs negotiated by the venture.

Since January 1, 2001, the results of CAT have not been reported. In the fourth
quarter of 2000 the Company adjusted to zero the carrying value of its
investment in CAT in view of an inability to develop its customer base. During
the first quarter of 2000, CAT generated revenues of $561,000 and recorded
operating losses and net losses of $807,000 and $1.2 million respectively.

The above results also include those of MTR Sviaz which operates a Moscow-based
telephony network using fiber optic technology. During the first quarter of
2001, MTR Sviaz generated revenues of $295,000 and an operating loss of $20,000,
as compared to revenues of $451,000 and operating income of $64,000 in the first
quarter of 2000. The venture's results were adversely affected by lower levels
of telephony traffic.

                                       35
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
OF OPERATIONS (CONTINUED)

CABLE TELEVISION

The following sets forth the names of the Communications Group's cable
television ventures, its percentage ownership as of March 31, 2001, and the
accounting treatment for the three months ended March 31, 2001 and 2000:

<TABLE>
<CAPTION>
                                                                                     MARCH 31,
                                                                               ----------------------
VENTURE                                                       OWNERSHIP %        2001          2000
-------                                                       -----------      --------      --------
<S>                                                           <C>              <C>           <C>
Romsat Cable TV (Bucharest, Romania)........................      100%            C             C
Sun TV (Chisinau, Moldova)..................................       91%            C             E
Ayety TV (Tbilisi, Georgia).................................       85%            C             E
ATK (Archangelsk, Russia)...................................       81%            C             C
Viginta (Vilnius, Lithuania)................................       55%            C             C
Ala TV (Bishkek, Kyrgyzstan)................................       53%            C             C
Kosmos TV (Moscow, Russia)..................................       50%            E             E
Baltcom TV (Riga, Latvia)...................................       50%            E             E
Kamalak TV (Tashkent, Uzbekistan)...........................       50%            E             E
Alma TV (Almaty, Kazakhstan)................................       50%            E             E
Cosmos TV (Minsk, Belarus)..................................       50%            E             E
Teleplus (St. Petersburg, Russia)...........................       45%            E             E
</TABLE>

The following table sets forth the revenues and operating loss for consolidated
cable television ventures (in thousands):

<TABLE>
<CAPTION>
                                                                                      % CHANGE
CABLE TELEVISION--CONSOLIDATED                                  2001       2000     2001 TO 2000
------------------------------                                --------   --------   ------------
<S>                                                           <C>        <C>        <C>
Revenues....................................................  $ 3,318     $1,530        117%
Operating loss..............................................  $(1,882)    $ (380)       N/M
</TABLE>

REVENUES.  Cable television operations generated consolidated revenues of
$3.3 million in the first three months of 2001, representing a 117% increase on
first quarter of 2000 consolidated revenues of $1.5 million. The majority of
consolidated revenues were attributable to Romsat, Viginta, Ayety TV, ATK and
Sun TV. The increases in revenues and operating losses were due to the
consolidation of Ayety TV from the fourth quarter of 2000 and Sun TV from the
first quarter of 2001. These ventures were recorded under the equity method in
2000.

Romsat reported first quarter of 2001 revenues of $1.5 million, as compared to
first quarter of 2000 revenues of $940,000 due to increased subscriber levels in
connection with the acquisition of the Devasat operation in 2000. Viginta
generated revenues of $366,000 in the first three months of 2001, representing
an increase of 14% on first quarter of 2000 revenues of $320,000 attributable to
better programming leading to higher subscriber numbers. ATK reported revenues
of $246,000 for the first quarter of 2001, representing a marginal increase on
revenues for the same period in 2000. The Company acquired a majority interest
in Ayety TV in the fourth quarter of 2000. Ayety TV generated first quarter of
2001 revenues of $492,000. For the corresponding period of 2000, Ayety TV had
revenues of $496,000 which were included in revenues relating to unconsolidated
cable television ventures. Sun TV generated first quarter of 2001 revenues of
$570,000, compared to $537,000 in the corresponding period of 2000, when the
venture's results were included in those of unconsolidated cable television
ventures.

                                       36
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
OF OPERATIONS (CONTINUED)
For the remainder of 2001 consolidated revenues arising from cable operations
are expected to continue to grow as a result of improved programming, network
expansion, tariff increases and possible acquisitions.

OPERATING LOSS.  Cable television reported consolidated operating losses for the
first three months of 2001 of $1.9 million, compared to first quarter of 2000
operating losses of $380,000. Romsat reported first quarter of 2001 operating
losses of $497,000 compared to $36,000 for the same period in 2000, due mainly
to higher goodwill amortization charges following network acquisitions in late
1999 and 2000. Viginta generated a first quarter of 2001 operating loss of
$66,000, a $74,000 improvement on the corresponding prior year period primarily
due to the venture's increased revenues.

ATK reported first quarter of 2001 operating losses of $146,000, as compared to
first quarter of 2000 operating losses of $96,000. Ayety TV generated first
quarter of 2001 operating losses of $882,000, compared to $266,000 in the
corresponding prior year period which were included in the results of operations
from unconsolidated ventures. Ayety TV's 2001 results were adversely affected by
write downs of inventory and fixed assets of $469,000. Sun TV reported first
quarter 2001 operating losses of $193,000, a $125,000 improvement on first
quarter of 2000 losses of $318,000 due to lower than expected operating costs.

The following table sets forth the revenues, operating income (loss), net loss
and equity in losses of unconsolidated cable television joint ventures recorded
under the equity method (in thousands):

<TABLE>
<CAPTION>
                                                                                      % CHANGE
CABLE TELEVISION--UNCONSOLIDATED                                2001       2000     2001 TO 2000
--------------------------------                              --------   --------   ------------
<S>                                                           <C>        <C>        <C>
Revenues....................................................  $ 6,525    $ 7,856        (17)%
Operating income (loss).....................................  $(3,458)   $   154        N/M
Net loss....................................................  $(5,785)   $(1,910)       203%
Equity in losses of joint ventures..........................  $(4,617)   $  (393)       N/M
</TABLE>

EQUITY IN LOSSES OF JOINT VENTURES.  The Communications Group's share in losses
from equity investments in cable television ventures in the first quarter of
2001 amounted to $4.6 million compared to losses of $393,000 in the first
quarter of 2000. The operating results for unconsolidated cable television
ventures were mainly attributable to Baltcom TV in Latvia, Kosmos TV in Moscow,
Kamalak TV in Uzbekistan and Alma TV in Kazakhstan.

Baltcom TV reported revenues of $1.7 million in the first three months of 2001,
a 6% decrease on first quarter of 2000 revenues of $1.8 million due to tariff
competition and lower than expected subscriber growth. Operating losses amounted
to $811,000 in the first three months of 2001 compared to $295,000 in the first
quarter of 2000. Operating losses in 2001 were adversely affected by a provision
for sales tax contingencies related to the venture.

Kosmos TV's revenues decreased by $325,000 in the first quarter of 2001 to
$1.3 million from $1.6 million in the first quarter of 2000 due to the effect of
competing services in Moscow. The company generated operating losses of $914,000
for the first three months of 2001 as compared with operating income of $99,000
for 2000. The venture's 2001 operating losses were impacted by reduced revenues
and a write-down of inventory of $390,000.

Kamalak TV reported first quarter of 2001 revenues of $732,000, a decrease of
$136,000 compared to the same period of 2000. The venture's operating losses for
the first quarter of 2001 amounted to $938,000 compared to operating income of
$206,000 in the first quarter of 2000. Kamalak TV's 2001

                                       37
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
OF OPERATIONS (CONTINUED)
operating results were adversely affected by inventory write downs of $203,000,
and increased programming costs and fixed asset write downs of $384,000.

Alma TV's revenues increased from $1.6 million in the first quarter of 2000 to
$1.8 million in the first quarter of 2001 due to continued marketing and
advertising efforts together with implementation of tiered subscriber pricing
policies. However, due to competitive pressure on margins, the venture reported
operating losses of $163,000 in the first quarter of 2001 compared to operating
income of $100,000 in the first quarter of 2000.

RADIO BROADCASTING

The following sets forth the names of the Communications Group's radio
broadcasting ventures, its ownership percentage as of March 31, 2001, and the
accounting treatment for the three months ended March 31, 2001 and 2000:

<TABLE>
<CAPTION>
                                                                                     MARCH 31,
                                                                               ----------------------
VENTURE                                                       OWNERSHIP %        2001          2000
-------                                                       -----------      --------      --------
<S>                                                           <C>              <C>           <C>
Radio Juventus (Budapest, Hungary)..........................      100%             C            C
Radio Katusha (St. Petersburg, Russia)......................       96%             C            C
Country Radio (Prague, Czech Republic)......................       85%             C            C
NewsTalk Radio* (Berlin, Germany)...........................       85%           N/A            C
SAC (Moscow, Russia)........................................       83%             C            C
Radio One (Prague, Czech Republic)..........................       80%             C            C
Radio Skonto (Riga, Latvia).................................       55%             C            C
Radio Georgia (Tbilisi, Georgia)............................       51%             C            C
Radio Vladivostok* (Vladivostok, Russia)....................       51%           N/A            C
Radio Nika* (Socci, Russia).................................       51%           N/A            E
AS Trio LSL (Tallinn, Estonia)..............................       49%             E            E
</TABLE>

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

* -- Sold during 2000.

The following table sets forth the revenues and operating income for
consolidated radio broadcasting ventures (in thousands):

<TABLE>
<CAPTION>
                                                                                      % CHANGE
RADIO--CONSOLIDATED                                             2001       2000     2001 TO 2000
-------------------                                           --------   --------   ------------
<S>                                                           <C>        <C>        <C>
Revenues....................................................   $4,490     $4,753         (6)%
Operating income............................................   $  838     $  329        155%
</TABLE>

REVENUES.  Radio operations generated consolidated revenues of $4.5 million in
the first quarter of 2001, representing a 6% decrease on first quarter of 2000
revenues of $4.8 million. The majority of revenues were derived from Radio
Juventus in Budapest, SAC in Moscow, and Radio Katusha in St. Petersburg.

Radio Juventus in the first quarter of 2001 had revenues of $1.1 million, 45%
lower than in the same period in 2000. The decrease was due to the continued
effect of competition from the new national Hungarian radio network and lower
than expected network coverage in the regions as well as the devaluation of the
Hungarian forint. In Russia, SAC and Radio Katusha's revenues rose from
$1.3 million and $574,000, respectively, in the first quarter of 2000 to
$2.1 million and $652,000,

                                       38
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
OF OPERATIONS (CONTINUED)
respectively, in the first quarter of 2001. The increase was due to continued
growth in the Russian advertising market.

OPERATING INCOME.  In the first quarter of 2001, radio operations generated
operating income of $838,000 compared to $329,000 during the first three months
of 2000. First quarter of 2001 profitability was favorably affected by increased
revenues at SAC and Radio Katusha. Together these ventures generated operating
income of $1.2 million in the first quarter of 2001 compared to $755,000 in the
same period in 2000. Radio Juventus generated operating income of $227,000, a
10% decrease on the first quarter of 2000 operating income of $252,000 due to
the reduced revenues described above. First quarter of 2000 operating results
were adversely affected by News Talk Radio, Germany, which generated operating
losses of $867,000 for that period. The Communications Group's interest in News
Talk Radio was disposed of in the second quarter of 2000.

The following table sets forth the revenues, operating loss, net loss and equity
in losses of unconsolidated radio joint ventures recorded under the equity
method (in thousands):

<TABLE>
<CAPTION>
                                                                                      % CHANGE
RADIO--UNCONSOLIDATED                                           2001       2000     2001 TO 2000
---------------------                                         --------   --------   ------------
<S>                                                           <C>        <C>        <C>
Revenues....................................................   $ 371       $545          (32)%
Operating loss..............................................   $(141)      $(19)         N/M
Net loss....................................................   $(151)      $(52)         190%
Equity in losses of joint ventures..........................   $(490)      $(37)         N/M
</TABLE>

EQUITY IN LOSSES OF JOINT VENTURES.  The Communications Group's share in losses
from equity investments in radio ventures amounted to $490,000 in the first
quarter of 2001, compared to losses of $37,000 in the first quarter of 2000. The
2001 results were attributable to Radio Trio, Tallinn, Estonia, which generated
revenues of $371,000 during the first three months of 2001 compared to $524,000
during the same period in 2000. The decrease in revenues was attributable to
increased competition and local restrictions on pricing. As a result, Radio Trio
reported first quarter of 2001 operating losses of $140,000 as compared with a
first quarter of 2000 operating losses of $16,000.

The Communications Group disposed of its interest in Radio Nika during the third
quarter of 2000.

PAGING

OVERVIEW.  In 1999, the Communications Group stopped funding most paging
operations and since that time has continued to manage almost all of its paging
ventures on a cash break even basis. Since 1999 the Communications Group has
managed its paging businesses to levels not requiring significant additional
funding as it continued to review options to maximize the value of its paging
investments. The Company has adjusted to zero the carrying value of its
investments in all paging operations (except Kamalak Paging) which were recorded
under the equity method, and unless it provides future funding, is no longer
recording its proportionate share of any future net losses of these ventures.

                                       39
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
OF OPERATIONS (CONTINUED)
The following sets forth the names of the Communications Group's paging
ventures, its ownership percentage as of March 31, 2001, and the accounting
treatment for the three months ended March 31, 2001 and 2000:

<TABLE>
<CAPTION>
                                                                                     MARCH 31,
                                                                               ----------------------
VENTURE                                                       OWNERSHIP %        2001          2000
-------                                                       -----------      --------      --------
<S>                                                           <C>              <C>           <C>
Baltcom Paging (Tallinn, Estonia)...........................        85%           C             C
CNM * (Romania).............................................        54%           C             C
Eurodevelopment ** (Ukraine)................................        51%           E             C
Kamalak Paging (Tashkent, Samarkand, Bukhara and Andijan,
  Uzbekistan)...............................................        50%           E             E
Mobile Telecom** (Russia)...................................        50%           E             E
Baltcom Plus ** (Riga, Latvia)..............................        50%           E             E
Alma Page ** (Almaty and Ust-Kamenogorsk, Kazakhstan).......        50%           E             E
Paging One ** (Tbilisi, Georgia)............................        45%           E             E
Raduga Poisk ** (Nizhny Novgorod, Russia)...................        45%           E             E
Kazpage ** (Kazakhstan).....................................     26-41%           E             E
PT Page ** (St. Petersburg, Russia).........................        40%           E             E
Paging Ajara ** (Batumi, Georgia)...........................        35%           E             E
</TABLE>

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

* -- In liquidation.
** -- Results not reported.

The following table sets forth the revenues and operating loss for consolidated
paging ventures (in thousands):

<TABLE>
<CAPTION>
                                                                                      % CHANGE
PAGING--CONSOLIDATED                                            2001       2000     2001 TO 2000
--------------------                                          --------   --------   ------------
<S>                                                           <C>        <C>        <C>
Revenues....................................................    $116       $532         (78)%
Operating loss..............................................    $(69)      $ (6)        N/M
</TABLE>

REVENUES.  The Communications Group's paging ventures generated consolidated
revenues of $116,000 in the first quarter of 2001, representing a 78% decrease
from revenues of $532,000 for the same period in 2000. The decrease was due to
the fact that results for Eurodevelopment and CNM are no longer consolidated in
2001. First quarter of 2001 revenues were attributable to Baltcom Estonia and
amounted to $116,000 as compared with $118,000 in the corresponding period of
2000. For the first quarter of 2000, Eurodevelopment reported revenues of
$230,000 and operating losses of $22,000. The long-lived assets of that venture
were written off and the Communications Group no longer controls these
operations. CNM, Romania, reported first quarter of 2000 revenues of $184,000.
That company's operations are in the process of being liquidated by the
Communications Group.

OPERATING LOSS.  Consolidated operating losses arising from paging operations
amounted to $69,000 in the first quarter of 2001 and were entirely attributable
to Baltcom Estonia. First quarter of 2000 operating losses of $6,000 were
attributable to Eurodevelopment, which generated operating losses of $22,000,
CNM, which had an operating income of $11,000, and Baltcom Estonia, which
reported operating income of $5,000. Baltcom Estonia's first quarter results as
compared to the corresponding prior year period were adversely affected by
falling margins related to competition from the wireless telephony market.

                                       40
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
OF OPERATIONS (CONTINUED)
The following table sets forth the revenues, operating income (loss), net loss
and equity in losses of unconsolidated paging joint ventures recorded under the
equity method (in thousands):

<TABLE>
<CAPTION>
                                                                                      % CHANGE
PAGING--UNCONSOLIDATED                                          2001       2000     2001 TO 2000
----------------------                                        --------   --------   ------------
<S>                                                           <C>        <C>        <C>
Revenues....................................................   $ 314      $2,237        (86)%
Operating income (loss).....................................   $  32      $ (225)       N/M
Net loss....................................................   $ (44)     $ (508)       (91)%
Equity in losses of joint ventures..........................   $(543)     $ (345)        57%
</TABLE>

EQUITY IN LOSSES OF JOINT VENTURES.  The Communications Group's share of losses
from equity investments in paging ventures amounted to $543,000 in the first
quarter of 2001 compared to $345,000 in the same period in 2000.

The first quarter of 2001 results of Mobile Telecom are not reported. Since the
Communications Group wrote down its remaining investment of $500,000 in the
first quarter of 2001 to zero, it has discontinued equity accounting for this
venture. The Communications Group also recorded an impairment charge of $4.2
million in the fourth quarter of 2000 in relation to this company. Mobile
Telecom generated revenues of $2.0 million and operating losses of $140,000
during the first quarter of 2000 as the venture continued to experience the
effects of strong competition from the wireless telephony sector.

In Uzbekistan, Kamalak Paging reported revenues of $314,000 for the first three
months of 2001 as compared with $287,000 for the same period last year. The
venture's revenues improved as a result of its market position and the
relatively undeveloped wireless telephony sector in the region. Kamalak Paging
reported first quarter of 2001 operating income of $33,000, an improvement on
first quarter of 2000's operating losses of $85,000 due to increased revenues as
described above.

SEGMENT HEADQUARTERS

Segment headquarters operations relate to executive, administrative, logistical
and joint venture support activities. The following table sets forth the
consolidated revenues and operating losses for the segment headquarters (in
thousands):

<TABLE>
<CAPTION>
                                                                                      % CHANGE
                                                                2001       2000     2001 TO 2000
                                                              --------   --------   ------------
<S>                                                           <C>        <C>        <C>
Revenues....................................................  $    517   $    679       (24)%
Operating loss..............................................  $(13,644)  $(12,519)        9%
</TABLE>

REVENUES.  Decreased revenues in the first quarter of 2001 compared to the same
period in the prior year reflected a drop in programming and management fee
revenues from the Communications Group's unconsolidated cable television and
radio businesses, whose revenues dropped in the first quarter of 2001 as
compared with the first quarter of 2000.

OPERATING LOSS.  Operating losses for the first three months of 2001 amounted to
$13.6 million, a 9% increase on 2000 first quarter operating losses of
$12.5 million. The increase in operating losses was principally from non-cash
depreciation and amortization charges of $9.1 million for the first quarter of
2001 as compared with $8.3 million for the same period of 2000.

                                       41
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)

FOREIGN CURRENCY LOSS AND MINORITY INTEREST

The following table sets forth foreign currency loss and minority interest for
the consolidated operations of the Communications Group--Eastern Europe and the
republics of the former Soviet Union.

<TABLE>
<CAPTION>
                                                                                      % CHANGE
                                                                2001       2000     2001 TO 2000
                                                              --------   --------   ------------
<S>                                                           <C>        <C>        <C>
Foreign currency loss.......................................   $(334)     $(478)        (30)%
Minority interest...........................................   $(197)     $(638)        (69)%
</TABLE>

Foreign currency losses for the first quarter of 2001 amounted to $334,000,
compared to $478,000 in the first quarter of 2000 and represented the
remeasurement of the ventures' financial statements, in all cases using the U.S.
dollar as the functional currency. U.S. dollar transactions are shown at their
historical value. Monetary assets and liabilities denominated in local
currencies are translated into U.S. dollars at the prevailing period-end
exchange rate. All other assets and liabilities are translated at historical
exchange rates. Results of operations have been translated using the monthly
average exchange rates. The foreign currency loss also relates to the
transaction differences resulting from the use of these different rates. The
first quarter 2001 foreign currency loss was due primarily to the fluctuation of
the U.S. dollar against the local currency in Romania.

Minority interest represents the allocation of losses by the Communications
Group's majority owned subsidiaries and joint ventures to its minority ownership
interest.

COMMUNICATIONS GROUP--CHINA

The following sets forth the names of the Communications Group's China ventures,
its ownership percentage as of March 31, 2001, and the accounting treatment for
the three months ended March 31, 2001 and 2000:

<TABLE>
<CAPTION>
                                                                                 MARCH 31,
                                                                            -------------------
JOINT VENTURE/SUBSIDIARY                                      OWNERSHIP %     2001       2000
------------------------                                      -----------   --------   --------
<S>                                                           <C>           <C>        <C>
INTERNET SERVICES--E-COMMERCE
Clarity Data Systems Co., Ltd. (Beijing, China).............      100%       C          N/A
Huaxia Metromedia Information Technology Co., Ltd (Beijing,
  China)....................................................       98%       C           P
66cities.com Co., Ltd. (Beijing, China).....................       87%       C          N/A
</TABLE>

CHINA E-COMMERCE JOINT VENTURE INFORMATION

In May 1999, MCC's wholly-owned subsidiary, AAT, entered into a joint venture
agreement with All Warehouse Commodity Electronic Commerce Information
Development Co., Ltd., a Chinese trading company, to form Huaxia Metromedia
Information Technology Co., Ltd. At time of formation, AAT owned a 49% equity
interest in Huaxia JV. Huaxia JV was established in July 1999 to develop
software and provide technical services supporting operation of electronic
commerce computer information systems for China-based corporate clients.

Since mid-2000, its scope of business activity has broadened to encompass
development and support of general e-commerce and enterprise management
software, aimed principally at Chinese enterprise clients. Huaxia JV will also
provide the software needed by other of MCC's current and planned
e-commerce-related business units in China. On September 20, 2000, the Chinese
government approved

                                       42
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
a revised joint venture contract for Huaxia JV whereby AAT's ownership interest
in the joint venture was increased to 98%. AAT's only material cost for its
increased ownership position in Huaxia JV was a corresponding increase in its
obligation for future registered capital contributions. On April 10, 2001, the
Chinese government approved Huaxia to become a wholly foreign-owned enterprise
and AAT obtained 100% ownership. Huaxia's business license remains unchanged as
to permitted business activities and capitalization requirements.

AAT accounted for Huaxia JV as an equity method investment prior to assuming 98%
ownership and control of the venture on September 20, 2000. For the three months
ended March 31, 2000, Huaxia JV had not commenced material operations. The
Company has consolidated its results of operations of Huaxia JV subsequent to
September 30, 2000.

On July 24, 2000, MCC purchased an 80% interest in Twin Poplars LLC, a Delaware
limited liability company, for $300,000 and obtained options to acquire the
remaining 20% equity interest for $75,000. On August 31, 2000, the Company
exercised its option to acquire an additional 10% equity interest in Twin
Poplars, at which time Twin Poplars owned a 97% registered capital interest in
Beijing 66cities.com Company, Limited, a Chinese-foreign equity joint venture
established to engage in information content provision and e-commerce-related
services in China. Twin Poplars operates as a holding company for 66cities JV
and has no operations or assets other than its interests in this venture.

By virtue of its ownership interest in Twin Poplars, as of March 31, 2001 MCC
owns an indirect 87% interest in the 66cities JV.

66cities JV provides information content related services pertinent to
publication of travel and entertainment guides in print and electronic formats.
66cities JV currently supports publication by Chinese interests of the weekly
English-language magazine "City Weekend", distributed in Beijing and Shanghai,
and of various Chinese and English language guides in book format. It also
manages the 66cities.com website, which offers comparable information via the
Internet, hosts links to various Chinese travel and entertainment related
services and offers various travel / entertainment products for sale.

On March 20, 2001, the Company completed registration and establishment of
Clarity. The approved total investment level for Clarity is $5.0 million of
which $2.5 million must be in the form of registered capital. The Company
invested the initial $375,000 of Clarity's register capital on April 4, 2001.

Clarity is licensed to provide database management and related application
services and software. It focuses on direct marketers and retailers selling to
China's consumer markets, offering Customer Relationship Management applications
and services. As of March 31, 2001 Clarity had conducted no material business
operations.

RESULTS OF OPERATIONS

The following table sets forth revenues, operating loss, equity in losses of
joint ventures and minority interests for the Communications Group's operations
in China (in thousands):

<TABLE>
<CAPTION>
                                                                                      % CHANGE
                                                                2001       2000     2001 TO 2000
                                                              --------   --------   ------------
<S>                                                           <C>        <C>        <C>
Revenues....................................................  $   209    $    --        N/A
Operating loss..............................................  $(2,083)   $(1,905)         9%
Equity in losses of joint ventures..........................  $    --    $    --        N/A
Minority interests..........................................  $   106    $ 1,457        (93)%
</TABLE>

                                       43
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
REVENUES.  China operations generated consolidated revenues of $209,000 in the
first quarter of 2001 which represent the operations of 66cities JV and
Huaxia JV. The Communications Group's operations in China had no other
consolidated revenue in the first quarter of 2000.

OPERATING LOSS.  The operating loss increased $178,000 to $2.1 million for the
three months ended March 31, 2001 as compared to the same period in 2000. The
slight increase in operating loss is principally attributable to commencing with
the China e-commerce business in the first quarter of 2001. Operating loss in
the first quarter of 2000 reflected professional fees incurred in connection
with the termination of the Company's joint venture cooperation agreements with
China Unicom and the resulting reduction of overhead costs.

EQUITY IN LOSSES OF JOINT VENTURES.  Equity in losses of the Communications
Group's telephony joint ventures in China are no longer reflected in the
Company's financial results as a result of the joint venture's signing the
settlement agreement with China Unicom on December 3, 1999.

MINORITY INTERESTS.  For the three months ended March 31, 2001 and 2000,
minority interests represents the allocation of losses to Metromedia China
Corporation's minority ownership.

INFLATION AND FOREIGN CURRENCY

During 1998 and 1999, a number of emerging market economies suffered significant
economic and financial difficulties resulting in liquidity crises, devaluation
of currencies, higher interest rates and reduced opportunities for financing.
Although the economic climate in Russia improved in 2000, the long-term
prospects for complete recovery for the economies of Russia and the other
republics of the former Soviet Union and Eastern Europe remain unclear. The
economic crisis of 1998 resulted in a number of defaults by borrowers in Russia
and other countries. Although some debt was rescheduled in 2000, a reduced level
of financing remains available to investors in these countries. The devaluation
of many of the currencies in the region in 2000 was not as marked as in previous
years but the potential still remains for future negative effects on the U.S.
dollar value of the revenues generated by certain of the Communications Group's
joint ventures and may lead to certain additional restrictions on the
convertibility of certain local currencies. Any such economic difficulties could
negatively impact the financial performance of certain of the Communications
Group's cable television, telephony, radio broadcasting and paging ventures.

Some of the Communications Group's subsidiaries and joint ventures operate in
countries where the inflation rate in the past has been high. For example,
inflation in Russia increased dramatically following the August 1998 financial
crisis and there are increased risks of inflation in Kazakhstan. The inflation
rates in Belarus have been at hyperinflationary levels for some years and as a
result, the currency has essentially lost all intrinsic value. Although the rate
of inflation in 2000 was not as high as in previous years, the risk of further
increases in the future remains possible.

While the Communications Group's subsidiaries and joint ventures attempt to
increase their subscription rates to offset increases in operating costs, there
is no assurance that they will be able to do so. Therefore, operating costs may
rise faster than associated revenue, resulting in a material negative impact on
operating results. The Company itself is generally negatively impacted by
inflationary increases in salaries, wages, benefits and other administrative
costs, the effects of which to date have not been material to the Company.

The value of the currencies in the countries in which the Communications Group
operates in the past has fluctuated, sometimes significantly. For example,
during 1998 and 1999, the value of the Russian

                                       44
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
rouble was under considerable economic and political pressure and has suffered
significant declines against the U.S. dollar and other currencies. In addition,
in 1999 local currency devaluations in Uzbekistan, Kazakhstan and Georgia, in
addition to weakening of local currencies in Austria and Germany, had an adverse
effect on the Communications Group's ventures in these countries. The
Communications Group currently does not hedge against exchange rate risk and
therefore could be negatively impacted by declines in exchange rates between the
time one of its joint ventures receives its funds in local currency and the time
it distributes these funds in U.S. dollars to the Communications Group.

The Communications Group's strategy is to minimize its foreign currency risk. To
the extent possible, the Communications Group bills and collects all revenues in
U.S. dollars or an equivalent local currency amount adjusted on a monthly basis
for exchange rate fluctuations. The Communications Group's subsidiaries and
joint ventures are generally permitted to maintain U.S. dollar accounts to
service their U.S. dollar denominated debt and current account obligations,
thereby reducing foreign currency risk. As the Communications Group's
subsidiaries and joint ventures expand their operations and become more
dependent on local currency based transactions, the Communications Group expects
that its foreign currency exposure will increase.

SNAPPER

The following table sets forth Snapper's results of operations for the three
months ended March 31, 2001 and 2000 (in thousands):

<TABLE>
<CAPTION>
                                                                                      % CHANGE
                                                                2001       2000     2001 TO 2000
                                                              --------   --------   ------------
<S>                                                           <C>        <C>        <C>
Revenues....................................................  $53,627    $50,182          7%
Gross profit................................................  $19,491    $17,563         11%
Operating income............................................  $ 5,969    $ 4,165         43%
</TABLE>

REVENUES.  Snapper's 2001 first quarter sales were $53.6 million as compared to
$50.2 million in 2000. Sales of lawn and garden equipment contributed the
majority of the revenues during both periods. Sales in 2001 were higher due to
sales of $18.7 million to Wal-Mart and new utility vehicle sales of
$1.7 million. Sales were offset by $15.1 million of lower sales to dealers due
to changes in the sales program that allow the equipment to be sold and shipped
to more closely match the retail season of March through July, and to reduce
dealer field inventory levels of commercial equipment. In 2000, Snapper notified
a number of its Commissioned Distributors and Commissioned Agents, stating that
it was not going to renew their contracts, which expired August 31, 2000.
Snapper chose not to renew these contracts in order to give it direct control
over these territories, which should allow it to lower costs and improve margins
in the future. This announcement had a negative impact on sales during the first
quarter of 2000, and it negatively impacted sales for the remainder of 2000.

GROSS PROFIT.  Gross profit during 2001 was $19.5 million as compared to
$17.6 million in 2000. The higher gross profit in 2001 was due to higher sales
noted above, plus gross margin improved to 36.3% in 2001 from 35.0% in 2000 as
Snapper continues its cost containment programs.

OPERATING INCOME.  Operating income was $6.0 million in 2001 compared to
$4.2 million in 2000. The operating profit in 2001 increased due to higher sales
and improved gross profit margins as noted above.

                                       45
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
CORPORATE HEADQUARTERS

Corporate Headquarters costs reflect the management fee paid to Metromedia
Company under the management agreement, investor relations, legal and other
professional costs, insurance and other corporate costs. The following table
sets forth the operating loss for Corporate Headquarters (in thousands):

<TABLE>
<CAPTION>
                                                                                      % CHANGE
                                                                2001       2000     2001 TO 2000
                                                              --------   --------   ------------
<S>                                                           <C>        <C>        <C>
Operating loss..............................................  $(1,705)   $(1,351)        26%
</TABLE>

OPERATING LOSS.  For the three months ended March 31, 2001 and 2000, Corporate
Headquarters had general and administrative expenses of approximately
$1.7 million and $1.4 million, respectively.

MMG CONSOLIDATED

The following table sets forth on a consolidated basis the following items for
the three months ended March 31, 2001 and 2000 (in thousands):

<TABLE>
<CAPTION>
                                                                                      % CHANGE
                                                                2001       2000     2001 TO 2000
                                                              --------   --------   ------------
<S>                                                           <C>        <C>        <C>
Interest expense............................................  $ (7,511)  $ (7,928)       (5)%
Interest income.............................................  $  1,648   $    891        85%
Other income................................................  $     30   $  2,500       N/M
Income tax expense..........................................  $ (2,338)  $ (2,508)       (7)%
Net loss....................................................  $(23,970)  $(16,531)       45%
</TABLE>

INTEREST EXPENSE.  Interest expense decreased $417,000 to $7.5 million for the
three months ended March 31, 2001 when compared to 2000. The decrease in
interest was principally due to lower interest rates and lower loan balances on
Snapper's debt.

INTEREST INCOME.  Interest income increased $757,000 to $1.6 million in 2001
when compared to 2000, principally from an increase in funds at Corporate
Headquarters for the quarter ended March 31, 2001 as compared to the same period
in the prior year.

                                       46
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)

INCOME TAX EXPENSE.  For the three months ended March 31, 2001 and 2000, the
income tax benefit that would have resulted from applying the federal statutory
rate of 35% was $7.6 million and $4.9 million, respectively. The income tax
benefit in 2001 and 2000 was reduced principally by losses attributable to
foreign operations, equity losses in joint ventures currently not deductible and
a 100% valuation allowance on the current year loss not utilized. The income tax
expense in 2001 and 2000 is principally from income taxes on the Company's
PeterStar operations.

NET LOSS INCLUDING GAIN ON SETTLEMENT OF OPTION.  Net loss increased to
$24.0 million for the three months ended March 31, 2001 from $16.5 million for
the three months ended March 31, 2000. The increase in net loss includes an
increase in operating loss of $1.5 million and an increase in equity in losses
of joint ventures of $4.1 million and a reduction in losses allocable to
minority interests of $910,000. Net loss in 2000 is net of a gain of
$2.5 million realized on the buyout of options to acquire an indirect interest
in Telecominvest, a holding company with diverse telecommunications interests in
northwest Russia.

LIQUIDITY AND CAPITAL RESOURCES

THE COMPANY

OVERVIEW.  The Company is a holding company and, accordingly, does not generate
cash flows from operations. The Company believes that its cash on hand will be
sufficient to fund the Company's working capital requirements for the remainder
of the year.

The Communications Group is dependent on the Company for significant capital
infusions to fund its operations and make acquisitions, as well as to fulfill
its commitments to make capital contributions and loans to its joint ventures.
Many of the Communications Group's joint ventures operate or invest in
businesses, such as cable television, fixed telephony and cellular
telecommunications, that are capital intensive and require significant capital
investment in order to construct and develop operating systems and market their
services. To date, such financing requirements have been funded from cash on
hand. The Company currently has approximately $40.0 million at headquarters.
Future financing requirements of the Communications Group, including future
acquisitions, will depend on available funding from the Company and on the
ability of the Communications Group's joint ventures to generate positive cash
flows, and if necessary, selective disposition of assets, alternative sources of
funding or non-payment of cash dividends on the Company's preferred stock.

In addition to funding the cash requirements of the Communications Group, the
Company has periodically funded the short-term working capital needs of Snapper.
PLD Telekom and Snapper are restricted under covenants contained in their credit
documents from making dividend payments or advances, other than certain
permitted repayments, to the Company.

On March 15, 2001, Snapper received written notice from the financial
institution that provides Snapper's dealers with floor plan financing, advising
that it considered Snapper and the Company to be in default under the terms of
the floor plan financing agreements as a result of claimed material adverse
changes in their respective financial conditions. The financial institution also
claimed that Snapper had defaulted under its agreement by failing to provide
collateral to the financial institution, notwithstanding the fact that the
agreement does not require the provision of collateral. The notice further
advised that the financing relationship would be terminated as of June 13, 2001,
and that Snapper would be required to pay a default termination fee of one
percent of the average amount floor planned with Snapper's dealers during the
previous twelve month period. Snapper and the Company disagree with the basis
for this action taken by the financial institution, and are currently contesting
the claimed defaults.

                                       47
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
If the Company is unable to come to terms with the financial institution that is
providing Snapper's floor plan financing, the Company will be required to pursue
alternative sources of financing. Alternatives include negotiating a new floor
plan financing arrangement with another financial institution or pursuing
additional working capital financing with either its existing lender or another
financial institution. The Company believes that it will either come to terms
with the current financial institution or find an alternative source of
financing. However, if the Company is unable to come to terms with the current
financial institution or find an alternative, Snapper may be required to
significantly reduce its production schedule and current operations. Under this
scenario, Snapper would be required to self-finance the receivables from its
dealers commencing June 13, 2001 and fully utilize its existing working capital
facility by the end of December 2001 to fund operations. Snapper's reduced
production levels would reduce revenues in the last quarter of 2001 and have an
adverse impact on Snapper's revenues in 2002. In addition, with reduced
production and sales in 2002, Snapper would be required to reduce operating
expenses and operate at a significantly reduced level to be able to meet its
obligations as they come due, without additional sources of financing. However,
there can be no assurances that Snapper will be able to reduce its operations to
a level that would not require additional outside funding. In the event of
adverse weather conditions or other factors which adversely impact sales further
actions may be required.

The Company will be required to pay interest on its 10 1/2% senior discount
notes issued in connection with the acquisition of PLD Telekom commencing
September 30, 2002. As a result, the Company will require additional financing
or modification of the existing terms of the 10 1/2% senior discount notes in
order to satisfy its on-going working capital requirements, debt service and
acquisition and expansion requirements. Such additional capital may be provided
through the public or private sale of equity or debt securities of the Company
or by separate equity or debt financings by the Communications Group or certain
companies of the Communications Group or proceeds from the sale of assets. No
assurance can be given that such additional financing will be available to the
Company on acceptable terms, if at all. If adequate additional funds are not
available, the Company may be required to curtail significantly its long-term
business objectives and the Company's results of operations may be materially
and adversely affected.

Management believes that its longer-term liquidity needs (including debt
service) will be satisfied through a combination of the Company's successful
implementation and execution of its growth strategy to become a global
communications and media company and the Communications Group's joint ventures
and subsidiaries achieving positive operating results and cash flows through
revenue and subscriber growth and control of operating expenses.

The Company expects to generate consolidated net losses for the foreseeable
future as the Communications Group continues to build out and market its
services.

CONVERTIBLE PREFERRED STOCK.  On September 16, 1997 the Company completed a
public offering of 4,140,000 shares of $1.00 par value, 7 1/4% cumulative
convertible preferred stock with a liquidation preference of $50.00 per share,
generating net proceeds of approximately $199.4 million. Dividends on the
preferred stock are cumulative from the date of issuance and payable quarterly,
in arrears, commencing on December 15, 1997. The Company may make any payments
due on the preferred stock, including dividend payments and redemptions (i) in
cash; (ii) through issuance of the Company's common stock or (iii) through a
combination thereof. If the Company were to elect to continue to pay the
dividend in cash, the annual cash requirement would be $15.0 million. Since its
initial dividend payment on December 15, 1997 through March 15, 2001, the
Company has paid its quarterly dividends on the preferred stock in cash. The
preferred stock is convertible at the option of the holder at any time, unless
previously redeemed, into the Company's common stock, at a conversion price of
$15.00

                                       48
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
per share equivalent to a conversion rate of 3 1/3 shares of common stock for
each share of preferred stock subject to adjustment under certain conditions.

The preferred stock is redeemable at any time on or after September 15, 2000, in
whole or in part, at the option of the Company, in cash, by delivery of fully
paid and non-assessable shares of the Company's common stock or a combination
thereof, initially at a price of $52.5375 and thereafter at prices declining to
$50.00 per share on or after September 15, 2007, plus in each case all accrued
and unpaid dividends to the redemption date. Upon any change of control, as
defined in the certificate of designation of the preferred stock each holder of
preferred stock shall, in the event that the market value at such time is less
than the conversion price of $15.00, have a one-time option to convert the
preferred stock into the Company's common stock at a conversion price equal to
the greater of (i) the market value, as of the change of control date, as
defined in the certificate of designation, and (ii) $8.00. In lieu of issuing
shares of the Company's common stock, the Company may, at its option, make a
cash payment equal to the market value of the Company's common stock otherwise
issuable.

SENIOR DISCOUNT NOTES.  In connection with the acquisition of PLD Telekom, the
Company issued $210.6 million in aggregate principal amount at maturity of its
10 1/2% Senior Discount Notes due 2007 (the "Senior Discount Notes") to the
holders of the PLD Telekom's then outstanding 14% senior discount notes due 2004
and 9% convertible subordinated notes due 2006 pursuant to an agreement to
exchange and consent, dated as of May 18, 1999, by and among the Company, PLD
Telekom and such holders.

The terms of the Senior Discount Notes are set forth in an Indenture, dated as
of September 30, 1999, between the Company and U.S. Bank Trust National
Association as Trustee. The Senior Discount Notes will mature on September 30,
2007. The Senior Discount Notes were issued at a discount to their aggregate
principal amount at maturity and will accrete in value until March 30, 2002 at
the rate of 10 1/2% per year, compounded semi-annually to an aggregate principal
amount at maturity of $210.6 million. The Senior Discount Notes will not accrue
cash interest before March 30, 2002. After this date, the Senior Discount Notes
will pay interest at the rate of 10 1/2% per year, payable semi-annually in cash
and in arrears to the holders of record on March 15 or September 15 immediately
preceding the interest payment date on March 30 and September 30 of each year,
commencing September 30, 2002. The interest on the Senior Discount Notes will be
computed on the basis of a 360-day year comprised of twelve months.

The Senior Discount Notes are general senior unsecured obligations of the
Company, rank senior in right of payment to all existing and future subordinated
indebtedness of the Company, rank equal in right of payment to all existing and
future senior indebtedness of the Company and will be effectively subordinated
to all existing and future secured indebtedness of the Company to the extent of
the assets securing such indebtedness and to all existing and future
indebtedness of the Company's subsidiaries, whether or not secured.

The Senior Discount Notes will be redeemable at the sole option of the Company
on and after March 30, 2002 only at a redemption price equal to their principal
amount plus accrued and unpaid interest, if any, up to but excluding the date of
redemption.

Upon the occurrence of a change of control of the Company (as such term is
defined in the Indenture), the holders of the Senior Discount Notes will be
entitled to require the Company to repurchase such holders' notes at a purchase
price equal to 101% of the accreted value of the Senior Discount Notes (if such
repurchase is before March 30, 2002) or 101% of the principal amount of such
notes plus accrued and unpaid interest to the date of repurchase (if such
repurchase is after March 30, 2002).

                                       49
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
The Indenture for the Senior Discount Notes limits the ability of the Company
and certain of its subsidiaries to, among other things, incur additional
indebtedness or issue capital stock or preferred stock, pay dividends on, and
repurchase or redeem their capital stock or subordinated obligations, invest in
and sell assets and subsidiary stock, engage in transactions with affiliates and
incur additional liens. The Indenture for the Senior Discount Notes also limits
the ability of the Company to engage in consolidations, mergers and transfers of
substantially all of its assets and also contains limitations on restrictions on
distributions from its subsidiaries.

COMMUNICATIONS GROUP--EASTERN EUROPE AND THE REPUBLICS OF THE FORMER SOVIET
  UNION

OVERVIEW.  The Communications Group has invested significantly (in cash or
equipment through capital contributions, loans and management assistance and
training) in its joint ventures. The Communications Group has also incurred
significant expenses in identifying, negotiating and pursuing new
telecommunications opportunities in selected emerging markets.

The Communications Group and many of its joint ventures are experiencing
continuing losses and negative operating cash flow since many of the businesses
are in the development and start-up phase of operations. The Communications
Group's primary source of funds has been from the Company in the form of
inter-company loans.

Until the Communications Group's operations generate positive cash flow, the
Communications Group will require significant capital to fund its operations,
and to make capital contributions and loans to its joint ventures. The
Communications Group relies on the Company to provide the financing for these
activities. The Company believes that as more of the Communications Group's
joint ventures commence operations and reduce their dependence on the
Communications Group for funding, the Communications Group will be able to
finance its own operations and commitments from its operating cash flow and will
be able to attract its own financing from third parties. There can be no
assurance, however, that additional capital in the form of debt or equity will
be available to the Communications Group at all or on terms and conditions that
are acceptable to the Communications Group or the Company, and as a result, the
Communications Group may continue to depend upon the Company for its financing
needs.

Credit agreements between certain of the joint ventures and the Communications
Group are intended to provide such ventures with sufficient funds for operations
and equipment purchases. The credit agreements generally provide for interest to
accrue at rates ranging from the prime rate to the prime rate plus 6% and for
payment of principal and interest from 90% of the joint venture's available cash
flow, as defined, prior to any distributions of dividends to the Communications
Group or its joint venture partners. The credit agreements also often provide
the Communications Group the right to appoint the general director of the joint
venture and the right to approve the annual business plan of the joint venture.
Advances under the credit agreements are made to the joint ventures in the form
of cash for working capital purposes, as direct payment of expenses or
expenditures, or in the form of equipment, at the cost of the equipment plus
cost of shipping. As of March 31, 2001, the Communications Group was committed
to provide funding under various charter fund agreements and credit lines in an
aggregate amount of approximately $208.7 million, of which $43.3 million
remained unfunded. The Communications Group's funding commitments under a credit
agreement are contingent upon its approval of the joint venture's business plan.
To the extent that the Communications Group does not approve a joint venture's
business plan, the Communications Group is not required to provide funds to the
joint venture under the credit line.

                                       50
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
The Communications Group's consolidated and unconsolidated joint ventures'
ability to generate positive operating results is dependent upon their ability
to attract subscribers to their systems, the sale of commercial advertising time
and their ability to control operating expenses.

FORMER PLD BUSINESSES.  PLD Telekom's operating businesses are largely
self-sustaining, and while they continue to have on-going capital requirements
associated with the development of their businesses, they have been able to pay
for capital expenditures and operational expenses out of internally generated
cash flows from operations and/or have been able to arrange their own financing,
including supplier financing. In no case is PLD Telekom specifically obligated
to provide capital to its operating businesses; it was so obligated in the past,
but all such obligations have been met.

Beginning in the first quarter of 2001, the mobile operators in St. Petersburg,
which historically accounted for a significant amount of PeterStar's traffic and
revenues, shifted their traffic to a competing network. This move, together with
increased competitive pressures in St. Petersburg, will adversely impact
PeterStar's revenues and operating income in 2001 and may also impact the level
of dividends and management fees payable by PeterStar to the Company.

MAGTICOM.  In April 1997, the Communications Group's Georgian GSM Joint Venture,
Magticom, entered into a financing agreement with Motorola, Inc. pursuant to
which Motorola agreed to finance 75% of the equipment, software and service it
provides to Magticom up to $15.0 million. Interest on the financed amount
accrues at 6-month London interbank offered rate or LIBOR plus 5% per annum,
with interest payable semi-annually. Repayment of principal with respect to each
drawdown commences twenty-one months after such drawdown with the final payment
being due 60 months after such drawdown. All drawdowns must be made within
3 years of the initial drawdown date. Magticom is obligated to provide Motorola
with a security interest in the equipment provided by Motorola to the extent
permitted by applicable law. As additional security for the financing, the
Company has guaranteed Magticom's repayment obligation to Motorola. In
June 1998, the financing agreement was amended and Motorola agreed to make
available an additional $10.0 million in financing. Interest on the additional
$10.0 million accrues at 6-month LIBOR plus 3.5%. Under such amendment, the
Company guaranteed Magticom's repayment obligation to Motorola.

The Communications Group and Western Wireless have funded the balance of the
financing to Magticom through a combination of debt and equity. Repayment of
indebtedness owed to such partners is subject to certain conditions set forth in
the Motorola financing agreements.

CASPIAN AMERICAN TELECOMMUNICATIONS.  In August 1998, the Communication Group
acquired a 76% interest in Omni-Metromedia Caspian, Ltd., a company that owns
50% of a Joint Venture in Azerbaijan, Caspian American Telecommunications.
Caspian American has been licensed by the Ministry of Communications of
Azerbaijan to provide high speed wireless local loop services and digital
switching throughout Azerbaijan. Omni-Metromedia has committed to provide up to
$40.5 million in loans to Caspian American for the funding of equipment
acquisition and operational expense subject to concurrence with Caspian
American's business plans. At December 31, 2000, $23.7 million of the commitment
remains available to Caspian American subject to concurrence with the Caspian
American business plan. The Communications Group was obligated to contribute
approximately $5.0 million in equity to Omni-Metromedia and to lend up to $36.5.
However, in light of CAT's poorer than expected performance in 1999 and 2000,
and the limited potential to develop its wireless local loop network without
significant sources of financing, the venture has revised its operating plan to
stabilize its operations and minimize future funding requirements.

                                       51
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)

As part of the original transaction, the Communications Group has sold a 17.1%
participation in the $36.5 million loan commitment to AIG Silk Road Fund, Ltd.,
which requires AIG Silk Road Fund to provide the Communications Group 17.1% of
the funds to be provided under the loan agreement and entitles AIG Silk Road
Fund to 17.1% of the repayments to the Communications Group. The Communications
Group agreed to repurchase such loan participation from AIG Silk Road Fund in
August 2005 on terms and conditions agreed by the parties. In addition, the
Communications Group provided AIG Silk Road Fund the right to put its 15.7%
ownership interest in Omni-Metromedia to the Communications Group starting in
August 2001 for a price equal to seven times the EBITDA of Caspian American
minus debt, as defined, multiplied by AIG Silk Road Fund's percentage ownership
interest.

In May 1999, the Communications Group sold 2.2% of the shares of Omni-Metromedia
to Verbena Servicos e Investimentos, S.A., thereby reducing its ownership
interest in Caspian American from 38% to 37%. In addition, the Communications
Group sold a 2.4% participation in the $36.5 million loan to Verbena Servicos e
Investimentos, which requires Verbena Servicos e Investimentos to provide the
Communications Group 2.4% of the funds to be provided under the loan agreement
and entitles Verbena Servicos e Investimentos to 2.4% of the repayments to the
Communications Group. The Communications Group has agreed to repurchase such
loan participation from Verbena Servicos e Investimentos in August 2005 on terms
and conditions agreed by the parties. In addition, the Communications Group
provided Verbena Servicos e Investimentos the right to put its 2.2% ownership
interest in Omni Metromedia to the Communications Group starting in August 2001
for a price equal to seven times the EBITDA of Caspian American minus debt, as
defined, multiplied by Verbena Servicos e Investimentos percentage ownership
interest.

TYUMENRUSKOM.  As part of its investment in Tyumenruskom announced in
November 1998, the Company agreed to provide a guarantee of payment of
$6.1 million to Ericsson Radio Systems, A.B. for equipment financing provided by
Ericsson to one of the Communication Group's wholly-owned subsidiaries and to
its 46% owned joint venture, Tyumenruskom. Tyumenruskom has purchased a digital
advanced mobile phone or DAMPS system cellular system from Ericsson in order to
provide fixed and mobile cellular telephone in the regions of Tyumen and
Tobolsk, Russian Federation. The Communications Group has made a $1.7 million
equity contribution to Tyumenruskom and has agreed to lend the joint venture up
to $4.0 million for start-up costs and other operating expenses. Tyumenruskom
also intends to provide wireless local loop telephone services.

COMMUNICATIONS GROUP--CHINA

The Company has made inter-company loans to MCC under a credit agreement, and
MCC has used the proceeds of these loans principally to fund its operations and
investments in China. At March 31, 2001, MCC owed $8.1 million under this credit
agreement (including accrued interest).

Huaxia JV had engaged since its formation in development of online trading
software largely aimed at supporting its Chinese partner's trading activities.
Since mid-2000, its scope of business activity has broadened to encompass
development and support of general e-commerce and enterprise management
software, aimed principally at Chinese enterprise clients. Huaxia JV will also
provide the software needed by other of MCC's current and planned
e-commerce-related business units in China. On September 20, 2000, the Chinese
government approved a revised joint venture contract for Huaxia JV whereby AAT's
ownership interest in the joint venture was increased to 98%. On April 10, 2001,
the Chinese government approved Huaxia to become a wholly foreign-owned
enterprise and AAT obtained 100% ownership. Huaxia's business license remains
unchanged as to permitted business activities and capitalization requirements.

                                       52
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
The terms under which Huaxia JV is currently established require a total
investment of $10.0 million, of which $5.0 million must be in the form of
registered capital contributions from the joint venture's shareholders. The
registered capital contributions must be made within three years. As of
March 31, 2001, AAT had contributed $1.6 million of its scheduled registered
capital investment.

Twin Poplars LLC, a U.S. limited liability company registered in Delaware, owns
a 97% registered capital interest in Beijing 66cities.com Company, Limited, a
Chinese-foreign equity joint venture licensed to engage in information content
provision and e-commerce-related services in China. Twin Poplars operates as a
holding company for 66cities JV and has no operations or assets other than its
interests in this venture. As of March 31, 2001, the MCC had advanced
$1.6 million to Twin Poplars, all of which was invested in or advanced to
66cities JV.

By virtue of its ownership interest in Twin Poplars, as of March 31, 2001 MCC
owns an indirect 87% interest in the 66cities JV. The approved total investment
level for 66cities JV is $2.5 million of which $1.8 million shall be in the form
of registered capital. As of March 31, 2001, Twin Poplars had invested
$1.3 million registered capital in and advanced $302,000 to 66cities JV.

66cities JV provides information content related services pertinent to
publication of travel and entertainment guides in print and electronic formats.
66cities JV currently supports publication by Chinese interests of the weekly
English-language magazine "City Weekend", distributed in Beijing and Shanghai,
and of various Chinese and English language guides in book format. It also
manages the 66cities.com website, which offers comparable information via the
Internet, hosts links to various Chinese travel and entertainment related
services and offers various travel/entertainment products for sale.

On March 20, 2001, the Company completed registration and establishment of
Clarity. The approved total investment level for Clarity is $5.0 million of
which $2.5 million must be in the form of registered capital. The Company
invested the initial $375,000 of Clarity's registered capital on April 4, 2001.

Clarity's approved scope of business is to provide database management and
related application services and software. It focuses on direct marketers and
retailers selling to China's consumer markets, offering Customer Relationship
Management applications and services. As of March 31, 2001 Clarity had conducted
no material business operations. The Communications Group is actively pursuing
other investment opportunities in China's information industry services sector.

SNAPPER

Snapper's liquidity is generated from operations and borrowings. On
November 11, 1998, Snapper entered into a loan and security agreement with the
Lenders named therein and Fleet Capital Corporation, as agent and as the initial
lender, pursuant to which the lenders agreed to provide Snapper with a
$5.0 million term loan facility and a $55.0 million revolving credit facility,
the proceeds of which were used to refinance Snapper's then outstanding
obligations under its prior revolving credit agreement and will also be used for
working capital purposes. The Snapper loan will mature in November 2003 (subject
to automatic one-year renewals), and is guaranteed by the Company up to
$10.0 million (increasing to $15.0 million on the occurrence of specified
events).

On January 11, 2001, the Snapper Loan Agreement was amended and the revolving
credit facility was increased to $70.0 million. The revolving credit facility
decreased to $66.0 million on March 1, 2001 and $60.0 million on April 1, 2001
and will decrease to $55.0 million on July 1, 2001. As of March 31, 2001, the
Company was in compliance with all bank covenants under the amended Loan and
Security Agreement.

                                       53
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
Interest under the initial and amended Snapper Loan Agreement (the Revolver) is
payable at the Company's option at a rate equal to either (i) the prime rate
plus .25% (from November 11, 1998 through March 31, 2000) or at the prime rate,
the prime rate plus .25 or .5% (from April 1, 2000 through January 10, 2001),
the prime rate plus 1.00% (from January 11, 2001 through June 30, 2001), and at
the prime rate, the prime rate plus .25% or .5% (from July 1, 2001 to the
Snapper Loan Agreement termination date) depending on meeting certain leverage
ratios or (ii) LIBOR (as defined in the Snapper Loan Agreement) plus 3.0% (from
November 11, 1998 through March 31, 2000), LIBOR plus 2.50%, 2.75%, 3.00% or
3.25% (from April 1, 2000 through January 10, 2001), LIBOR plus 3.75% (from
January 11, 2001 through June 30, 2001) and LIBOR plus 2.50%, 2.75%, 3.00% or
3.25% (from July 1, 2001 to the Snapper Loan Agreement termination date)
depending on meeting certain leverage ratios.

Snapper signed a new $2.5 million term loan on June 1, 2000 with Fleet Capital
Corporation to fund additional approved capital expenditures over and above the
capital expenditures Snapper is allowed under its Loan and Security Agreement.
Approved funding was available through March 31, 2001, and is payable in 20
consecutive quarterly installments beginning October 1, 2000. Snapper received
$1.9 million of funding under this loan as of March 31, 2001.

Interest under the initial and amended Snapper Loan Agreement (the original Term
Loan and the capital expenditure term loan) is payable at the Company's option
at a rate equal to either (i) the prime rate plus .25% (from November 11, 1998
through March 31, 2000) or at the prime rate, the prime rate plus .25% or .5%
from April 1, 2000 to the Snapper Loan Agreement termination date) depending on
meeting certain leverage ratios or (ii) LIBOR (as defined in the Snapper Loan
Agreement) plus 3.00% (from November 11, 1998 through March 31, 2000) or LIBOR
plus 2.50%, 2.75%, 3.00% or 3.25% (from April 1, 2000 to the Snapper Loan
Agreement termination date) depending on meeting certain leverage ratios.

The agreements governing the initial and amended Snapper Loan Agreement contain
standard representations and warranties, covenants, conditions precedent and
events of default, and provide for the grant of a security interest in
substantially all of Snapper's assets other than real property. At March 31,
2001 and 2000, Snapper's outstanding liability for its term loans and line of
credit was $56.8 million and $45.0 million, respectively.

Snapper has entered into various long-term manufacturing and purchase agreements
with certain vendors for the purchase of manufactured products and raw
materials. As of March 31, 2001, noncancelable commitments under these
agreements amounted to approximately $8.5 million.

Snapper has an agreement with a financial institution which makes available
floor plan financing to dealers of Snapper products. This agreement, which
terminates on December 31, 2001 unless extended by the parties, provides
financing for inventories and accelerates Snapper's cash flow. Under the terms
of the agreement, a default in payment by a dealer is nonrecourse to Snapper.
However, the third-party financial institution can require Snapper to repurchase
new and unused equipment, if the dealer defaults and the inventory is not able
to be sold to another dealer. At March 31, 2001, there was approximately
$78.3 million outstanding under this floor plan financing arrangement. The
Company has guaranteed Snapper's payment obligations under this agreement. See
"Liquidity and Capital Resources--the Company."

The Company believes that Snapper's available cash on hand, cash flow generated
by operating activities, borrowings from the Snapper loan agreement and, on an
as needed basis, short-term working capital funding from the Company, will
provide sufficient funds for Snapper to meet its obligations and capital
requirements.

                                       54
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
RISKS ASSOCIATED WITH THE COMPANY

The ability of the Communications Group and its joint ventures and subsidiaries
to establish and maintain profitable operations is subject to, among other
things, significant political, economic and social risks inherent in doing
business in emerging markets such as Eastern Europe, the republics of the former
Soviet Union and China. These include, among other things, matters arising out
of competition, relationships with local partners, corporate governance of the
operating ventures, government policies, economic conditions, imposition of or
changes in government regulations or policies (including licensing requirements
and laws restricting foreign ownership), imposition of or changes to taxes or
other similar charges by government bodies, exchange rate fluctuations and
controls, civil disturbances, deprivation or unenforceability of contractual
rights, and taking of property without fair compensation. These and other risks
associated with the Company are discussed more fully in the Company's Annual
Report on Form 10-K/A Amendment No. 1 "Item 1--Risks Associated with the
Company."

The Communications Group's strategy is to minimize its foreign currency risk. To
the extent possible, in countries that have experienced high rates of inflation,
the Communications Group bills and collects revenues in U.S. dollars or an
equivalent local currency amount adjusted on a monthly basis for exchange rate
fluctuations. The Communications Group's joint ventures are generally permitted
to maintain U. S. dollar accounts to serve their U.S. dollar obligations,
thereby reducing foreign currency risk. As the Communications Group and its
joint ventures expand their operations and become more dependent on local
currency based transactions, the Communications Group expects that its foreign
currency exposure will increase. The Communications Group does not hedge against
foreign exchange rate risks at the current time and, therefore, could be subject
in the future to any declines in exchange rates between the time a joint venture
receives its funds in local currencies and the time it distributes such funds in
U.S. dollars to the Communications Group.

All of the Company's China-based business units operate pursuant to business
licenses issued by the Chinese government. A condition of each business license
is that the business unit shall comply with all Chinese regulations, both as
presently formed and as may be issued in the future. Such regulations may
prohibit certain business activities and may limit foreign investment in Chinese
enterprises engaged in certain business activities. The Company believes that
the current and intended business activities of all of its China-based business
units comply with currently published regulations, and that the current extent
of the Company's foreign ownership in these units is similarly permitted. Future
changes to or domestic interpretations of the regulations could, however, limit
business activity or the Company's ownership interests or both.

Chinese regulation of business activities involving use of the Internet and
provision of information content or services via the Internet or similar
networks are under active development. Regulations addressing the extent of
direct foreign investment permitted in Chinese business units engaged in these
activities could, if promulgated in the most severe form, require the Company to
limit its equity participation in current ventures or limit the scale of such
participation in future ventures. Regulations governing the permitted scope and
nature of commercial transactions via electronic networks and systems
(e-commerce) could limit the extent or profitability of the Company's current or
anticipated ventures.

Regulations limiting dissemination of information for political, social or
security reasons could impose added operating expense burdens on the Company's
current or anticipated ventures.

This uncertainty regarding future Chinese regulations is applicable to all of
the Company's current and planned activities in China. The Company believes that
its current China ventures are in compliance

                                       55
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
with all currently published Chinese regulations and further believes that
future regulatory developments in China will not unduly limit these ventures or
other planned business activities. However, there can be no assurance at this
time that all such activities will be permitted or be economically feasible
under future Chinese regulatory regimes and, therefore, the Company's
investments in China or future profitability of these investments could be
jeopardized.

The Company's Huaxia JV was established to develop and sell software and provide
technical services relating to operation of electronic commerce computer
information systems for China-based corporate clients. Computer and software
products and services, such as those offered by Huaxia JV, are subject to
regulatory regimes different from those applied to telecommunications, Internet
and information service operations in China. The Company expects that a
significant portion of Huaxia JV's planned future revenues will, however, derive
from other businesses in China (including other of the Company's own ventures)
that may be subject to Internet, e-commerce or information service regulatory
regimes and, therefore, the potential scale of such revenues could be limited by
future regulatory developments in those areas. The Company believes that its
equity interest in Huaxia JV is not under current Chinese regulation as foreign
equity investment in telecommunications operations or any other line of business
restricted from foreign investment and the Company does not anticipate that the
extent of its equity investment in Huaxia JV will be challenged by future
Chinese regulation.

The Company's investment in 66cities JV entails certain risks resulting both
from regulatory uncertainty and the generally sensitive nature of any publishing
related activities within China. 66cities JV provides support services to
Chinese publishers and offers information content via the Internet on the
website it supports. With respect to current regulatory prohibitions against
foreign investment in publishing businesses in China, the Company believes that
66cities JV would not be deemed to be operating as a publishing business, since
it is providing content and services to licensed Chinese publisher clients under
contract for fixed fees. In addition, during the start-up phase, 66cities is
also providing administrative services of billings and collections on behalf of
the Chinese publisher, for which it is being reimbursed. The current contract
expires on June 30, 2001 and the Company is negotiating an extension. However,
regulatory action that alters, revokes or limits the clients' publishing rights
or the clients' contracts with 66cities JV could significantly impact 66cities
JV's current principal revenue stream. Since 66cities JV does not itself
actually publish the content it develops, the Chinese publishing clients'
revocation of existing service contracts with 66cities JV could have significant
adverse financial impact on the joint venture. With respect to Internet-related
operations, 66cities JV could be required in the future to adjust its web
hosting and Internet content provision support arrangements to comply with new
regulatory developments and such adjustment could adversely affect 66cities JV's
overall costs of operation.

The newly establsihed Clarity unit will engage in a form of application service
provision, in addition to direct sale of application software products. Remote
provision of applications services via the Internet or other network is a new
business activity in China and clear regulatory provisions have not yet been
finalized. The Company believes that Clarity's business license makes specific
provision for the services the unit will offer and that Clarity's intended
operations are in compliance with current regulatory provisions. Future
regulatory developments, however, are unpredictable as to nature and timing.
Although the Company expects China's future regulatory regime to permit and
support business activities of the kind Clarity intends, there can be no
assurance at this time that all such activities will be permitted or be
economically feasible under these future regimes.

                                       56
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
OF OPERATIONS (CONTINUED)

MMG CONSOLIDATED

THREE MONTHS ENDED MARCH 31, 2001 COMPARED TO THREE MONTHS ENDED MARCH 31, 2000

CASH FLOWS FROM OPERATING ACTIVITIES

Cash used in operations for the three months ended March 31, 2001 was
$15.5 million, an increase in cash used in operations of $4.5 million from the
same period in the prior year.

Losses from operations include significant non-cash items such as depreciation,
amortization, equity in losses of unconsolidated investees, gain on settlement
of an option, and losses allocable to minority interests. Non-cash items
increased $10.1 million from $17.1 million to $27.2 million for the three months
ended March 31, 2000 and 2001, respectively. The increase related principally to
the increase in depreciation and amortization expenses. Changes in operating
assets and liabilities decreased cash flows for the three months ended
March 31, 2001 by $18.8 million and decreased cash flows by $11.6 million for
the three months ended March 31, 2000.

The increase in cash flows used in operating activities for the three months
ended March 31, 2000 reflects an increase in accounts receivable and inventory
principally attributable to the operations of Snapper.

CASH FLOWS FROM INVESTING ACTIVITIES

Cash used in investing activities was $7.6 million for the three months ended
March 31, 2001 as compared to cash provided by investing activities for the
three months ended March 31, 2000 of $25.0 million. The principal components of
investing activities are investments in and advances to joint ventures of
$348,000 in 2001 and distributions received from joint ventures of $946,000 and
$21.2 million in 2001 and 2000, respectively. The Communications Group utilized
$2.1 million and $2.4 million of funds for acquisitions during the three months
ended March 31, 2001 and 2000, respectively, and in 2000, received
$11.0 million in connection with the settlement of an option agreement of a
cancelled private placement.

CASH FLOWS FROM FINANCING ACTIVITIES

Cash used in financing activities was $8.8 million for the three months ended
March 31, 2001, an increase of $7.1 million from the same period in the prior
year. For the three months ended March 31, 2001 the Company used $3.8 million to
pay its preferred stock dividend and $2.8 million for debt repayments. In 2001,
additions to debt were $15.3 million. For the three months ended March 31, 2000
the Company used $3.8 million to pay its preferred stock dividend, and there
were $4.7 million of debt payments and $5.6 million of additions to long-term
debt borrowed under the Snapper loan.

NEW ACCOUNTING PRONOUNCEMENTS

ACCOUNTING FOR DERIVATIVES

In June 1998, Statement of Financial Accounting Standards ("SFAS") No. 133,
"Accounting for Derivative Instruments and Hedging Activities", was issued.
SFAS 133 established accounting and reporting standards for derivative
instruments and for hedging activities. SFAS 133 requires that an entity
recognize all derivatives as either assets or liabilities and measure those
instruments at fair value. The accounting for the gain or loss due to changes in
fair value of the derivative instrument depends on whether the derivative
instrument qualifies as a hedge. In June 2000, SFAS 138 was issued which

                                       57
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
OF OPERATIONS (CONTINUED)
addresses a limited number of issues causing implementation difficulties for
numerous entities that have applied SFAS 133. SFAS 133 and SFAS 138 are
effective for all fiscal quarters of fiscal years beginning after June 15, 2000.
SFAS 133 can not be applied retroactively to financial statements of prior
periods. The adoption of SFAS No. 133 and 138 on January 1, 2001 did not have a
material impact on the financial position or results of operations of the
Company.

REVENUE RECOGNITION

In December 1999, the staff of the SEC issued Staff Accounting Bulletin ("SAB")
No. 101, "Revenue Recognition in Financial Statements," which provides guidance
in applying generally accepted accounting principles to selected revenue
recognition issues. In March 2000 and June 2000, the staff of the SEC amended
SAB No. 101 to delay the required implementation date of SAB No. 101 to the
fourth quarter of fiscal years beginning after December 15, 1999. The Company
has adopted SAB No. 101 as amended. The adoption of SAB No. 101, as amended, has
not and is not expected to have a material impact on the Company's results of
operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In the normal course of business, the financial position of the Company is
routinely subjected to a variety of risks. In addition to the market risk
associated with interest rate movements on outstanding debt and currency rate
movements on non-U.S. dollar denominated assets and liabilities, other examples
of risk include collectibility of accounts receivable and significant political,
economic and social risks inherent in doing business in emerging markets such as
Eastern Europe, republics of the former Soviet Union and China.

With the exception of Snapper and prior to the acquisition of PLD Telekom, the
Company did not have any significant long term obligations. Since Snapper's bank
debt is a floating rate instrument, its carrying value approximates its fair
value. A 100 basis point increase in the level of interest rates with all other
variables held constant would result in an increase in interest expense of
$13,000. In addition, a 100 basis point increase in interest rates on Snapper's
floor plan financing for dealers would have resulted in an increase in interest
expense of $14,000.

With the exception of certain vendor financing at the operating business level
(approximately $4.1 million in the aggregate), the Company's debt obligations
and those of its operating businesses are fixed rate obligations, and are
therefore not exposed to market risk from changes in interest rates. The Company
does not believe that it is exposed to a material market risk from changes in
interest rates. Furthermore, with the exception of the approximately
$3.6 million in vendor financing which is denominated in Euros, Deutsche Marks
and Dutch Guilders, the Company's long-term debt and that of its operating
businesses are denominated in U.S. dollars. The Company does not believe that
the Communications Group's debt not denominated in U.S. dollars exposes the
Company to a material market risk from changes in foreign exchange rates.

The Company does not hedge against foreign exchange rate risks at the current
time. In the majority of the countries that the Communications Group's joint
ventures operate, there currently do not exist derivative instruments to allow
the Communications Group to hedge foreign currency risk. In addition, at the
current time the majority of the Communications Group's joint ventures are in
the early stages of development and the Company does not expect in the near term
to repatriate significant funds from the Communications Group's joint ventures.
"Item 2--Management's Discussion and Analysis of Financial Conditions and
Results of Operations--Inflation and Foreign Currency" contains additional
information on risks associated with the Company's investments in Eastern
Europe, the republics of the former Soviet Union and China.

                                       58
<PAGE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Form 10-Q including, without limitation, statements
under "Legal Proceedings" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" constitute "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. Certain, but not
necessarily all, of such forward-looking statements can be identified by the use
of forward-looking terminology, such as "believes," "expects," "may," "will,"
"should" or "anticipates" or the negative thereof or other variations thereon or
comparable terminology, or by discussions of strategy that involves risks and
uncertainties. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results, performance
or achievements of the Company, or industry results, to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among others, the
following: general economic and business conditions, which will, among other
things, affect demand for the Company's products and services; industry
capacity, which tends to increase during strong years of the business cycle;
changes in public taste and industry trends; demographic changes; competition
from other communications companies, which may affect the Company's ability to
enter into or acquire new joint ventures or to generate revenues; political,
social and economic conditions and changes in laws, rules and regulations or
their administration or interpretation, particularly in Eastern Europe and the
republics of the former Soviet Union, China and selected other emerging markets,
which may affect the Company's results of operations or limit or reduce the
level of the Company's ownership interests in its joint ventures; timely
completion of construction projects for new systems for the joint ventures in
which the Company has invested, which may impact the costs of such projects;
developing legal structures in Eastern Europe and the republics of the former
Soviet Union, China and other selected emerging markets, which may affect the
Company's results of operations; cooperation of local partners for the Company's
communications investments in Eastern Europe and the republics of the former
Soviet Union, China and other selected emerging markets, which may affect the
Company's results of operations; exchange rate fluctuations; license renewals
for the Company's communications investments in Eastern Europe and the republics
of the former Soviet Union, China and other selected emerging markets; the loss
of any significant customers; changes in business strategy or development plans;
quality of management; availability of qualified personnel; changes in or the
failure to comply with government regulations; ability of the Company to
consummate the spin-off or sale of its businesses; obtaining the requisite
consents for any spin-off or sale of the Company's businesses; the timing and
structure of any spin-off or sale of the Company's businesses; the consideration
or values obtained by the Company for any businesses that are spun off or sold;
and other factors referenced herein. Any forward-looking statement speaks only
as of the date on which it is made. New factors emerge from time to time and it
is not possible for the Company to predict which will arise. In addition, the
Company cannot assess the impact of each factor on its business or the extent to
which any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statement.

                                       59
<PAGE>
                           PART II--OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Updated information on litigation and environmental matters subsequent to
December 31, 2000 is as follows:

FUQUA INDUSTRIES, INC. SHAREHOLDER LITIGATION

IN RE FUQUA INDUSTRIES, INC. SHAREHOLDER LITIGATION, Del. Ch., Consolidated C.A.
No. 11974, plaintiff Virginia Abrams filed a purported class and derivative
action in the Delaware Court of Chancery on February 22, 1991 against Fuqua
Industries, Inc. (predecessor company to The Actava Group), Intermark, Inc., the
then-current directors of Fuqua Industries and certain past members of the board
of directors. The action challenged certain transactions which were alleged to
be part of a plan to change control of the board of Fuqua Industries from J.B.
Fuqua to Intermark and sought a judgment against defendants in the amount of
$15.7 million, other unspecified money damages, an accounting, declaratory
relief and an injunction prohibiting any business combination between Fuqua
Industries and Intermark in the absence of approval by a majority of Fuqua
Industries' disinterested shareholders. Subsequently, two similar actions,
styled BEHRENS V. FUQUA INDUSTRIES, INC. ET AL., Del. Ch., C.A. No. 11988 and
FREBERG V. FUQUA INDUSTRIES, INC. ET AL., Del. Ch., C.A. No. 11989 were filed
with the Court. On May 1, 1991, the Court ordered all of the foregoing actions
consolidated. On October 7, 1991, all defendants moved to dismiss the complaint.
Plaintiffs thereafter took three depositions during the next three years.

On December 28, 1995, plaintiffs filed a consolidated second amended derivative
and class action complaint, purporting to assert additional facts in support of
their claim regarding an alleged plan, but deleting their prior request for
injunctive relief. On January 31, 1996, all defendants moved to dismiss the
second amended complaint. After the motion was briefed, oral argument was held
on November 6, 1996. On May 13, 1997, the Court issued a decision on defendants'
motion to dismiss, the Court dismissed all of plaintiffs' class claims and
dismissed all of plaintiffs' derivative claims except for the claims that Fuqua
Industries board members (i) entered into an agreement pursuant to which Triton
Group, Inc. (which was subsequently merged into Intermark,) was exempted from 8
Del. C. 203 and (ii) undertook a program pursuant to which 4.9 million shares of
Fuqua Industries common stock were repurchased, allegedly both in furtherance of
an entrenchment plan. On January 16, 1998, the Court entered an order
implementing the May 13, 1997 decision. The order also dismissed one of the
defendants from the case with prejudice and dismissed three other defendants
without waiver of any rights plaintiffs might have to reassert the claims if the
opinion were to be vacated or reversed on appeal.

On February 5, 1998, plaintiffs filed a consolidated third amended derivative
complaint and named as defendants Messrs. J.B. Fuqua, Klamon, Sanders, Scott,
Warner and Zellars. The complaint alleged that defendants (i) entered into an
agreement pursuant to which Triton was exempted from 8 Del. C. 203 and
(ii) undertook a program pursuant to which 4.9 million shares of Fuqua
Industries common stock were repurchased, both allegedly in furtherance of an
entrenchment plan. For their relief, plaintiffs seek damages and an accounting
of profits improperly obtained by defendants.

In March 1998, defendants J. B. Fuqua, Klamon, Sanders, Zellars, Scott and
Warner filed their answers denying each of the substantive allegations of
wrongdoing contained in the third amended complaint. The Company also filed its
answer, submitting itself to the jurisdiction of the Court for a proper
resolution of the claims purported to be set forth by the plaintiffs. Discovery
is ongoing.

                                       60
<PAGE>
ITEM 1. LEGAL PROCEEDINGS (CONTINUED)
LEGAL PROCEEDINGS IN CONNECTION WITH RDM

On August 29, 1997, RDM Sports Group, Inc. and certain of its affiliates filed
voluntary petitions for relief under chapter 11 of the Bankruptcy Code. At the
time of the filings, the Company owned 39% of the outstanding common stock of
RDM Sports Group, Inc. In addition, during the chapter 11 case the Company
honored a $15.0 million guaranty obligation to RDM's prepetition senior secured
lender, and, as a result, the Company has asserted a subrogation claim in that
amount (together with interest and other amounts owing in respect thereof) in
the RDM chapter 11 case. On February 19, 1998, the Bankruptcy Court ordered the
appointment of a chapter 11 trustee. On July 18, 2000, the Bankruptcy Court
confirmed the Second Amended and Restated Joint Chapter 11 Plan of Liquidation
for RDM Sports Group, Inc. and Related Debtor Entities (the "Plan"). Under the
Plan the Company's 39% equity interest will likely be cancelled by operation of
the Plan. The treatment of the aforementioned subrogation claim under the Plan
remains subject to the bankruptcy-related proceedings described below.

On August 19, 1998, a purported class action lawsuit, THEOHAROUS V. FONG, ET
AL., Civ. No. 1:98CV2366, was filed in United States District Court for the
Northern District of Georgia. On October 19, 1998, a second purported class
action lawsuit with substantially the same allegations, SCHUETTE V. FONG, ET
AL., Civ. No. 1:98CV3034, was filed in United States District Court for the
Northern District of Georgia. On June 7, 1999, plaintiffs in each of these
lawsuits filed amended complaints. The amended complaints alleged that certain
officers, directors and shareholders of RDM, including the Company and current
and former officers of the Company who served as directors of RDM, were liable
under federal securities laws for misrepresenting and failing to disclose
information regarding RDM's alleged financial condition during the period
between November 7, 1995 and August 22, 1997, the date on which RDM disclosed
that its management had discussed the possibility of filing for bankruptcy. The
amended complaints also alleged that the defendants, including the Company and
current and former officers of the Company who served as directors of RDM, were
secondarily liable as controlling persons of RDM. In an opinion dated March 10,
2000, the court dismissed these actions in their entirety. On April 7, 2000,
plaintiffs in each of these actions filed notices of appeal to the United States
Court of Appeals for the Eleventh Circuit. The Eleventh Circuit heard oral
arguments on March 20, 2001. The appeal to the Eleventh Circuit is pending.

On December 30, 1998, the chapter 11 trustee of RDM brought an adversary
proceeding in the bankruptcy of RDM, HAYS, ET AL. V. FONG, ET AL., Adv. Proc.
No. 98-1128, in the United States Bankruptcy Court, Northern District of
Georgia, alleging that current and former officers of the Company, while serving
as directors on the board of RDM, breached fiduciary duties allegedly owed to
RDM's shareholders and creditors in connection with the bankruptcy of RDM. On
January 25, 1999, the plaintiff filed a first amended complaint. The official
committee of unsecured creditors of RDM moved to proceed as co-plaintiff or to
intervene in this proceeding, and the official committee of bondholders of RDM
moved to intervene in or join the proceeding. On February 26, 1999, the court
entered an order staying all activity in this proceeding pending the court's
ruling on these motions. Plaintiffs in this adversary proceeding seek the
following relief against current and former officers of the Company who served
as directors of RDM: actual damages in an amount to be proven at trial,
reasonable attorney's fees and expenses, and such other and further relief as
the court deems just and proper.

On February 16, 1999, the creditors' committee brought an adversary proceeding,
THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS OF RDM SPORTS GROUP, INC. AND
RELATED DEBTORS V. METROMEDIA INTERNATIONAL GROUP INC., Adv. Proc. No. 99-1023,
seeking in the alternative to recharacterize as contributions to equity a
secured claim in the amount of $15.0 million made by the Company arising

                                       61
<PAGE>
ITEM 1. LEGAL PROCEEDINGS (CONTINUED)
out of the Company's financing of RDM, or to equitably subordinate such claim
made by the Company against RDM and other debtors in the bankruptcy proceeding.
On March 3, 1999, the bondholders' committee brought an adversary proceeding,
THE OFFICIAL COMMITTEE OF BONDHOLDERS OF RDM SPORTS GROUP, INC. V. METROMEDIA
INTERNATIONAL GROUP, INC., Adv. Proc. No. 99-1029, with substantially the same
allegations as the above proceeding. In addition to the equitable and injunctive
relief sought by plaintiffs described above, plaintiffs in these adversary
proceedings seek actual damages in the amount of $52.0 million, and such other
and further relief as the court deems just and proper.

On July 17, 2000, the bankruptcy court approved the Second Amended and Restated
Joint Chapter 11 Plan of Liquidation for RDM (the "Plan"). Upon the Plan's
effective date, the creditors' committee and the bondholders' committee
dissolved and the right to continue the adversary proceedings described above
fell to the Plan's "liquidating agent," the former chapter 11 trustee. The Plan
also provided that, if the liquidating agent chose to pursue the adversary
proceedings, he should consolidate them.

On August 18, 2000, the liquidating agent filed first amended complaints in both
the former creditors' committee adversary proceeding and the former bondholders'
committee adversary proceeding. In October 2000, the bankruptcy court approved a
consent order, signed by the parties, staying all activity in these proceedings
pending the bankruptcy court's ruling on an anticipated motion by the
liquidating agent to consolidate the adversary proceedings. On January 31, 2001,
the liquidating agent made motions (a) to lift the stay in the HAYS V. FONG
adversary proceeding, (b) to consolidate the HAYS V. FONG adversary proceeding
with the former creditors' committee adversary proceeding, the former
bondholders' committee adversary proceeding and another adversary
proceeding--HAYS, ET AL. V. EQUITEX, ET AL., Adv. Proc. No. 00-1065--which does
not involve the Company or any of its current or former officers or directors,
and (c) for leave to file an amended consolidated complaint. On March 14, 2001,
the liquidating agent's motion to consolidate the various proceedings was
denied. On March 22, 2001, the liquidating agent filed a lien avoidance action
against the Company, HAYES, ET AL. V. METROMEDIA INTERNATIONAL GROUP, INC., ET
AL., Adv. Proc. No. 01-1026. On May 7, 2001, the Company filed a motion to
dismiss the former creditors' committee adversary proceedings and the former
bondholders' committee adversary proceeding. Also on May 7, 2001, the Company
filed a motion seeking to have such adversary proceeding withdrawn from the
United States Bankruptcy Court, Northern District of Georgia to the United
States District Court, Northern District of Georgia.

The Company believes that it has meritorious defenses and plans to defend
vigorously these actions. Due to the status of these proceedings, the Company
cannot evaluate the likelihood of an unfavorable outcome or estimate the likely
amount or range of possible loss, if any. Accordingly, the Company has not
recorded any liability in connection with these adversary proceedings.

BENNETT V. METROMEDIA INTERNATIONAL GROUP, INC.

BENNETT V. METROMEDIA INTERNATIONAL GROUP, INC.  (C.A. No. 18530-NC, Court of
Chancery of Delaware, New Castle County). By complaint dated November 29, 2000,
a shareholder of the Company, Richard A. Bennett, commenced an action seeking to
inspect corporate books and records of the Company pursuant to Section 220 of
the Delaware General Corporation Law. The Company has negotiated the scope of
such disclosure with Mr. Bennett and has provided such documentation.

BARBERIS V. KLUGE, ET AL.

BARBERIS V. KLUGE, ET AL.  (C.A. No. 18676-NC, Court of Chancery of Delaware,
New Castle County); CRANDON CAPITAL PARTNERS V. KLUGE, ET AL. (C.A.
No. 18681-NC, Court of Chancery of Delaware, New Castle County); KATZ V. KLUGE,
ET AL. (C.A. No. 18691-NC, Court of Chancery of Delaware, New Castle

                                       62
<PAGE>
ITEM 1. LEGAL PROCEEDINGS (CONTINUED)
County); KOTZEN V. KLUGE, ET AL. (C.A. No. 18701-NC, Court of Chancery of
Delaware, New Castle County). On February 16, 2001, Hercules Barberis, a
shareholder of the Company, commenced a derivative action against certain
current and former officers and directors of the Company, seeking to compel the
Company to dispose of its interest in Snapper, Inc., to enjoin the defendants
from pursuing any going-private transactions, and an accounting. On
February 22, 2001, February 23, 2001 and February 28, 2001, respectively,
shareholders Crandon Capital Partners, Moise and Esther Katz, and Ronda Kotzen
each commenced derivative actions with substantially the same allegations and
seeking substantially the same relief. The Company has not yet filed an answer
in these actions pending their consolidation.

INDEMNIFICATION AGREEMENTS

In accordance with Section 145 of the General Corporation Law of the State of
Delaware, pursuant to the Company's Restated Certificate of Incorporation, the
Company has agreed to indemnify its officers and directors against, among other
things, any and all judgments, fines, penalties, amounts paid in settlements and
expenses paid or incurred by virtue of the fact that such officer or director
was acting in such capacity to the extent not prohibited by law.

ITEM 6. EXHIBITS AND REPORTS OF FORM 8-K

<TABLE>
<CAPTION>
       EXHIBIT
       NUMBER                             DESCRIPTION
---------------------   ------------------------------------------------
<S>                     <C>                                               <C>
 (a)                    Exhibits
 11         *           Computation of Earnings Per Share

 (b)                    Reports on Form 8-K
                        None
</TABLE>

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

*   Filed herewith

                                       63
<PAGE>
                                   SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

<TABLE>
<S>                                                    <C>  <C>
                                                       METROMEDIA INTERNATIONAL GROUP, INC.

                                                       By:              /s/ SILVIA KESSEL
                                                            -----------------------------------------
                                                                          Silvia Kessel
                                                                     EXECUTIVE VICE PRESIDENT
                                                                     CHIEF FINANCIAL OFFICER
                                                                          AND TREASURER

Dated: May 15, 2001
</TABLE>

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