<PAGE>   1




                                 UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D. C.  20549

                                  FORM 10-K/A
                               (Amendment No. 1)

[ X ]    ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 [Fee Required]
         For the fiscal year ended December 31, 1996

                                       OR

[   ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 [No Fee Required]
         For the transition period from ____ to ____

Commission File Number 0-20421



                          TELE-COMMUNICATIONS, INC.
             ------------------------------------------------------
             (Exact name of Registrant as specified in its charter)


        State of Delaware                               84-1260157  
-------------------------------            -------------------------------------
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
incorporation or organization)

         5619 DTC Parkway
         Englewood, Colorado                                    80111    
--------------------------------------                 ------------------------
(Address of principal executive offices)                      (Zip Code)

         Registrant's telephone number, including area code:  (303) 267-5500

         Securities registered pursuant to Section 12(b) of the Act:  None

         Securities registered pursuant to Section 12(g) of the Act:
                 Tele-Communications, Inc. Series A TCI Group common stock,
                    par value $1.00 per share
                 Tele-Communications, Inc. Series B TCI Group common stock,
                    par value $1.00 per share
                 Tele-Communications, Inc. Series A Liberty Media Group
                    common stock, par value $1.00 per share
                 Tele-Communications, Inc. Series B Liberty Media Group
                    common stock, par value $1.00 per share
                 Class B 6% Cumulative Redeemable Exchangeable Junior
                    Preferred Stock, par value $.01 per share

         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 and (2) has been subject to such filing
requirements for the past 90 days.     Yes  X     No
                                          ----       ----

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
                            -----

         The aggregate market value of the voting stock held by nonaffiliates
of Tele-Communications, Inc., computed by reference to the last sales price of
such stock, as of the close of trading on January 31, 1997, was
$12,415,086,846.

         The number of shares outstanding of Tele-Communications, Inc.'s common
stock (net of shares held by subsidiaries), as of January 31, 1997, was:

 Tele-Communications, Inc. Series A TCI Group common stock - 597,497,573 shares,
  Tele-Communications, Inc. Series B TCI Group common stock - 84,647,065 shares,
      Tele-Communications, Inc. Series A Liberty Media Group common stock - 
            228,558,926 shares, and
      Tele-Communications, Inc. Series B Liberty Media Group common stock - 
            21,187,969 shares.
<PAGE>   2
                                   SIGNATURES

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


                                  Dated:  April 30, 1997
                                  TELE-COMMUNICATIONS, INC.
                                  (Registrant)


                                  By  /s/ Stephen M. Brett     
                                    --------------------------------
                                      Stephen M. Brett
                                      Executive Vice President and Secretary

<PAGE>   3





                                   PART III.

Item 10.         Directors and Executive Officers of the Registrant.

         The following lists the directors and executive officers of
Tele-Communications, Inc. ("TCI" or the "Company"), their birth dates, a
description of their business experience and positions held with the Company as
of April 15, 1997.  Directors of TCI are elected to staggered three-year terms
with one-third elected annually.  The date the present term of office expires
for each director is the date of the Annual Meeting of the Company's
stockholders held during the year footnoted opposite their names.  All officers
are appointed for an indefinite term, serving at the pleasure of the Board of
Directors.

<TABLE>
<CAPTION>
            Name                                                  Positions                            
----------------------------         ------------------------------------------------------------------
<S>                                  <C>
John C. Malone (3)                   TCI director since June of 1994; Chairman of the Board of TCI from
Born March 7, 1941                   November 1996; Chief Executive Officer of TCI from January of 1994;
                                     President of TCI from January of 1994 through March of 1997; Chief
                                     Executive Officer of TCI Communications, Inc. ("TCIC") from March of
                                     1992 to October of 1994 and President of TCIC from 1973 to October of
                                     1994; Chairman of the Board and director of Tele-Communications
                                     International, Inc. ("International") since May 1995; director of TCI
                                     Pacific Communications, Inc. ("TPAC") since July 1996; is President and
                                     a director of many of the Company's subsidiaries; director of BET
                                     Holdings, Inc., The Bank of New York and TCI Satellite Entertainment,
                                     Inc. ("Satellite"); TCIC director since 1973.

Donne  F. Fisher (1)                 Executive Vice President of TCI from January of 1994 through January 1,
Born May 24, 1938                    1996; on January 1, 1996, Mr. Fisher resigned his position as Executive
                                     Vice President of TCI; Mr. Fisher has provided consulting services to
                                     TCI since January, 1996; Executive Vice President of TCIC from December
                                     of 1991 to October of 1994; was previously Senior Vice President of
                                     TCIC since 1982 and Treasurer since 1970; TCI director since June of
                                     1994; TCIC director since 1980; also a director of TPAC, General
                                     Communication, Inc., DMX Inc. and United Video Satellite Group, Inc.

John W. Gallivan (2)                 Chairman of the Board of Kearns-Tribune Corporation ("Kearns"), a
Born June 28, 1915                   newspaper publishing concern; also a director of Silver King Mining
                                     Company; TCI director since June of 1994; TCIC director from 1980 to
                                     August of 1994 and since January of 1996.

Kim Magness (1)                      TCI director since June of 1994; TCIC director from 1985 to August of
Born May 17, 1952                    1994 and since January of 1996. Manages numerous personal and business
                                     investments, and is Chairman and President of a company developing
                                     liners for irrigation canals.

Robert A. Naify (3)                  TCI director since June of 1994; TCIC director from 1987 to August of
Born February 17, 1922               1994; also Co-Chairman and a director of The Todd-AO Corporation.
</TABLE>

                                                                     (continued)


                                    III-1
<PAGE>   4
<TABLE>
<CAPTION>
            Name                                                  Positions                             
----------------------------         ------------------------------------------------------------------ 
<S>                                  <C>
Jerome H. Kern (2)                   TCI director since June of 1994; TCIC director from December of 1993 to
Born June 1, 1937                    August of 1994; director of Tele-Communications International, Inc.
                                     ("International"), a subsidiary of TCI, since May, 1995; also is
                                     Special Counsel with the law firm of Baker & Botts, L.L.P., since July,
                                     1996; was a senior partner with Baker & Botts, L.L.P. since September
                                     of 1992.  Prior to joining Baker & Botts, L.L.P., was senior partner
                                     with the Law Offices of Jerome H. Kern from January 1, 1992 to
                                     September 1, 1992.

Tony Coelho (3)                      TCI director since June, 1994; Appointed TCIC director from March of
Born June 14, 1942                   1994 to August of 1994; is chairman of the board and chief executive
                                     officer of ETC w/tci, Inc. (TCI's newly formed education subsidiary)
                                     since October 1995; Chairman and Chief Executive Officer of Coelho
                                     Associates, LLC since July of 1995; President and Chief Executive
                                     Officer of Wertheim Schroder Investment Services from 1990 to June of
                                     1995 and Managing Director of Wertheim Schroder & Co., Incorporated
                                     from 1989 to June of 1995; also a director of AutoLend Group, Inc.,
                                     Cyberonics, Inc., ICF Kaiser International, Inc., International
                                     Thoroughbred Breeders, Inc., Service Corporation International and
                                     Tanknology Environ-mental, Inc.

Paul A. Gould (2)                    Director of the Company since December, 1996.  Director of
Born September 27, 1945              International since July 1995.  Managing Director and Executive Vice
                                     President of Allen & Company Incorporated for more than the last five
                                     years.  Also a director of National Patent Development Corporation,
                                     Choice International and United Video Satellite Group, Inc.

J. C. Sparkman (1)                   TCI director since December, 1996; Executive Vice President of TCI from
Born September 12, 1932              January of 1994 through March of 1995.  Mr. Sparkman retired in March
                                     of 1995.  Mr. Sparkman has provided consulting services to TCI since
                                     March of 1995.  TCIC Executive Vice President from 1987 to October of 1994.
                                     Also a director of Shaw Communications, Inc., DMX Inc. and United Video
                                     Satellite Group, Inc.

Leo J. Hindery, Jr.                  In March of 1997, Mr. Hindery joined TCI as its President and Chief
Born October 31, 1947                Operating Officer.  Mr. Hindery was previously founder, Managing
                                     General Partner and Chief Executive Officer of InterMedia Partners and
                                     its affiliated entities since 1988.  Mr. Hindery was also named
                                     President and a director of TCIC in March of  1997.

Stephen M. Brett                     Executive Vice President, General Counsel and Secretary of TCI since
Born September 20, 1940              January of 1994.  Appointed TCIC Senior Vice President and General
                                     Counsel of TCIC as of December of 1991.  Vice President and Secretary
                                     and a director of most of TCI's subsidiaries.
</TABLE>

                                                                     (continued)





                                     III-2
<PAGE>   5
<TABLE>
<CAPTION>
            Name                                                  Positions                            
----------------------------         ------------------------------------------------------------------
<S>                                  <C>
Fred A. Vierra                       Executive Vice President of TCI since January of 1994. Chief Executive
Born November 9, 1931                Officer and director of International since October of 1994.  Vice
                                     Chairman of the Board of International since May of 1995.  From October
                                     1994 through May 1995, Mr. Vierra served as Chairman of the Board of
                                     International.  Executive Vice President of TCIC from December of 1991
                                     to October of 1994.

Robert R. Bennett                    President and Chief Executive Officer of Liberty Media Corporation
Born April 19, 1958                  ("Liberty") since April of 1997.  From June 1995 through March 1997,
                                     was Executive Vice President, Chief Financial Officer, Secretary and
                                     Treasurer of Liberty.  Prior to June 1995, was Senior Vice President of
                                     Liberty since September 1991 and Vice President of TCIC from 1990
                                     through March 1991 while also holding the titles of Treasurer,
                                     Secretary and Chief Financial Officer of Liberty.

Brendan R. Clouston                  Executive Vice President of TCI since January of 1994; Chief Financial
Born April 28, 1953                  Officer of TCI from March 1997 to April 1997; President and Chief
                                     Executive Officer of TCIC from October of 1994 to March of 1997;
                                     Executive Vice President and Chief Operating Officer of TCIC from March
                                     of 1992 to October of 1994; previously Senior Vice President of TCIC
                                     since December of 1991.

Larry E. Romrell                     Executive Vice President of TCI since January of 1994. President of TCI
Born December 30, 1939               Technology Ventures, Inc., a wholly-owned subsidiary of TCI, since
                                     September of 1994 and a director of same since December of 1994; Senior
                                     Vice President of TCIC from 1991 to October of 1994; previously held
                                     various executive positions with WestMarc Communications, Inc.
                                     ("WestMarc"), a wholly-owned subsidiary of TCI.

Marvin Jones                         Appointed TCIC Executive Vice President and Chief Operating Officer in
Born September 11, 1937              March 1997.  Named TCIC director in 1997.  President of one of TCIC's
                                     three cable units since November 1, 1996.  Consultant since December
                                     1991 in the cable television industry.

Gary K. Bracken                      Controller of TCIC since 1969.  Appointed Senior Vice President of TCIC
Born July 29, 1939                   in December of 1991.  Was named Vice President and Principal Accounting
                                     Officer of TCIC in 1982.  Senior Vice President of TPAC.

Bernard W. Schotters                 Appointed Senior Vice President-Finance and Treasurer of TCIC in
Born November 25, 1944               December of 1991.  Was appointed Vice President-Finance of TCIC in
                                     1984.  Vice President and Treasurer of most of TCI's subsidiaries.

Robert N. Thomson                    Appointed Senior Vice President of TCIC in February of 1995.  Senior
Born December 19, 1943               Vice President of Communications and Policy Planning for TCIC from 1991
                                     to October of 1994.
</TABLE>

_______________________________
                                                                     (continued)





                                     III-3
<PAGE>   6



(1)  Director's term expires in 1997.
(2)  Director's term expires in 1998.
(3)  Director's term expires in 1999.


         Mr. Bob Magness, founder and Chairman of the Board of TCI, died in
November of 1996.  Mr. Magness had been Chairman of the Board and director of
TCI since June of 1994 and of TCIC (predecessor company to TCI) since 1973.  He
had been a TCIC director since 1968.  On November 25, 1996, the Board of
Directors named John C. Malone to the position of Chairman of the Board to
replace Bob Magness.  On December 13, 1996, the Board of Directors named Paul
A. Gould as director to fill the unexpired term on the Board of Directors held
by Bob Magness.

         Mr. Peter R. Barton was Executive Vice President of TCI since January
of 1994 and was President and Chief Executive Officer of Liberty since June of
1990.  In April of 1997, Mr. Barton resigned his positions with the Company.

         Mr. Barry P. Marshall was Executive Vice President and Chief Operating
Officer of TCIC from October of 1994 through March of 1997.  In March of 1997,
Mr. Marshall resigned his positions as Executive Vice President and Chief
Operating Officer of TCIC.  Mr. Marshall was Executive Vice President and Chief
Operating Officer of TCI Cable Management Corporation, TCIC's primary operating
subsidiary, from March of 1992 through January 1, 1994, where he directly
oversaw all of TCIC's regional operating divisions.  From 1986 to March of
1992, Mr. Marshall was Vice President and Chief Operating Officer of TCIC's
largest regional operating division.

         There are no family relations, of first cousin or closer, among the
above named individuals, by blood, marriage or adoption, except that Bob
Magness and Kim Magness were father and son, respectively.

         During the past five years, none of the above persons have had any
involvement in such legal proceedings as would be material to an evaluation of
his ability or integrity.

         Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires TCI's executive officers and directors, and persons who own more than
ten percent of a registered class of TCI's equity securities, to file reports
of ownership and changes in ownership with the Securities and Exchange
Commission ("SEC").  Officers, directors and greater than ten-percent
shareholders are required by SEC regulation to furnish TCI with copies of all
Section 16(a) forms they file.

         Based solely on review of the copies of such Forms 3, 4 and 5 and
amendments thereto furnished to TCI with respect to its most recent fiscal
year, or written representations that no Forms 5 were required, TCI believes
that, during the year ended December 31, 1996, all Section 16(a) filing
requirements applicable to its officers, directors and greater than ten-percent
beneficial owners were complied with except that one report, covering one
transaction, was filed late by Mr. Donne F. Fisher, a director of the Company,
one report, covering one transaction, was filed late by Mr. J.C. Sparkman,
another director of the Company, and one report, covering shares held by minors,
was filed late by Mr. Bernard W. Schotters, an officer of the Company.

Item 11.         Executive Compensation.

         (a)     Summary Compensation Table of Tele-Communications, Inc.

         The following table shows, for the three years ended December 31,
1996, all forms of compensation for the Chief Executive Officer and each of the
four most highly compensated executive officers of TCI, whose total annual
salary and bonus exceeded $100,000 for the year ended December 31, 1996.
Additionally, the following table includes disclosure of all forms of
compensation paid to Mr. Bob Magness during the year ended December 31, 1996.
                                                                     (continued)





                                     III-4
<PAGE>   7



         On December 4, 1996, the Company distributed (the "Distribution") to
the holders of shares of TCI Group common stock all of the issued and
outstanding common stock of Satellite.  Certain directors, officers and
employees of TCI and its subsidiaries have been granted options to purchase
shares of Series A TCI Group common stock ("TCI Options") and stock
appreciation rights with respect to shares of Series A TCI Group common stock
("TCI SARs").  The TCI Options and TCI SARs have been granted pursuant to
various stock plans of TCI (the "TCI Plans").  The TCI Plans give the Board of
Directors of TCI (the "TCI Board") the authority to make equitable adjustments
to outstanding TCI Options and TCI SARs in the event of certain transactions,
of which the Distribution of Satellite was one.

         The TCI Board determined that, immediately prior to the Distribution,
each TCI Option would be divided into two separately exercisable options:  (i)
an option to purchase TCI Satellite Entertainment, Inc. Series A common stock
("SATCo Option"), exercisable for the number of shares of TCI Satellite
Entertainment, Inc. Series A common stock ("SATCo Series A Stock") that would
have been issued in the Distribution in respect of the shares of Series A TCI
Group common stock ("TCI Group Series A Stock") subject to the applicable TCI
Option, if such TCI Option had been exercised in full immediately prior to the
record date of the Distribution, and containing substantially equivalent terms
as the existing TCI Option, and (ii) an option to purchase TCI Group Series A
Stock (a "TCI Group Series A Option"), exercisable for the same number of
shares of TCI Group Series A Stock as the corresponding TCI Option had been.
The aggregate exercise price of each TCI Option was allocated between the SATCo
Option and the TCI Group Series A Option into which it was divided, and all
other terms, including date of grant, of the SATCo Option and TCI Group Series
A Option are in all material respects the same as the terms of such TCI Option.
Similar adjustments were made to the outstanding TCI SARs, resulting in the
holders thereof holding TCI Group Series A SARs and SATCo SARs instead of TCI
SARs, and to outstanding restricted stock awards, resulting in the holders
thereof holding restricted shares of SATCo Series A Stock in addition to
restricted stock of TCI Group Series A Stock, effective immediately prior to
the Distribution.  The foregoing adjustments were made pursuant to the
anti-dilution provisions of the TCI Plans pursuant to which the respective TCI
Group Series A Options and TCI Group Series A SARs were granted.

         Prior to the Distribution, TCI and Satellite entered into an agreement
to sell to each other from time to time at the then current market price shares
of TCI Group Series A Stock and SATCo Series A Stock, respectively, as
necessary to satisfy their respective obligations under such securities.

         TCI, in addition to the TCI Group Series A Stock, has shares of the
Tele-Communications, Inc. Series B TCI Group common stock ("TCI Group Series B
Stock") the Tele-Communications, Inc. Series A Liberty Media Group common stock
("Liberty Group Series A Stock"), and the Tele-Communications, Inc. Series B
Liberty Media Group common stock ("Liberty Group Series B Stock") outstanding.
Prior to the Distribution, Satellite was a member of the TCI Group and all of
the assets and businesses transferred to Satellite were included in the TCI
Group. Accordingly, the Distribution was made to the TCI Group Stockholders and
the holders of Liberty Media Group Common Stock did not participate in the
Distribution.

         Effective January 14, 1997, the Company issued a stock dividend to
holders of Liberty Media Group common stock consisting of one share of Liberty
Group Series A Stock for every two shares of Liberty Group Series A Stock owned
and one share of Liberty Group Series A Stock for every two shares of Liberty
Group Series B Stock owned (the "Liberty Group Stock Dividend").  As a result
of the Liberty Group Stock Dividend, the number of options granted to purchase
Liberty Series A Stock and the price to purchase such options have been
adjusted.
                                                                     (continued)





                                     III-5
<PAGE>   8




<TABLE>
<CAPTION>
                                                                    Long-Term Compensation
                                                                ------------------------------
                                Annual Compensation                         Awards             
                       -------------------------------------    ------------------------------
                                                   Other                           Securities
                                                   Annual         Restricted       Underlying
                                                  Compen-           Stock           Options/         All Other
 Name and Principal                                sation          Award(s)           SARs         Compensation
      Position         Year     Salary ($)          ($)              ($)            (#) (17)            ($)     
--------------------   ----    -----------    --------------    -------------    -------------    ---------------
<S>                    <C>     <C>             <C>              <C>              <C>              <C>
Bob Magness            1996    $863,462       $ 65,900(3)(4)           ---             ---        $17,000(15)(16)
Formerly Chairman      1995    $850,000       $    ---                 ---       1,475,000(10)    $17,500(15)(16)
   of the Board        1994    $830,769       $    ---                 ---             ---        $ 2,500(16)

John C. Malone         1996    $900,000       $  4,496(3)              ---          50,000(12)    $17,500(15)(16)
Chief Executive        1995    $850,000(1)    $  3,758(3)              ---       1,475,000(10)    $17,500(15)(16)
   Officer             1994    $821,731(1)    $  2,610(3)              ---             ---        $17,500(15)(16)

Fred A. Vierra         1996    $650,000(2)    $  4,231(3)              ---             ---        $15,000(15)
Executive Vice         1995    $650,000(2)    $  3,207(3)       $  380,625(6)      400,000(10)    $15,000(15)
   President           1994    $669,613(2)    $  1,024(3)              ---         295,000(11)    $15,000(15)

Brendan R. Clouston    1996    $650,000       $244,147(3)(5)    $1,999,500(7)      664,106(13)    $15,000(15)
Executive Vice         1995    $550,000       $  3,181(3)       $2,062,500(8)    1,100,000(10)    $15,000(15)
   President           1994    $525,000       $  1,000(3)              ---         295,000(11)    $15,000(15)
                                        
Peter R. Barton        1996    $503,846       $  1,315(3)              ---             ---        $ 9,500(15)
Executive Vice         1995    $400,000       $  1,283(3)              ---       1,500,000(10)    $ 9,240(15)
   President           1994    $350,000       $    ---                 ---         295,000(11)    $ 9,240(15)
                                        
Larry E. Romrell       1996    $500,000       $  4,910(3)              ---         664,086(14)    $15,000(15)
Executive Vice         1995    $408,654       $  3,788(3)       $1,087,500(9)      442,500(10)    $15,000(15)
   President           1994    $391,347       $  1,659(3)              ---         295,000(11)    $15,000(15)
</TABLE>

____________________

(1)      Includes deferred compensation of $320,000 in each of 1995 and 1994.

(2)      Includes deferred compensation of $250,000 in each of the years
         presented.

(3)      Consists of amounts reimbursed during the year for the payment of
         taxes.  During 1996, a total of $4,207 was paid to Mr. Clouston and
         $4,159 was paid to Mr. Magness.

(4)      Includes $61,741 in 1996 representing the Company's allocated cost for
         personal use of the Company's aircraft and flight crew.

(5)      Includes $239,940 in 1996 of dividend income received on WestMarc
         preferred stock which is subject to forfeiture (see note 7 below).

(6)      International, a majority owned subsidiary of TCI, has a stock
         incentive plan (the "International Plan").  On December 13, 1995,
         pursuant to the International Plan, Mr. Vierra was granted 15,000
         restricted shares of Series A Tele-Communications International, Inc.
         common stock ("TINTA Series A Stock").  Such restricted shares vest as
         to 50% of such shares on December 13, 1999 and as to the remaining 50%
         of such shares on December 13, 2000.  The value of such restricted
         stock award was $198,750 at the end of 1996 based upon the closing
         price of TINTA Series A Stock on December 31, 1996.  International has
         not paid cash dividends on TINTA Series A Stock and does not anticipate
         declaring and paying cash dividends on the TINTA Series A Stock at any
         time in the foreseeable future.

                                                                     (continued)





                                     III-6
<PAGE>   9



(7)      On July 1, 1996, pursuant to a Restricted Stock Award Agreement, Mr.
         Clouston was transferred all of the Company's right title and interest
         in and to 62 shares of the 12% Series C Cumulative Compounding
         Preferred Stock of WestMarc owned by the Company.  Such preferred
         stock is subject to forfeiture in the event of certain circumstances
         from the date of grant through December 13, 2005.

(8)      The Company has a stock incentive plan, the Tele-Communications, Inc.
         1994 Stock Incentive Plan (the "1994 Plan").  On December 13, 1995,
         pursuant to the 1994 Plan, Mr. Clouston was granted 100,000 restricted
         shares of TCI Group Series A Stock and 10,000 restricted shares of
         SATCo Series A Stock.  Such restricted shares vest as to 50% of such
         shares on December 13, 1999 and as to the remaining 50% of such shares
         on December 13, 2000.  The value of such restricted stock award was
         $1,405,000 at the end of 1996 based upon the closing price of TCI Group
         Series A Stock and SATCo Series A Stock on December 31, 1996. TCI has
         not paid cash dividends on the TCI Group Series A Stock and does not
         anticipate declaring and paying cash dividends on the TCI Group Series
         A Stock at any time in the foreseeable future.

(9)      On December 13, 1995, pursuant to the 1994 Plan, Mr. Romrell was
         granted 40,000 restricted shares of TCI Group Series A Stock, 15,000
         restricted shares of Liberty Group Series A Stock and 4,000 restricted
         shares of SATCo Series A Stock.  Such restricted shares vest as to 50%
         of such shares on December 13, 1999 and as to the remaining 50% of
         such shares on December 13, 2000.  The value of such restricted stock
         award was $847,630 at the end of 1996 based upon the closing prices
         of TCI Group Series A Stock, Liberty Group Series A Stock and SATCo
         Series A Stock on December 31, 1996.  TCI has not paid cash dividends
         on the Liberty Group Series A Stock and does not anticipate declaring
         and paying cash dividends on the Liberty Group Series A Stock at any
         time in the foreseeable future.

(10)     On December 13, 1995, pursuant to an incentive plan (the "1996 Plan"),
         certain executive officers of TCI were granted an aggregate of
         2,000,000 Options in tandem with stock appreciation rights to acquire
         shares of TCI Group Series A Stock, 1,650,000 Liberty Group Series A
         Options in tandem with stock appreciation rights to acquire shares of
         Liberty Series A Stock and 200,000 SATCo Series A Options in tandem
         with stock appreciation rights to acquire shares of SATCo Series A
         Stock at adjusted purchase prices of $14.62, $16.00 and $23.76 per
         share, respectively.  Each such grant of options with tandem stock
         appreciation rights vests evenly over five years with such vesting
         period beginning August 4, 1995, first becomes exercisable beginning
         on August 4, 1996 and expires on August 4, 2005.

                                                                     (continued)





                                     III-7
<PAGE>   10



         On December 13, 1995, pursuant to the 1994 Plan, certain executive
         officers were granted an aggregate of 2,650,000 TCI Group Series A
         Options in tandem with stock appreciation rights to acquire shares of
         Series A Stock, an aggregate of 1,012,500 Liberty Group Series A
         Options in tandem with stock appreciation rights to acquire shares of
         Liberty Series A Stock and 265,000 SATCo Series A Options in tandem
         with stock appreciation rights to acquire shares of SATCo Series A
         Stock at adjusted purchase prices of $14.62, $16.00 and $23.76 per
         share, respectively.  Additionally, the Company has a stock incentive
         plan, the Tele-Communications, Inc. 1995 Stock Incentive Plan (the
         "1995 Plan").  On December 13, 1995, pursuant to the 1995 Plan,
         certain key employees were granted an aggregate of 2,757,500 TCI Group
         Series A Options in tandem with stock appreciation rights to acquire
         shares of Series A Stock, an aggregate of 654,000 Liberty Group Series
         A Options in tandem with stock appreciation rights to acquire shares
         of Liberty Series A Stock and 275,750 SATCo Series A Options in tandem
         with stock appreciation rights to acquire shares of SATCo Series A
         Stock at adjusted purchase prices of $14.62, $16.00 and $23.76 per
         share, respectively.  Each such grant of options with tandem stock
         appreciation rights vests evenly over five years with such vesting
         period beginning August 4, 1995, first becomes exercisable beginning
         on August 4, 1996 and expires on August 4, 2005.

         Notwithstanding the vesting schedule as set forth in the option
         agreement, the option shares shall become available for purchase if
         grantee's employment with the Company (a) shall terminate by reason of
         (i) termination by the Company without cause (ii) termination by the
         grantee for good reason (as defined in the agreement) or (iii)
         disability, (b) shall terminate pursuant to provisions of a written
         employment agreement, if any, between the grantee and the Company
         which expressly permits the grantee to terminate such employment upon
         occurrence of specified events (other than the giving of notice and
         passage of time), or (c) if grantee dies while employed by the
         Company.  Further, the option shares will become available for
         purchase in the event of an Approved Transaction, Board Change, or
         Control Purchase (each as defined in the applicable Plan), unless in
         the case of an Approved Transaction, the Compensation Committee under
         the circumstances specified in the Plan determines otherwise.

(11)     On November 17, 1994, pursuant to the 1994 Plan, certain executive
         officers and other key employees were granted an aggregate of
         3,220,000 TCI Group Series A Options in tandem with stock appreciation
         rights to acquire shares of Series A Stock at an adjusted purchase
         price of $14.19 per share, an aggregate of 1,196,625 Liberty Group
         Series A Options in tandem with stock appreciation rights to acquire
         shares of Liberty Series A Stock at a purchase price of $14.67 per
         share and 322,000 SATCo Series A Options in tandem with stock
         appreciation rights at an adjusted purchase price of $23.06 per share.
         Such options vest evenly over five years, became exercisable beginning
         on November 17, 1995 and expire on November 17, 2004.

(12)     On April 11, 1996, Dr. Malone was granted, pursuant to the
         International Director Stock Option Plan, options to acquire 50,000
         shares of TINTA Series A Stock.  For additional information relating
         to this grant, see note 4 to the table provided pursuant to Item
         11(b).

(13)     On December 1, 1996, Mr. Clouston was granted options to acquire 10
         shares of TCI Telephony Services, Inc.  common stock (the "Telephony
         Options"), 10 shares of TCI Wireline, Inc. common stock (the "Wireline
         Options") and 10 shares of TCI.NET, Inc. common stock (the "Internet
         Options"). On December 4, 1996, Mr. Clouston was granted options to
         acquire 664,076 shares of SATCo Series A Stock.  For additional
         information with respect to such grants, see the notes to the table
         provided in Item 11(b).

                                                                     (continued)





                                     III-8
<PAGE>   11



(14)     On December 1, 1996, Mr. Romrell was granted an option to acquire 10
         shares of TCI.NET, Inc.  On December 4, Mr. Romrell was granted
         options to acquire 664,076 shares of SATCo Series A Stock.  For
         additional information with respect to such grants, see the notes to
         the table provided in Item 11(b).

(15)     Includes dollar value of annual TCI contributions to the TCI Employee
         Stock Purchase Plan ("ESPP") in which all named executive officers are
         fully vested.  Directors who are not employees of TCI are ineligible
         to participate in the ESPP.  The ESPP, a defined contribution plan,
         enables participating employees to acquire a proprietary interest in
         TCI and benefits upon retirement.  Under the terms of the ESPP,
         employees are eligible for participation after one year of service.
         The ESPP's normal retirement age is 65 years.  Participants may
         contribute up to 10% of their compensation and TCI (by annual
         resolution of the Board of Directors) may contribute up to 100% of the
         participants' contributions.  The ESPP includes a salary deferral
         feature in respect of employee contributions.  Forfeitures (due to
         participants' withdrawal prior to full vesting) are used to reduce
         TCI's otherwise determined contributions.  Generally, participants
         acquire a vested right in TCI contributions as follows:

<TABLE>
<CAPTION>
                                   Years of service                  Vesting Percentage
                                   ----------------                  ------------------
                                   <S>                                       <C>
                                   Less than 1                               0  
                                           1-2                               20 
                                           2-3                               30 
                                           3-4                               45 
                                           4-5                               60 
                                           5-6                               80 
                                           6 or more                         100
</TABLE>

         Participant contributions are fully vested.  Although TCI has not
         expressed an intent to terminate the ESPP, it may do so, at any time.
         The ESPP provides for full and immediate vesting of all participants'
         rights upon termination.  In each of the years ending December 31,
         1996, 1995 and 1994, TCI contributed $15,000 to the ESPP for Dr.
         Malone.  In each of the years ended December 31, 1996 and 1995, TCI
         contributed $15,000 to the ESPP for Mr. Magness.

(16)     Includes fees paid to directors for attendance at each meeting of the
         Board of Directors ($500 per meeting).  During each of the years
         ending December 31, 1996, 1995 and 1994, a total of $2,500 of such
         fees, respectively, were paid to Dr. Malone.  During 1996, 1995 and
         1994, $2,000, $2,500 and $2,500 was paid to Mr. Magness, respectively.

(17)     Adjusted to reflect the effect of the Distribution and the Liberty
         Group Stock Dividend.

                                                                     (continued)





                                     III-9
<PAGE>   12



         (b)     Option/SAR Grants Table of Tele-Communications, Inc.  The
following table shows all individual grants of stock options and stock
appreciation rights ("SARs") granted to each of the named executive officers of
TCI during the year ended December 31, 1996:

<TABLE>
<CAPTION>
                       Number of
                       Securities
                       Underlying        % of Total
                         Options/       Options/SARs
                           SARs           Granted        Exercise or    Market Price                           Grant Date
                          Granted       to Employees     Base Price       on Grant         Expiration         Present Value
Name                        (#)        in Fiscal Year      ($/Sh)        Date ($/Sh)          Date                 ($)      
----                    -----------      ----------      ----------      -----------      -------------      ---------------
<S>                    <C>              <C>              <C>             <C>              <C>                <C>           
Brendan R. Clouston         10(1)            50%         $ 855,631(1)    $ 2,100,000(6)   February 1, 2006   $ 13,477,000(9) 
                            10(2)            50%         $  12,537(2)    $    12,537(6)   February 1, 2006   $     44,000(10)
                            10(3)        33 1/3%         $  55,246(3)    $   400,000(6)   February 1, 2006   $  3,468,000(11)
                       664,076(4)          28.6%         $    8.86       $    12.625(7)   February 1, 2006   $  5,806,083(12)
                                                                                                                              
Larry E. Romrell            10(3)        33 1/3%         $  55,246(3)    $   400,000(6)   February 1, 2006   $  3,468,000(11)
                       664,076(4)          28.6%         $    8.86       $    12.625(7)   February 1, 2006   $  5,806,083(12)
                                                                                                                              
John C. Malone         50,000(5)             25%         $   16.00       $     20.25(8)   April 11, 2006     $    400,450(13)
</TABLE>

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

(1)      Effective December 1, 1996, Mr. Clouston and another employee of TCI
         were each granted Telephony Options representing 1.0% of the Company's
         common equity in TCI Telephony Services, Inc. ("TCI Telephony").  The
         aggregate exercise price for each such option, which is payable to TCI
         Telephony, is equal to 1.0% of (i) the Company's cumulative investment
         in TCI Telephony as of December 1, 1996, adjusted for a 6% per annum
         interest factor from the date each such investment was made to the
         date of such exercise, less (ii) the sum of (x) $500 million
         (representing the aggregate initial liquidation price of a TCI
         Telephony preferred stock) and (y) the amount of the tax benefits
         generated by the TCI Telephony (up to $500 million) as and when used
         by TCI.  The per share exercise price on the date of grant was
         $850,029.  Any exercise by one of such executive officers of all or
         part of such options would need to be accompanied by the exercise by
         such executive officer of a pro rata portion of the option described
         in note 3 below.  All of such options will vest and become exercisable
         in five equal annual installments, with the first annual installment
         vesting on February 1, 1997, and will expire on February 1, 2006.

(2)      Effective December 1, 1996, Mr. Clouston and another employee of TCI
         were each granted Wireline Options representing 1.0% of the Company's
         common equity in TCI Wireline, Inc. ("TCI Wireline").  The aggregate
         exercise price for each such option, which is payable to TCI Wireline,
         is equal to 1.0% of the Company's cumulative investment in TCI
         Wireline as of December 1, 1996, adjusted for a 6% per annum interest
         factor from the date each such investment was made to the date of such
         exercise.  The per share exercise price on the date of grant was
         $12,502.  All of such options will vest and become exercisable in
         five equal annual installments, with the first annual installment
         vesting on February 1, 1997, and will expire on February 1, 2006.
         Such options must be exercised on a pro rata basis with the Telephony
         Options as discussed in note 2 above.

                                                                     (continued)





                                     III-10
<PAGE>   13



(3)      Effective December 1, 1996, Mr. Clouston, Mr. Romrell and another
         employee of TCI were each granted Internet Options representing 1.0%
         of the Company's common equity in TCI.NET, Inc. ("TCI.NET").  The
         aggregate exercise price for each such option, which is payable to
         TCI.NET, is equal to 1.0% of the Company's cumulative investment in
         TCI.NET as of December 1, 1996, adjusted for a 6% per annum interest
         factor from the date each such investment was made to the date of such
         exercise.  The per share exercise price on the date of grant was
         $55,070.  All of such options will vest and become exercisable in
         five equal annual installments, with the first annual installment
         vesting on February 1, 1997, and will expire on February 1, 2006.
         

(4)      On December 4, 1996, Mr. Clouston and Mr. Romrell were each was
         granted an option to purchase 664,076 shares of SATCo Series A Stock
         representing 1.0% of the number of shares of Satellite common stock
         issued and outstanding on the date of the Distribution, determined
         immediately after giving effect to the Distribution, but before giving
         effect to the exercise of such option or the other options to be
         evidenced by a stock option agreement.  The aggregate exercise price
         for such option is equal to 1.0% of TCI's net investment as of the
         date of the Distribution, but excluding any portion of TCI's net
         investment that as of such date is represented by a promissory note or
         other evidence of indebtedness from Satellite to TCI.  All of such
         options will vest and become exercisable in five equal annual
         installments, with the first annual installment vesting on February 1,
         1997, and will expire on February 1, 2006. Another employee of TCI 
         received a 1.0% option and another employee received a 0.5% option.

(5)      On April 11, 1996, pursuant to the International Director Stock Option
         Plan, certain directors of International were granted an aggregate of
         200,000 options to acquire shares of TINTA Series A Stock at a
         purchase price of $16.00 per share.  Such options vest evenly over
         five years, first become exercisable on April 11, 1997 and expire on
         April 11, 2006.

(6)      Represents the market value on December 1, 1996 as determined by the
         Board of Directors.

(7)      Represents the closing market price per share of SATCo Series A Stock
         on December 5, 1996, the first day of trading following the date of
         grant.

(8)      Represents the closing market price per share of TINTA Series A Stock
         on April 11, 1996.

(9)      The values shown are based on the Black-Scholes model and are stated
         in current annualized dollars on a present value basis.  The key
         assumptions used in the model for purposes of this calculation include
         the following: (a) a 6.87% discount rate; (b) a 50% volatility factor;
         (c) the 10-year option term; (d) the market value of the Telephony
         Option on December 1, 1996 as determined by the Board of Directors of
         TCI; (e) a per share exercise price of $850,029 on December 1, 1996;
         and (f) a 6% per annum interest adjustment to the exercise price. The
         actual value an executive may realize will depend upon the extent to
         which the stock price exceeds the exercise price on the date the option
         is exercised. Accordingly, the value, if any, realized by an executive
         will not necessarily be the value determined by the model.

(10)     The values shown are based on the Black-Scholes model and are stated
         in current annualized dollars on a present value basis.  The key
         assumptions used in the model for purposes of this calculation include
         the following: (a) a 6.87% discount rate; (b) a 55% volatility factor;
         (c) the 10-year option term; (d) the market value of the Wireline
         Option on December 1, 1996 as determined by the Board of Directors of
         TCI; (e) a per share exercise price of $12,502 on December 1, 1996; and
         (f) a 6% per annum adjustment to the exercise price.  The actual value
         an executive may realize will depend upon the extent to which the stock
         price exceeds the exercise price on the date the option is exercised.
         Accordingly, the value, if any, realized by an executive will not
         necessarily be the value determined by the model.

                                                                     (continued)





                                     III-11
<PAGE>   14



(11)     The values shown are based on the Black-Scholes model and are stated
         in current annualized dollars on a present value basis.  The key
         assumptions used in the model for purposes of this calculation include
         the following: (a) a 6.87% discount rate; (b) a 60% volatility factor;
         (c) the 10-year option term; (d) the market value of the Internet
         Option on December 1, 1996 as determined by the Board of Directors of
         TCI; (e) a per share exercise price of $55,070 on December 1, 1996;
         and (f) a 6% per annum interest adjustment to the exercise price. The
         actual value an executive may realize will depend upon the extent to
         which the stock price exceeds the exercise price on the date the
         option is exercised.  Accordingly, the value, if any, realized by an
         executive will not necessarily be the value determined by the  model.

(12)     The values shown are based on the Black-Scholes model and are stated
         in current annualized dollars on a present value basis.  The key
         assumptions used in the model for purposes of this calculation include
         the following: (a) a 6.22% discount rate; (b) a 35% volatility factor;
         (c) the 10-year option term; (d) the closing price of SATCo Series A
         Stock on December 5, 1996; and (e) a per share exercise price of
         $8.86.  The actual value an executive may realize will depend upon the
         extent to which the stock price exceeds the exercise price on the date
         the option is exercised.  Accordingly, the value, if any, realized by
         an executive will not necessarily be the value determined by the
         model.

(13)     The values shown are based on the Black-Scholes model and are stated
         in current annualized dollars on a present value basis.  The key
         assumptions used in the model for purposes of this calculation include
         the following: (a) a 6.25% discount rate; (b) a 35% volatility factor;
         (c) the 10-year option term; (d) the closing price of TINTA Series A
         Stock on February 14, 1997; and (e) a per share exercise price of
         $16.00.  The actual value an executive may realize will depend upon
         the extent to which the stock price exceeds the exercise price on the
         date the option is exercised.  Accordingly, the value, if any,
         realized by an executive will not necessarily be the value determined
         by the model.

         (c)     Aggregated Option/SAR Exercises and Fiscal Year-End Option/SAR
Value Table of Tele-Communications, Inc.  The following table shows each
exercise of stock options and SARs during the year ended December 31, 1996 by
each of the named executive officers of TCI and the December 31, 1996 number
and year-end value of unexercised options and SARs on an aggregated basis:

<TABLE>
<CAPTION>
                                                                    Number of
                                                                  Securities         Value of
                                                                  Underlying        Unexercised
                                                                  Unexercised      In-the-Money
                                                                  Options/SARs      Options/SARs
                                                                       at                at
                                                                  December 31,      December 31,
                                                                     1996 (#)          1996 ($)
                        Shares Acquired       Value Realized     Exercisable/      Exercisable/
Name                    on Exercise (#)             ($)          Unexercisable     Unexercisable
----                     ------------------  -----------------   -------------     -------------
<S>                         <C>                 <C>               <C>              <C>
John C. Malone
 Exercisable
   Series A                     --                  --              1,000,000      $1,850,000
   Liberty Series A             --                  --                375,000      $2,592,750
   TINTA Series A               --                  --                     --              --
   SATCo Series A               --                  --                100,000              --
 Unexercisable
   Series A                     --                  --              1,000,000      $  462,500
   Liberty Series A             --                  --                375,000      $1,503,750
   TINTA Series A               --                  --                 50,000              --
   SATCo Series A               --                  --                100,000              --
</TABLE>

                                                                     (continued)





                                     III-12
<PAGE>   15




<TABLE>
<CAPTION>
                                                                    Number of
                                                                    Securities         Value of
                                                                    Underlying       Unexercised
                                                                   Unexercised       In-the-Money
                                                                   Options/SARs      Options/SARs
                                                                        at                at
                                                                   December 31,      December 31,
                                                                     1996 (#)          1996 ($)
                           Shares Acquired      Value Realized     Exercisable/      Exercisable/
Name                        on Exercise (#)             ($)       Unexercisable     Unexercisable
-----                     ------------------  -----------------   -------------     -------------
<S>                                <C>                 <C>             <C>           <C>
Fred A. Vierra
   Exercisable
      Series A                     --                  --                235,000      $  358,438
      Liberty Series A             --                  --                 88,125      $  589,301
      TINTA Series A               --                  --                 80,000              --
      SATCo Series A               --                  --                 23,500              --
   Unexercisable
      Series A                     --                  --                165,000      $  104,063
      Liberty Series A             --                  --                 61,875      $  329,749
      TINTA Series A               --                  --                320,000              --
      SATCo Series A               --                  --                 16,500              --

Brendan R. Clouston
   Exercisable
      Series A                     --                  --                730,000     $ 1,040,625
      Liberty Series A             --                  --                198,750     $ 1,461,248
      SATCo Series A               --                  --                 80,125              --
      Telephony                    --                  --                     --              --
      Wireline                     --                  --                     --              --
       Internet                    --                  --                     --              --
   Unexercisable
      Series A                     --                  --              1,145,000     $   520,313
      Liberty Series A             --                  --                129,375     $   861,784
      SATCo Series A               --                  --                771,451     $   674,037
      Telephony                    --                  --                     10     $12,443,692
      Wireline                     --                  --                     10              --
       Internet                    --                  --                     10     $ 3,447,538

Peter R. Barton
   Exercisable
      Series A                     --                  --                719,321     $ 8,018,689
      Liberty Series A             --                  --                569,745     $ 5,479,514
      SATCo Series A               --                  --                 71,933     $   577,631
   Unexercisable
      Series A                     --                  --                226,554     $ 1,336,448
      Liberty Series A             --                  --              1,284,957     $ 4,586,432
      SATCo Series A               --                  --                 22,655     $    96,272

Larry E. Romrell
   Exercisable
      Series A                     --                  --                295,000     $   358,438
      Liberty Series A             --                  --                110,625     $   657,746
      SATCo Series A               --                  --                 29,500              --
      Internet                     --                  --                     --              --
   Unexercisable
      Series A                     --                  --                405,000     $   104,063
      Liberty Series A             --                  --                151,875     $   603,529
      SATCo Series A               --                  --                704,576     $   674,037
      Internet                     --                  --                     10     $ 3,447,538
</TABLE>


                                                                     (continued)





                                     III-13
<PAGE>   16



         (d)     Compensation of directors.  The standard arrangement by which
TCI's directors are compensated for all services (including any amounts payable
for committee participation or special assignments) as a director is as
follows: each director receives a fee of $500 plus travel expenses for
attendance at each meeting of the Board of Directors and each director who is
not a full-time employee of TCI receives additional compensation of $30,000 per
year.  In addition, the Company's stockholders approved an option plan for its
directors (the "Director Stock Option Plan").  Each person who becomes a
director of the Company and is not an employee of the Company or any of its
subsidiaries will be automatically granted options upon such person's becoming
a director.  The exercise price of each such subsequently granted option will
be equal to the fair market value of the Series A Stock on the date the option
is granted.  In general, such fair market value will be 95% of the last sale
price for the shares of the Series A Stock as reported on the Nasdaq Stock
Market on the date of the grant, with the price resulting from such percentage
rounded down to the nearest quarter dollar.

         The Company has a deferred compensation plan for all non-employee
directors.  Each director may elect to defer receipt of all, but not less than
all, of the annual compensation (excluding meeting fees and reimbursable
expenses) payable to the director for serving on the Company's Board of
Directors for each calendar year for which such deferral is elected.  An
election to defer may be made as to the compensation payable for a single
calendar year or period of years.  Any compensation deferred shall be credited
to the director's account on the last day of the quarter for which compensation
has accrued.  Such deferred compensation bears interest from the date credited
to the date of payment at a rate of 8% per annum in 1993 and 120% of the
applicable federal long-term rate thereafter, compounded annually.

         A director may elect payment of deferred compensation to be made at a
specified year in the future or upon termination of the director's service as
director of the Company.  Each director may elect payment in a lump sum, three
substantially equal consecutive annual installments or five substantially equal
consecutive annual installments.  In the event that a director dies prior to
payment of all the amounts payable pursuant to the plan, any amounts remaining
in the director's deferred compensation account, together with accrued interest
thereon, shall be paid to the director's designated beneficiary.

         There are no other arrangements whereby any of TCI's directors
received compensation for services as a director during 1996 in addition to or
in lieu of that specified by the aforedescribed standard arrangement.

         (e)     Employment Contracts and Termination of Employment and Change
of Control Arrangements.  Effective November 1, 1992 the employment agreement
between TCIC and Dr. Malone, as amended, was further amended and restated.
Pursuant to an Assignment and Assumption Agreement, dated August 4, 1994, the
payment, performance and other obligations of such employment agreements were
assumed by TCI.  The term of each agreement is extended daily so that the
remainder of the employment term shall at all times on and prior to the
effective date of the termination of employment as provided by each agreement
be five years.  Dr. Malone's employment agreement provides for an annual salary
of $800,000, subject to increase upon approval of the board of directors.
During 1996, Dr. Malone was given a salary increase such that his annual salary
in 1996 was $900,000.  Dr. Malone has elected to take a reduction in
compensation until certain financial goals are reached to the extent of 20% of
his compensation. Additionally, this employment agreement provide for personal
use of the Company's aircraft and flight crew, limited to an aggregate value of
$35,000 per year.

                                                                     (continued)





                                     III-14
<PAGE>   17



         Prior to Mr. Bob Magness' death, he was party to an employment
agreement with comparable provisions to the previously described employment
agreement for Dr. Malone.

         Dr. Malone's employment agreement provides, among other things, for
deferral of a portion (40% in 1993 and not in excess of 40% thereafter) of the
monthly compensation payable to him.  Pursuant to a letter agreement entered
into between Dr. Malone and the Company subsequent to the date of his
employment agreement, Dr. Malone deferred $150,000 in 1993 in lieu of 40% of
his compensation for such year.  The deferred amounts will be payable in
monthly installments over a 20-year period commencing on the termination of Dr.
Malone's employment, together with interest thereon at the rate of 8% per annum
compounded annually from the date of deferral to the date of payment.  The
amendment also provides for the payment of certain benefits, discussed below.

         Dr. Malone's agreement described above also provides that upon
termination of such executive's employment by the Company (other than for
cause, as defined in the agreement), or if Dr. Malone elects to terminate the
agreement because of a change in control of the Company, all remaining
compensation due under the agreement for the balance of the employment term
shall be immediately due and payable.

         Dr. Malone's agreement provides that during his employment with the
Company and for a period of two years following the effective date of his
termination of employment with the Company, unless termination results from a
change in control of the Company, he will not be connected with any entity in
any manner specified in the agreement, which competes in a material respect
with the business of the Company.  However, the agreement provides that such
executive may own securities of any corporation listed on a national securities
exchange or quoted in the Nasdaq Stock Market to the extent of an aggregate of
5% of the amount of such securities outstanding.

         Dr. Malone's agreement also provides that in the event of termination
of his employment with the Company, he will be entitled to receive 240
consecutive monthly payments of $15,000 (increased at the rate of 12% per annum
compounded annually from January 1, 1988 to the date payment commences), the
first of which will be payable on the first day of the month succeeding the
termination of Dr. Malone's employment.  In the event of Dr. Malone's death,
his beneficiaries will be entitled to receive the foregoing monthly payments.
The Company currently owns a whole-life insurance policy on Dr. Malone, the
face value of which is sufficient to meet its obligation under the salary
continuation arrangement.  The premiums payable by the Company on such
insurance policy are currently being funded through earnings on the policy.
Dr. Malone has no interest in this policy.

         The Company pays a portion of the annual premiums (equal to the
"PS-58" costs) on three whole-life insurance policies of which Dr. Malone is
the insured and trusts for the benefit of members of his family are the owners.
The Company is the designated beneficiary of the proceeds of such policies less
an amount equal to the greater of the cash surrender value thereof at the time
of Dr. Malone's death and the amount of the premiums paid by the policy owners.

         Dr. Malone deferred a portion of his monthly compensation under his
previous employment agreement.  Such deferred compensation (together with
interest thereon at the rate of 13% per annum compounded annually from the date
of deferral to the date of payment) will continue to be payable under the terms
of the previous agreement.  The rate at which interest accrues on such
previously deferred compensation was established in 1983 pursuant to such
earlier agreement.

                                                                     (continued)





                                     III-15
<PAGE>   18



         International and TCI have entered into an Amended and Restated
Employment Agreement with Mr. Vierra relating to Mr. Vierra's employment with
International as Vice Chairman and Chief Executive Officer, providing for a
base salary of $650,000 per year.  Mr. Vierra's salary is subject to annual
review by the board of directors, which may in its sole discretion increase his
salary.  Mr. Vierra's salary for 1996 is currently set at $650,00.  Mr.
Vierra's employment agreement provides for the deferral of a portion of each
monthly salary payment so as to result in the deferral of salary at the rate of
$250,000 per annum.  The deferred amounts are to be paid in monthly
installments over a 240-month period commencing on the later of December 31,
1998 and the termination of Mr. Vierra's full-time employment with
International, together with interest thereon at the rate of 8% per annum
compounded annually from the date of deferral to the payment date.  In the
event of Mr. Vierra's death, all outstanding deferred amounts will be paid in a
lump sum to his beneficiaries.

         While he is employed by International pursuant to his employment
agreement, Mr. Vierra is entitled to participate in all formal incentive
compensation plans, stock incentive plans, employee stock purchase plans,
retirement plans and insurance plans or policies adopted for the benefit of
TCI's or International's executive officers or employees generally.
Additionally, Mr. Vierra's employment agreement provides for personal use of
TCI's aircraft and flight crew, limited to an aggregate value of $35,000 per
year.

         Mr. Vierra's employment agreement has a stated termination date of
December 31, 1998.  It also provides that upon an earlier termination of Mr.
Vierra's employment by International without cause, all remaining compensation
due under such agreement for the balance of the employment term would become
immediately due and payable to Mr. Vierra.  Upon his death during the
employment term, International would pay to Mr. Vierra's beneficiaries a lump
sum in an amount equal to the lesser of (i) the compensation due under his
employment agreement for the balance of the employment term and (ii) one year's
salary.  In the event of his disability, International would continue to pay
Mr. Vierra his annual salary as and when it would have otherwise become due
until the first to occur of the end of the employment term or the date of his
death.

         Mr. Vierra's agreement further provides that during his employment
with International and for the longer of a period of two years following the
effective date of his termination of employment or if Mr. Vierra terminates his
employment before the end of the term of his employment in breach of the
employment agreement, or if Mr. Vierra is terminated "for cause" (as defined in
the employment agreement) by International, until December 31, 1998, he will
not be connected with any entity in any manner specified in the agreement,
which competes in a material respect with the business of International or any
of International's or TCI's majority owned subsidiaries. However, the agreement
provides that Mr. Vierra may own securities of any corporation listed on a
national securities exchange or quoted in the Nasdaq National Market to the
extent of an aggregate of 5% of the amount of such securities outstanding. 
Under the employment agreement, substantially all of Mr. Vierra's business
time, attention and efforts will be devoted to the affairs of International.

         The Company and Mr. Romrell entered into an employment agreement on
January 1, 1993.  Pursuant to an Assignment and Assumption Agreement, dated
August 4, 1994, the payment, performance and other obligations of such
employment agreement was assumed by TCI.  The term of Mr. Romrell's agreement
extends through December 31, 1999.  Mr. Romrell's employment agreement provides
for a base salary of $350,000 per year to be increased by the amount of $25,000
per annum in each succeeding year commencing January 1, 1994.  Mr. Romrell's
salary is subject to annual review by the board of directors which may in its
sole discretion increase his salary.  Mr. Romrell's salary for 1996 is
currently set at $500,000.

                                                                     (continued)





                                     III-16
<PAGE>   19



         While he is employed by the Company pursuant to his employment
agreement, Mr. Romrell is entitled to participate in all formal incentive
compensation plans, stock incentive plans, employee stock purchase plans,
retirement plans and insurance plans or policies adopted for the benefit of
TCI's executive officers or employees generally.

         Mr. Romrell's employment agreement also provides that upon an earlier
termination of Mr. Romrell's employment by the Company without cause, all
remaining compensation due under such agreement for the balance of the
employment term would become immediately due and payable to Mr. Romrell.  Upon
his death during the employment term, the Company would pay to Mr. Romrell's
beneficiaries a lump sum in an amount equal to the lesser of (i) the
compensation due under his employment agreement for the balance of the
employment term and (ii) one year's salary.  In the event of his disability,
the Company would continue to pay Mr. Romrell his annual salary as and when it
would have otherwise become due until the first to occur of the end of the
employment term or the date of his death.

         Mr. Romrell's agreement further provides that during his employment
with the Company and for the longer of a period of two years following the
effective date of his termination of employment or if Mr. Romrell terminates
his employment before the end of the term of his employment in breach of the
employment agreement, or if Mr. Romrell is terminated "for cause" (as defined
in the employment agreement) by the Company, until December 31, 1999, he will
not be connected with any entity in any manner specified in the agreement,
which competes in a material respect with the business of TCI or TCI's majority
owned subsidiaries.  However, the agreement provides that Mr. Romrell may own
securities of any corporation listed on a national securities exchange or
quoted in the Nasdaq National Market to the extent of an aggregate of 5% of the
amount of such securities outstanding.  Under the employment agreement,
substantially all of Mr. Romrell's business time, attention and efforts will be
devoted to the affairs of the Company.

         (f)     Additional information with respect to Compensation Committee
Interlocks and Insider Participation in Compensation Decisions.

         The members of the Company's compensation committee are Messrs. Robert
A. Naify, John W. Gallivan and Paul A.  Gould, all directors of the Company.
None of the members of the compensation committee are or were officers of the
Company or any of its subsidiaries.


                                                                     (continued)





                                     III-17
<PAGE>   20



Item 12.         Security Ownership of Certain Beneficial Owners and
                 Management.

         (a)     Security ownership of certain beneficial owners.  The
following table sets forth, as of March 1, 1997, information with respect to
the ownership of TCI Group Series A Stock, TCI Group Series B Stock, Liberty
Group Series A Stock, Liberty Group Series B Stock, TCI Group Class B 6%
Cumulative Redeemable Exchangeable Junior Preferred Stock ("Class B Preferred
Stock"), Convertible Preferred Stock, Series C ("Series C Preferred Stock"),
Redeemable Convertible TCI Group Preferred Stock, Series G ("Series G Preferred
Stock") and Redeemable Convertible Liberty Media Group Preferred Stock, Series
H ("Series H Preferred Stock") by each person known to the Company to own
beneficially more than 5% of any such class outstanding on that date.  Shares
issuable upon exercise or conversion of convertible securities are deemed to be
outstanding for the purpose of computing the percentage of ownership and
overall voting power of persons beneficially owning such convertible
securities, but have not been deemed to be outstanding for the purpose of
computing the percentage ownership or overall voting power of any other person.
Voting power in the table is computed with respect to a general election of
directors and, therefore, the TCI Class B Preferred Stock, the Series G
Preferred Stock and the Series H Preferred Stock are included in the
calculation.  The number of shares of Dr. Malone includes interests of such
individual in shares held by the trustee of TCI's ESPP.  So far as is known to
TCI, the persons indicated below have sole voting and investment power with
respect to the shares indicated as owned by them except as otherwise stated in
the notes to the table and except for the shares held by the trustee of the
ESPP for the benefit of Dr. Malone, which shares are voted at the discretion of
the trustee.

<TABLE>
<CAPTION>
                                                            Amount and
       Title                                                 Nature of
        of                 Name and Address                 Beneficial            Percent         Voting
       Class             of Beneficial Owner                 Ownership          of Class(1)      Power (1) 
       -----             -------------------                ----------          -----------      ----------
<S>                  <C>                                 <C>                       <C>          <C>
Series A             Donne F. Fisher, Director,           4,110,681(2)(3)               *          20.8%
Series B                individually and as              31,034,936(2)                36.7%
Liberty Series A        personal co-represent-            5,423,725(2)(3)              2.4%
Liberty Series B        ative to the Estate of            7,758,734(2)                36.6%
Class B Pref.           Bob Magness                         129,299(2)                 8.0%
Series C Pref.       5619 DTC Parkway                           --                      --
Series G Pref.       Englewood, Colorado                        --                      --
Series H Pref.                                                  --                      --

Series A             Daniel Ritchie, as personal          3,524,315(2)                  *          20.6%
Series B                co-representative of the         30,785,864(2)                36.4%
Liberty Series A        Estate of Bob Magness             5,169,304(2)                 2.3%
Liberty Series B     2199 South University                7,696,466(2)                36.3%
Class B Pref         Denver, Colorado                       125,000(2)                 7.7%
Series C. Pref                                                   --                     --
Series G Pref.                                                   --                     --
Series H Pref.                                                   --                     --

Series A             John C. Malone, Chief                2,173,166(4)                  *          16.9%
Series B                Executive Officer and            25,287,083(5)(6)             29.9%
Liberty Series A        a Director                        3,929,331(4)(5)              1.7%
Liberty Series B     5619 DTC Parkway                     6,349,270(5)(6)             30.0%
Class B Pref.        Englewood, Colorado                    306,000(5)                18.9%
Series C Pref.                                                   --                     --
Series G Pref.                                                   --                     --
Series H Pref.                                                   --                     --
</TABLE>

                                                                     (continued)





                                     III-18
<PAGE>   21




<TABLE>
<CAPTION>
                                                          Amount and
       Title                                              Nature of
        of              Name and Address                  Beneficial           Percent        Voting
       Class            of Beneficial Owner               Ownership         of Class(1)     Power(1) 
       -----            -------------------               ----------         -----------     ---------
<S>                  <C>                                  <C>                   <C>           <C>
Series A             Kearns-Tribune Corporation           8,792,514               1.5%         6.7%
Series B             400 Tribune Building                 9,112,500(6)           10.8%
Liberty Series A     Salt Lake City, Utah                 4,436,254               1.9%
Liberty Series B                                          2,278,125(6)            0.8%
Class B Pref                                                 67,536               4.2%
Series C. Pref                                                   --                --
Series G Pref.                                                   --                --
Series H Pref.                                                   --                --

Series A             Kim Magness, Director,               2,155,332(7)(8)          *           4.7%
Series B                individually and as               6,864,212(7)            8.1%
Liberty Series A        personal representative           1,666,275(7)(8)          *
Liberty Series B        of the Estate of                  1,716,053(7)            8.1%
Class B Pref            Betsy Magness                            --                --
Series C. Pref       5619 DTC Parkway                            --                --
Series G Pref.       Englewood, Colorado                         --                --
Series H Pref.                                                   --                --


Series A             The Associated Group, Inc.          12,479,976               2.1%         5.8%
Series B             200 Gateway Towers                   7,071,852               8.4%
Liberty Series A     Pittsburgh, Pennsylvania             9,102,436               4.0%
Liberty Series B                                          1,767,963               8.3%
Class B Pref.                                                    --                --
Series C Pref.                                                   --                --
Series G Pref.                                                   --                --
Series H Pref.                                                   --                --

Series A             The Equitable Companies             32,824,784(9)            5.5%         2.9%
Series B                Incorporated                             --                --
Liberty Series A     787 Seventh Avenue                  23,303,041(10)           0.2%
Liberty Series B     New York, New York; and                     --                --
Class B Pref.        The Mutuelles AXA and AXA                   --                --
Series C Pref.       101-100 Terrasse Boieldieu                  --                --
Series G Pref.       92042 Paris La Defense                      --                --
Series H Pref.       France                                      --                --

Series A             The Capital Group                   34,799,410(11)           5.8%         3.3%
Series B                Companies, Inc.                          --                --
Liberty Series A     333 South Hope Street               28,902,435(12)           2.6%
Liberty Series B     Los Angeles, California                     --                --
Class B Pref.                                                    --                --
Series C Pref.                                                   --                --
Series G Pref.                                                   --                --
Series H Pref.                                                   --                --

Series A             J.P. Morgan & Co.                   43,044,027(13)           7.2%         2.3%
Series B                Incorporated                            --                 --
Liberty Series A     60 Wall Street                             --                 --
Liberty Series B     New York, New York                         --                 --
Class B Pref.                                                   --                 --
Series C Pref.                                                  --                 --
Series G Pref.                                                  --                 --
Series H Pref.                                                  --                 --
</TABLE>

                                                                     (continued)





                                     III-19
<PAGE>   22




<TABLE>
<CAPTION>
                                                             Amount and   
    Title                                                    Nature of    
     of                Name and Address                      Beneficial              Percent        Voting
    Class             of Beneficial Owner                     Ownership            of Class(1)     Power(1) 
    -----             -------------------                    ----------            -----------     ---------
<S>                  <C>                                  <C>                     <C>                <C>
Series A             Oppenheimer Capital                  41,545,872(15)              7.0%           2.2%
Series B             200 Liberty Street                           --                   --   
Liberty Series A     New York, New York                           --                   --   
Liberty Series B                                                  --                   --   
Class B Pref.                                                     --                   --   
Series C Pref.                                                    --                   --   
Series G Pref.                                                    --                   --   
Series H Pref.                                                    --                   --   

Series A             Bill Daniels                                259(14)               *              *
Series B             c/o Daniels & Associates                     --                   --
Liberty Series A     3200 Cherry Creek Drive                      96(14)               *
Liberty Series B        South                                     --                   --
Class B Pref.        Denver, Colorado                             --                   --
Series C Pref.                                                70,575                 00.0%
Series G Pref.                                                    --                   --
Series H Pref.                                                    --                   --

Series A             Lawrence Flinn Jr.                    1,102,344(14)               *              *
Series B             209 Taconic Road                         24,000(14)               *
Liberty Series A     Greenwich, Connecticut                  416,416(14)               *
Liberty Series B                                               6,000(14)               *
Class B Pref.                                                     --                   --
Series C Pref.                                                    --                   --
Series G Pref.                                             6,186,647(14)             92.4%
Series H Pref.                                             6,186,647(14)             92.4%
</TABLE>

____________________
*  Less than one percent.

(1)      Based on 598,055,198 shares of TCI Group Series A Stock (after
         elimination of shares held by subsidiaries of TCI), 84,647,065 shares
         of TCI Group Series B Stock, 228,721,426 shares of Liberty Group
         Series A Stock, 21,187,969 shares of Liberty Group Series B Stock,
         1,620,026 shares of Class B Preferred Stock (after elimination of
         shares held by subsidiaries of TCI), 70,575 shares of Series C
         Preferred Stock, 6,693,177 shares of Series G Preferred Stock and
         6,693,177 shares of Series H Preferred Stock outstanding on March 1,
         1997.
                                                                     (continued)





                                     III-20
<PAGE>   23



(2)      Messrs. Fisher and Ritchie, as co-personal representatives of the
         Estate of Bob Magness, are each deemed the beneficial owner of all
         shares of TCI Group Series A Stock, TCI Group Series B Stock, Liberty
         Group Series A Stock Liberty Group Series B Stock and Class B
         Preferred Stock held of record by the Estate of Bob Magness.  The
         number of shares held by Messrs. Fisher and Ritchie each includes
         1,524,315 shares of TCI Group Series A, 30,785,864 shares of TCI Group
         Series B, 4,419,304 shares of Liberty Group Series A, 7,696,466 shares
         of Liberty Group Series B and 125,000 shares of Class B Preferred
         Stock of which each Mr. Fisher and Mr. Ritchie are deemed beneficial
         owner as co-personal representative.  Additionally, assumes the
         exercise in full by the Estate of Bob Magness of  stock options
         granted in tandem with stock appreciation rights to Mr. Bob Magness in
         November of 1992 to acquire 1,000,000 shares of TCI Group Series A
         Stock and 375,000 shares of Liberty Group Series A Stock.
         Additionally assumes the exercise in full by the Estate of Bob Magness
         of stock options granted in tandem with stock appreciation rights to
         Mr. Bob Magness in December of 1995 to acquire 1,000,000 shares of
         Series A Stock and 375,000 shares of Liberty Series A Stock.  All such
         options are currently exercisable.

(3)      Assumes the exercise in full of stock options granted in tandem with
         stock appreciation rights to Mr. Fisher in November of 1994 to acquire
         200,000 shares of TCI Group Series A Stock and 75,000 shares Liberty
         Group Series A Stock.  Options to acquire 80,000 shares of TCI Group
         Series A Stock and 30,000 shares of Liberty Group Series A Stock are
         currently exercisable.  Additionally assumes the exercise in full of
         options granted to Mr. Fisher in January 1996, pursuant to the
         Director Stock Option Plan, to acquire 50,000 shares of TCI Group
         Series A Stock and 18,750 shares of Liberty Group Series A Stock.
         Options to acquire 10,000 shares of Series A Stock and 3,750 shares of
         Liberty Series A Stock are currently exercisable.

(4)      Assumes the exercise in full of stock options granted in tandem with
         stock appreciation rights in November of 1992 to acquire 1,000,000
         shares of TCI Group Series A Stock and 375,000 shares of Liberty Group
         Series A Stock.  Options to acquire 800,000 and 300,000 shares of TCI
         Group Series A Stock and Liberty Group Series A Stock, respectively,
         are currently exercisable.  Additionally assumes the exercise in full
         of stock options granted in tandem with stock appreciation rights in
         December of 1995 to acquire 1,000,000 shares of TCI Group Series A
         Stock and 375,000 shares of Liberty Group Series A Stock.  Options to
         acquire 200,000 shares of TCI Group Series A Stock and 75,000 shares
         of Liberty Group Series A Stock are currently exercisable.

(5)      Includes 1,173,000 shares of TCI Group Series B Stock, 146,625 shares
         of Liberty Group Series A Stock, 293,250 shares of Liberty Group
         Series B Stock and 6,900 shares of Class B Preferred Stock held by Dr.
         Malone's wife, Mrs. Leslie Malone, but Dr. Malone has disclaimed any
         beneficial ownership of such shares.

(6)      Pursuant to a letter agreement, dated June 17, 1988, the late Mr. Bob
         Magness and Kearns each agreed with Dr.  Malone that prior to making a
         disposition of a significant portion of their respective holdings of
         TCI Group Series B Stock or Liberty Group Series B Stock, he or it
         would first offer Dr. Malone the opportunity to purchase such shares.

                                                                     (continued)





                                     III-21
<PAGE>   24



(7)      Mr. Kim Magness, as executor of the Estate of Betsy Magness, is the
         beneficial owner of all shares of TCI Group Series A Stock, TCI Group
         Series B Stock, Liberty Group Series A Stock and  Liberty Group Series
         B Stock held of record by the Estate of Betsy Magness.  The number of
         shares held by Mr. Kim Magness includes 2,105,332 shares of TCI Group
         Series A Stock, 6,346,212 shares of TCI Group Series B Stock,
         1,582,775 shares of Liberty Group Series A Stock and 1,586,553 shares
         of Liberty Group Series B Stock of which Mr. Magness is beneficial
         owner as executor.

(8)      Assumes the exercise in full of options granted to Mr. Kim Magness in
         November, 1994, pursuant to the Director Stock Option Plan, to acquire
         50,000 shares of TCI Group Series A Stock and 18,750 shares of Liberty
         Group Series A Stock.  Options to acquire 20,000 shares of TCI Group
         Series A Stock and 7,500 shares of Liberty Group Series A Stock are
         currently exercisable.

(9)      The number of shares in the table is based upon a Schedule 13G, dated
         February 12, 1997, filed by The Equitable Companies Incorporated which
         Schedule 13G reflects that said corporation has sole voting power over
         27,983,325 shares and shared voting power over 986,125 shares of TCI
         Group Series A Stock.  No information is given with respect to voting
         power over the remaining shares.

(10)     The number of shares in the table is based upon a Schedule 13G, dated
         February 12, 1997, filed by the Equitable Companies Incorporated which
         Schedule 13G reflects that said corporation has sole voting power over
         17,960,232 shares and shared voting power over 515,709 shares of
         Liberty Group Series A Stock, each as adjusted for the Liberty Group
         Stock Dividend.  No information is given with respect to voting power
         over the remaining shares.

(11)     The number of shares in the table is based upon a Schedule 13G, dated
         February 14, 1997, filed by The Capital Group Companies, Inc.  The
         Capital Group Companies, Inc. is the parent holding company of a group
         of investment management companies that hold investment power and, in
         some cases, voting power over the securities reported in the Schedule
         13G.  The investment management companies, which include a bank and
         several investment advisors provide investment advisory and management
         services for their respective clients which include registered
         investment companies and institutional accounts.  The Capital Group
         Companies, Inc. does not have investment power or voting power over
         any of the securities reported herein; however, The Capital Group
         Companies, Inc., may be deemed to beneficially own such securities.
         Capital Research and Management Company, an investment adviser and
         wholly owned subsidiary of The Capital Group Companies, Inc., is the
         beneficial owner of 29,960,700 shares as a result of acting as
         investment adviser to various investment companies.  The remaining
         shares reported as being beneficially owned by The Capital Group
         Companies, Inc. are beneficially owned by other subsidiaries of The
         Capital Group Companies, Inc. none of which by itself owns 5% or more
         of the outstanding securities.
                                                                     (continued)





                                     III-22
<PAGE>   25



(12)     The number of shares in the table is based upon a Schedule 13G, dated
         February 14, 1997, filed by The Capital Group Companies, Inc.  The
         Capital Group Companies, Inc. is the parent holding company of a group
         of investment management companies that hold investment power and, in
         some cases, voting power over the securities reported in the Schedule
         13G.  The investment management companies, which include a bank and
         several investment advisors provide investment advisory and management
         services for their respective clients which include registered
         investment companies and institutional accounts.  The Capital Group
         Companies, Inc. does not have investment power or voting power over
         any of the securities reported herein; however, The Capital Group
         Companies, Inc., may be deemed to beneficially own such securities.
         Capital Research and Management Company, an investment adviser and
         wholly owned subsidiary of The Capital Group Companies, Inc., is the
         beneficial owner of 22,612,005 shares as a result of acting as
         investment adviser to various investment companies.  The remaining
         shares reported as being beneficially owned by The Capital Group
         Companies, Inc. are beneficially owned by other subsidiaries of The
         Capital Group Companies, Inc. none of which by itself owns 5% or more
         of the outstanding securities.

(13)     The number of shares in the table is based upon a Schedule 13G, dated
         as of December 31, 1996, filed by J.P.  Morgan & Co. Incorporated
         which Schedule 13G reflects that said corporation has sole voting
         power over 28,128,668 shares and shared voting power over 525,866
         shares of TCI Group Series A Stock.  No information is given with
         respect to the voting power over the remaining shares.

(14)     Based upon the Company's review of the record of shareholders provided
         by the Company's transfer agent, The Bank of New York.

(15)     Based upon disclosure made by Oppenheimer Capital to the Company.

         (b)     Security ownership of management.  The following table sets
forth, as of March 1, 1997, information with respect to the ownership of TCI
equity securities (TCI Group Series A Stock, TCI Group Series B Stock, Liberty
Group Series A Stock, Liberty Group Series B Stock (other than directors'
qualifying shares), Class B Preferred Stock, Series C Preferred Stock, Series G
Preferred Stock and Series H Preferred Stock), TCIC voting securities (Class A
common stock ("Class A Stock"), Class B common stock ("Class B Stock"), and
Cumulative Exchangeable Preferred Stock, Series A ("Series A Preferred Stock"))
and International voting securities (Series A Tele-Communications
International, Inc.  common stock ("TINTA Series A Stock") and Series B
Tele-Communications International, Inc. common stock ("TINTA Series B Stock"))
by all directors and each of the named executive officers of TCI and by all
executive officers and directors of TCI as a group.  Shares issuable upon
exercise or conversion of convertible securities and upon vesting of restricted
shares are deemed to be outstanding for the purpose of computing the percentage
ownership and overall voting power of persons beneficially owning such
securities, but have not been deemed to be outstanding for the purpose of
computing the percentage ownership or overall voting power of any other person.
Voting power in the table is computed with respect to a general election of
directors.  The number of TCI Group Series A Stock, TCI Group Series B Stock,
Liberty Group Series A Stock and Liberty Group Series B Stock in the table
include interests of the named directors or executive officers or of members of
the group of directors and executive officers in shares held by the trustee of
TCI's ESPP and shares held by the trustee of UAE's Employee Stock Ownership
Plan for their respective accounts.  So far as is known to TCI, the persons
indicated below have sole voting and investment power with respect to the
shares indicated as owned by them except as otherwise stated in the notes to
the table and except for the shares held by the trustee of TCI's ESPP for the
benefit of such person, which shares are voted at the discretion of the
trustee.
                                                                     (continued)





                                     III-23
<PAGE>   26




<TABLE>
<CAPTION>
                                                                                    Percent       Voting
                               Name of                  Amount and Nature           of Class      Power
 Title of Class           Beneficial Owner           of Beneficial Ownership       (1)(2)(3)     (1)(2)(3)
 --------------           ----------------           -----------------------       ---------     ---------
<S>                       <C>                       <C>           <C>                 <C>          <C>
TCI Group Series A        Donne F. Fisher,           4,110,681(4)                       *           20.8%
TCI Group Series B           individually and       31,034,936(4)                     36.7%
Liberty Series A             as co-personal          5,423,725(4)                      2.4%
Liberty Series B             representative of       7,758,734(4)                     36.6%
Class B Pref.                the Estate of             129,299(4)                      8.0%
Series C Pref.               Bob Magness                    --                          --
Series G Pref.                                              --                          --
Series H Pref.                                              --                          --
TINTA Series A                                         450,000                          *             *
TINTA Series B                                              --                          --
Class A                                                     --                          --            --
Class B                                                     --                          --
Series A Pref.                                              --                          --

TCI Group Series A        John C. Malone               2,173,166(5)                     *           16.9%
TCI Group Series B                                    25,287,083(5)                   29.9%
Liberty Series A                                       3,929,331(5)                    1.7%
Liberty Series B                                       6,349,270(5)                   30.0%
Class B Pref.                                            306,000(5)                   18.9%
Series C Pref.                                                --                        --
Series G Pref.                                                --                        --
Series H Pref.                                                --                        --
TINTA Series A                                            50,000(14)                    *             *
TINTA Series B                                                --                        --
Class A                                                       --                        --            --
Class B                                                       --                        --
Series A Pref.                                                --                        --

TCI Group Series A        Kim Magness,                 2,155,332(6)                     *            4.7%
TCI Group Series B           individually and as       6,864,212(6)                    8.1%
Liberty Series A             personal represent-       1,666,275(6)                     *
Liberty Series B             ative of the Estate       1,716,053(6)                    8.1%
Class B Pref.                of Betsy Magness                 --                        --
Series C Pref.                                                --                        --
Series G Pref.                                                --                        --
Series H Pref.                                                --                        --
TINTA Series A                                             2,000                        *             *
TINTA Series B                                                --                        --
Class A                                                       --                        --            --
Class B                                                       --                        --
Series A Pref.                                                --                        --
                                                                        
TCI Group Series A        John W. Gallivan                52,124(7)(8)                  *             *
TCI Group Series B                                            --                        --
Liberty Series A                                          19,546(7)(8)                  *
Liberty Series B                                              --                        --
Class B Pref.                                                 14(7)                     *
Series C Pref.                                                --                        --
Series G Pref.                                                --                        --
Series H Pref.                                                --                        --
TINTA Series A                                                --                        --            --
TINTA Series B                                                --                        --
Class A                                                       --                        --            --
Class B                                                       --                        --
Series A Pref.                                                --                        --
</TABLE>

                                                                     (continued)





                                     III-24
<PAGE>   27




<TABLE>
<CAPTION>
                                                                                    Percent       Voting
                               Name of                  Amount and Nature           of Class      Power
 Title of Class           Beneficial Owner           of Beneficial Ownership       (1)(2)(3)     (1)(2)(3)
 --------------           ----------------           -----------------------       ---------     ---------
<S>                       <C>                        <C>                            <C>           <C>
TCI Group Series A        Jerome H. Kern             2,050,000(9)                       *            *
TCI Group Series B                                          --                          --
Liberty Series A                                       768,750(9)                       *
Liberty Series B                                            --                          -- 
Class B Pref.                                               --                          -- 
Series C Pref.                                              --                          -- 
Series G Pref.                                              --                          -- 
Series H Pref.                                              --                          -- 
TINTA Series A                                          50,000(14)                      *            *
TINTA Series B                                              --                          -- 
Class A                                                     --                          --           --
Class B                                                     --                          -- 
Series A Pref.                                              --                          -- 

TCI Group Series A        Tony Coehlo                  152,800(10)                      *            *
TCI Group Series B                                          --                          --
Liberty Series A                                        19,050(10)                      * 
Liberty Series B                                            --                          --
Class B Pref.                                               --                          --
Series C Pref.                                              --                          --
Series G Pref.                                              --                          --
Series H Pref.                                              --                          --
TINTA Series A                                           1,000                          *            *
TINTA Series B                                              --                          --
Class A                                                     --                          --           --
Class B                                                     --                          --
Series A Pref.                                              --                          --

TCI Group Series A        Robert A. Naify           23,688,859(11)                     3.8%         1.7%
TCI Group Series B                                          --                          --
Liberty Series A                                     8,883,287(11)                     3.7%
Liberty Series B                                            --                          --
Class B Pref.                                            1,000                          *  
Series C Pref.                                              --                          -- 
Series G Pref.                                              --                          -- 
Series H Pref.                                              --                          -- 
TINTA Series A                                              --                          --           --
TINTA Series B                                              --                          -- 
Class A                                                     --                          --           --
Class B                                                     --                          -- 
Series A Pref.                                              --                          -- 
</TABLE>

                                                                     (continued)





                                     III-25
<PAGE>   28




<TABLE>
<CAPTION>
                                                                                    Percent       Voting
                               Name of                  Amount and Nature           of Class      Power
 Title of Class           Beneficial Owner           of Beneficial Ownership       (1)(2)(3)     (1)(2)(3)
 --------------           ----------------           -----------------------       ---------     ---------
<S>                       <C>                            <C>                        <C>            <C>
TCI Group Series A        J. C. Sparkman                   279,472(12)               *              *
TCI Group Series B                                             --                    --
Liberty Series A                                           112,001(12)               *
Liberty Series B                                               --                    --
Class B Pref.                                                  --                    --
Series C. Pref                                                 --                    --
Series G Pref.                                                 --                    --
Series H Pref.                                                 --                    --
TINTA Series A                                                 --                    --             --
TINTA Series B                                                 --                    --
Class A                                                        --                    --             --
Class B                                                        --                    --
Series A Pref.                                                 --                    --

TCI Group Series A        Paul A. Gould                    127,330(13)               *              *
TCI Group Series B                                         243,824                   *
Liberty Series A                                           102,538(13)               *
Liberty Series B                                            39,081                   *
Class B Pref.                                               19,558                  1.2%
Series C Pref.                                                 --                    --
Series G Pref.                                                 --                    --
Series H Pref.                                                 --                    --
TINTA Series A                                              95,000(14)               *              *
TINTA Series B                                                 --                    --
Class A                                                        --                    --             --
Class B                                                        --                    --             
Series A Pref.                                                 --                    --

TCI Group Series A        Leo J. Hindery, Jr.            1,000,000(15)               *              *
TCI Group Series B                                             --                    --
Liberty Series A                                           250,000(15)               *
Liberty Series B                                               --                    --
Class B Pref.                                                  --                    --
Series C Pref.                                                 --                    --
Series G Pref.                                                 --                    --
Series H Pref.                                                 --                    --
TINTA Series A                                              50,000(15)               *              *
TINTA Series B                                                 --                    --
Class A                                                        --                    --             --
Class B                                                        --                    --
Series A Pref.                                                 --                    --

TCI Group Series A        Fred A. Vierra                   581,474(16)               *              *
TCI Group Series B                                             --                    --
Liberty Series A                                           211,889(16)               *
Liberty Series B                                               --                    --
Class B Pref.                                                  200                   *
Series C Pref.                                                 --                    --
Series G Pref.                                                 --                    --
Series H Pref.                                                 --                    --
TINTA Series A                                             446,000(17)               *              *
TINTA Series B                                                 --                    --
Class A                                                        --                    --             --
Class B                                                        --                    --
Series A Pref.                                                 --                    --
</TABLE>


                                                                     (continued)





                                     III-26
<PAGE>   29




<TABLE>
<CAPTION>
                                                                                          Percent       Voting
                               Name of                  Amount and Nature                 of Class      Power
 Title of Class           Beneficial Owner           of Beneficial Ownership              (1)(2)(3)     (1)(2)(3)
 --------------           ----------------           -----------------------              ---------     ---------
<S>                       <C>                   <C>                                          <C>          <C>     
TCI Group Series A        Brendan R. Clouston            1,986,498(18)                        *             *     
TCI Group Series B                                             230                            *                   
Liberty Series A                                           332,463(18)                        *                   
Liberty Series B                                                57                            *                   
Class B Pref.                                                   --                            --                  
Series C Pref.                                                  --                            --                  
Series G Pref.                                                  --                            --                  
Series H Pref.                                                  --                            --                  
TINTA Series A                                                  --                            --            --    
TINTA Series B                                                  --                            --                  
Class A                                                         --                            --            --    
Class B                                                         --                            --                  
Series A Pref.                                                  --                            --                  
                                                                                                                  
TCI Group Series A        Peter R. Barton                  352,566(19)                        *             *     
TCI Group Series B                                              42                            *                   
Liberty Series A                                         1,615,221(19)(20)                    *                   
Liberty Series B                                                10                            *                   
Class B Pref.                                                1,374                            *                   
Series C Pref.                                                  --                            --                  
Series G Pref.                                                  --                            --                  
Series H Pref.                                                  --                            --                  
TINTA Series A                                               1,000                            *             *     
TINTA Series B                                                  --                            --                  
Class A                                                         --                            --            --    
Class B                                                         --                            --                  
Series A Pref.                                                  --                            --                  
                                                                                                                  
TCI Group Series A        Larry E. Romrell                 773,529(21)                        *             *     
TCI Group Series B                                             588                            *                   
Liberty Series A                                           293,884(21)                        *                   
Liberty Series B                                               147                            *                   
Class B Pref.                                                   --                            --                  
Series C Pref.                                                  --                            --                  
Series G Pref.                                                  --                            --                  
Series H Pref.                                                  --                            --                  
TINTA Series A                                                  --                            --            --    
TINTA Series B                                                  --                            --                  
Class A                                                         --                            --            --    
Class B                                                         --                            --                  
Series A Pref.                                                  --                            --                   
                                                                                                                  
TCI Group Series A        All directors and             42,264,117(4)(5)(6)(7)(8)(11)(22)    6.7%         43.9%   
TCI Group Series B        executive officers            63,435,631(4)(5)(6)(8)              74.9%                 
Liberty Series A          as a group                    24,479,261(4)(5)(6)(7)(8)(11)(22)   10.1%                 
Liberty Series B          (20 persons)                  15,864,531(4)(5)(6)(8)              74.9%                 
Class B Pref.                                              459,277(4)(5)(7)                 28.4%                 
Series C Pref.                                                 --                             --                  
Series G Pref.                                                 --                             --                  
Series H Pref.                                                 --                             --                  
TINTA Series A                                          1,252,200(23)                        1.2%           *     
TINTA Series B                                                 --                             --                  
Class A                                                        --                             --            --    
Class B                                                        --                             --                  
Series A Pref.                                                 --                             --                  
</TABLE>      

    _________________________
                                                                     (continued)





                                     III-27
<PAGE>   30


*  Less than one percent.

(1)      See note 1 to the table in Item 12(a).

(2)      Based on 106,740,873 shares of TINTA Series A Stock and 11,700,000
         shares of TINTA Series B Stock outstanding on March 1, 1997.

(3)      Based on 811,655 shares of Class A Stock, 94,447 shares of Class B
         Stock and 4,600,000 shares of Series A Preferred Stock outstanding on
         March 1, 1997.

(4)      See notes (2) and (3) to the table in Item 12(a).

(5)      See notes (4) through (6) to the table in Item 12(a).

(6)      See notes (7) and (8) to the table in Item 12(a).

(7)      Includes 1,524 shares of TCI Group Series A Stock, 571 shares of
         Liberty Group Series A Stock and 14 Shares of Class B Preferred Stock
         held by Mr.  Gallivan's wife.  Also, assumes the exercise in full of
         options granted, pursuant to the Director Stock Option Plan, to 
         acquire 50,000 shares of TCI Group Series A Stock and 18,750 shares of
         Liberty Group Series A Stock. Options to acquire 20,000 shares of TCI 
         Group Series A Stock and 7,500 shares of Liberty Group Series A Stock
         are currently exercisable.

(8)      The number of shares in the table does not include any shares held by
         Kearns, of which Mr. Gallivan is an officer.

(9)      Assumes the exercise in full of stock options granted in tandem with
         stock appreciation rights to acquire 1,500,000 shares of TCI Group
         Series A Stock and 562,500 shares of Liberty Group Series A Stock.
         Options to acquire 1,100,000 shares and 412,500 shares of TCI Group
         Series A Stock and Liberty Group Series A Stock, respectively, are
         currently exercisable and the remainder vest and become exercisable
         evenly over one year.  The options expire on November 12, 1998.
         Additionally, assumes the exercise in full of stock options granted in
         tandem with stock appreciation rights to acquire 500,000 shares of TCI
         Group Series A Stock and 187,500 shares of Liberty Group Series A
         Stock.  Options to acquire 100,000 shares of TCI Group Series A Stock
         and 37,500 shares of Liberty Group Series A Stock are currently
         exercisable.  Also assumes the exercise in full of stock options
         granted in November 1994, pursuant to the Director Stock Option Plan,
         to acquire 50,000 shares of TCI Group Series A Stock and 18,750 shares
         of Liberty Group Series A Stock.  Options to acquire 20,000 shares of
         TCI Group Series A Stock and 7,500 shares of Liberty Group Series A
         Stock are currently exercisable.

(10)     Assumes the exercise in full of stock options granted to acquire
         50,000 shares of TCI Group Series A Stock and 18,750 shares of Liberty
         Group Series A Stock.  Options to acquire 20,000 shares of TCI Group
         Series A Stock and 7,500 shares of Liberty Group Series A Stock are
         currently exercisable.  Additionally assumes the exercise in full of
         stock options granted in tandem with stock appreciation rights granted
         to acquire 100,000 shares of TCI Group Series A Stock.  Options to
         acquire 20,000 shares of TCI Group Series A Stock are currently
         exercisable.

                                                                     (continued)





                                     III-28
<PAGE>   31



(11)     Mr. Robert Naify received notes, which are currently convertible into
         22,446,926 shares of TCI Group Series A Stock and 8,417,597 shares of
         Liberty Group Series A Stock, as partial consideration for the sale to
         TCI of the stock owned by him in UACI.  Mr. Naify is also a
         co-trustee, along with Mr. Naify's brother, Marshall, and their
         sister, of a trust for the benefit of Marshall which holds additional
         notes convertible into 341,606 shares of TCI Group Series A Stock and
         128,102 shares of Liberty Group Series A Stock.  The number of shares
         indicated as held by Mr. Naify assumes the conversion of these notes.
         Also, assumes the exercise in full of options granted on November
         1994, pursuant to the Director Stock Option Plan, to acquire 50,000
         shares of TCI Group Series A Stock and 18,750 shares of Liberty Group
         Series A Stock.  Options to acquire 20,000 shares of TCI Group Series
         A Stock and 7,500 shares of Liberty Group Series A Stock are currently
         exercisable.

(12)     Assumes the exercise in full of options granted in tandem with stock
         appreciation rights to acquire 100,000 shares of TCI Group Series A
         Stock and 37,500 shares of Liberty Group  Series A Stock. All such
         options are currently exercisable.  Also assumes the exercise in full
         of options granted in December 1996, pursuant to the Director Stock
         Option Plan, to acquire 50,000 shares of TCI Group Series A Stock and
         18,750 shares of Liberty Group Series A Stock.  None of these options
         are exercisable until December 13, 1997.

(13)     Assumes the exercise in full of options granted in December 1996,
         pursuant to the Director Stock Option Plan, to acquire 50,000 shares
         of TCI Group Series A Stock and 18,750 shares of Liberty Group Series
         A Stock.  None of these options are exercisable until December 13,
         1997.

(14)     Assumes the exercise in full of options granted in April, 1996,
         pursuant to an International option plan for its directors who are not
         employees, to acquire 50,000 shares of TINTA Series A Stock.  None of
         the options are exercisable until April 11, 1997.

(15)     Assumes the exercise in full of options granted in tandem with stock
         appreciation rights in February of 1997 to acquire 1,000,000 shares of
         TCI Group Series A Stock and 250,000 shares of Liberty Group Series A
         Stock.  None of the options are exercisable until February of 1998.
         Assumes the exercise in full of options granted in tandem with stock
         appreciation rights in February of 1997 to acquire 50,000 shares of
         TINTA Series A Stock.  None of the options are exercisable until
         February of 1998.

(16)     Assumes the exercise in full of stock options granted in tandem with
         stock appreciation rights in November 1992 to acquire 100,000 shares
         of TCI Group Series A Stock and 37,500 shares of Liberty Group Series
         A Stock.  Options to acquire 80,000 shares of TCI Group Series A Stock
         and 30,000 shares of Liberty Group Series A Stock are currently
         exercisable.  Also assumes the exercise in full of stock options
         granted in tandem with stock appreciation rights in November of 1993
         to acquire 100,000 shares of TCI Group Series A Stock and 37,500
         shares of Liberty Group Series A Stock.  Options to acquire 75,000
         shares of TCI Group Series A Stock and 28,125 shares of Liberty Group
         Series A Stock are currently exercisable.  Additionally assumes the
         exercise in full of stock options granted in tandem with stock
         appreciation rights in November of 1994 to acquire 200,000 shares of
         TCI Group Series A Stock and 75,000 shares of Liberty Group Series A
         Stock.  Options to acquire 80,000 shares of TCI Group Series A Stock
         and 30,000 shares of Liberty Group Series A Stock are currently
         exercisable.

(17)     Assumes the exercise in full of options granted in tandem with stock
         appreciation rights in December of 1995 to acquire 400,000 shares of
         TINTA Series A Stock.  Options to acquire 80,000 shares of TINTA
         Series A Stock are currently exercisable.  Additionally assumes the
         vesting in full of 15,000 TINTA Series A restricted stock. None of the
         stock is currently vested.
                                                                     (continued)





                                     III-29
<PAGE>   32



(18)     Assumes the exercise in full of stock options granted in tandem with
         stock appreciation rights in November of 1992 to acquire 300,000
         shares of TCI Group Series A Stock and 112,500 shares of Liberty Group
         Series A Stock.  Options to acquire 200,000 shares of TCI Group Series
         A Stock and 75,000 shares of Liberty Group Series A Stock are
         currently exercisable.  Additionally assumes the exercise in full of
         stock options granted in tandem with stock appreciation rights in
         November of 1993 to acquire 375,000 shares of TCI Group Series A Stock
         and 140,625 shares of Liberty Group Series A Stock.  Options to
         acquire 250,000 shares of TCI Group Series A Stock and 93,750 shares
         of Liberty Group Series A Stock are currently exercisable.  Also
         assumes the exercise in full of stock options granted in tandem with
         stock appreciation rights in November of 1994 to acquire  200,000
         shares of TCI Group Series A Stock and 75,000 shares of Liberty Group
         Series A Stock.  Options to acquire 80,000 shares of TCI Group Series
         A Stock and 30,000 shares of Liberty Group Series A Stock are
         currently exercisable.  Assumes the exercise in full of stock options
         granted in tandem with stock appreciation rights in December of 1995
         to purchase 1,000,000 shares of TCI Group Series A Stock.  Options to
         acquire 200,000 shares of TCI Group Series A Stock are currently
         exercisable.  Additionally assumes the vesting in full of 100,000 TCI
         Group Series A restricted stock.  None of the stock is currently
         vested.

(19)     Assumes the exercise in full of stock options granted in tandem with
         stock appreciation rights in December of 1995 to purchase 200,000
         shares of TCI Group Series A Stock and 75,000 shares of Liberty Group
         Series A Stock.  Options to acquire 80,000 shares of TCI Group Series
         A Stock and 30,000 shares of Liberty Group Series A Stock are
         currently exercisable.

(20)     Assumes the exercise in full of stock options granted in tandem with
         stock appreciation rights in December of 1995 to purchase 1,500,000
         Liberty Group Series A Stock.  Options to acquire 300,000 shares of
         Liberty Group Series A Stock are currently exercisable.

(21)     Assumes the exercise in full of stock options granted in tandem with
         stock appreciation rights in November of 1992 to acquire 100,000
         shares of TCI Group Series A Stock and 37,500 shares of Liberty Group
         Series A Stock.  Options to acquire 80,000 shares of TCI Group Series
         A Stock and 30,000 shares of Liberty Group Series A Stock are
         currently exercisable.  Also assumes the exercise in full of stock
         options granted in tandem with stock appreciation rights in October of
         1993 to acquire 100,000 shares of TCI Group Series A Stock and 37,500
         shares of Liberty Group Series A Stock.  Options to purchase 75,000
         shares of TCI Group Series A Stock and 28,125 shares of Liberty Group
         Series A Stock are currently exercisable.  Additionally assumes the
         exercise in full of stock options granted in tandem with stock
         appreciation rights in November of 1994 to acquire 200,000 shares of
         TCI Group Series A Stock and 75,000 shares of Liberty Group Series A
         Stock.  Options to purchase 80,000 shares of TCI Group Series A Stock
         and 30,000 shares of Liberty Group Series A Stock are currently
         exercisable.  Further assumes the exercise in full of options granted
         in tandem with stock appreciation rights in December of 1995 to
         acquire 300,000 shares of TCI Group Series A Stock and 112,500 shares
         of Liberty Group Series A Stock.  Options to purchase 60,000 shares of
         TCI Group Series A Stock and 22,500 shares of Liberty Group Series A
         Stock are currently exercisable.  Additionally assumes the vesting in
         full of 40,000 shares of TCI Group Series A restricted stock and
         15,000 shares of Liberty Group Series A restricted stock.  None of the
         stock is currently vested.

                                                                     (continued)





                                     III-30
<PAGE>   33



(22)     Certain executive officers and directors of TCI (10 persons, including
         Messrs. Malone, Vierra, Romrell, Clouston and Fisher as co-personal
         representative of the Estate of Bob Magness) hold options which were
         granted in tandem with stock appreciation rights in November of 1992,
         to acquire an aggregate of 3,025,000 shares of TCI Group Series A
         Stock and an aggregate of 1,134,375 shares of Liberty Group Series A
         Stock at purchase prices of $10.75 per shares and $11.16 per share,
         respectively.  Options to acquire 2,380,000 shares of TCI Group Series
         A Stock and 892,500 shares of Liberty Group Series A Stock are
         currently exercisable.

         Additionally certain executive officers (8 persons including Messrs.
         Vierra, Romrell and Clouston) hold stock options granted in tandem
         with stock appreciation rights in October and November of 1993 to
         acquire an aggregate of 1,100,000 shares of TCI Group Series A Stock
         and an aggregate of 412,500 shares of Liberty Group Series A Stock at
         purchase prices of $10.75 per share and $11.16 per share,
         respectively.  Options to acquire 793,750 shares of TCI Group Series A
         Stock and 297,656 shares of Liberty Group Series A Stock are currently
         exercisable.

         Also, certain executive officers and directors (10 persons including
         Messrs. Barton, Romrell, Fisher, Vierra and Clouston) hold stock
         options which were granted in tandem with stock appreciation rights in
         November of 1994 to acquire an aggregate of 1,450,000 shares of TCI
         Group Series A Stock and an aggregate of 543,750 shares of Liberty
         Group Series A Stock at purchase prices of $14.19 per share and $14.67
         per share, respectively.  Options to acquire 580,000 shares of TCI
         Group Series A Stock and 217,500 shares of Liberty Group Series A
         Stock are currently exercisable.

         Additionally, certain executive officers and directors (11 persons,
         including Messrs. Malone, Kern, Clouston, Coelho, Romrell and Fisher
         as co-personal representative of the Estate of Bob Magness) hold stock
         options which were granted, pursuant to the 1994 Plan and the 1996
         Plan, in tandem with stock appreciation rights in December of 1995 to
         acquire an aggregate of 4,650,000 shares of TCI Group Series A Stock
         at $14.62 per share.  Options to purchase 930,000 shares of TCI Group
         Series A Stock are currently exercisable.

         Additionally, certain executive officers and directors (6 persons,
         including Messrs. Fisher (as co-personal representative of the Estate 
         of Bob Magness), Malone, Kern, Barton and Romrell) hold stock
         options which were granted, pursuant to the 1994 Plan and the 1996
         Plan, in tandem with stock appreciation rights in December of 1995 to
         acquire an aggregate of 2,662,500 shares of Liberty Group Series A
         Stock at a purchase price of $16.00 per share.  Options to acquire
         532,500 shares of Liberty Group Series A Stock are currently
         exercisable.

         Also, certain executive officers (7 persons, including Messrs.
         Clouston and Romrell) hold  an aggregate of 240,000 shares of TCI
         Group Series A restricted stock.  None of the shares are currently
         vested.  Certain executive officers (2 persons, including Mr. Romrell)
         hold an aggregate of 30,000 shares of Liberty Group Series A
         restricted stock.  None of the shares are currently vested.

         Mr. Kern holds options to acquire 1,500,000 shares of TCI Group Series
         A Stock and 562,500 shares of Liberty Group Series A Stock as
         described in note 9 above.  Mr. Sparkman holds options to acquire
         100,000 shares of TCI Group Series A Stock and 37,500 shares of
         Liberty Group Series A Stock as described in note 12 above.  Mr.
         Hindery holds options to acquire 1,000,000 shares of TCI Group Series
         A Stock and 250,000 Liberty Group Series A Stock as described in note
         15 above.

                                                                     (continued)





                                     III-31
<PAGE>   34



         Pursuant to the Director Stock Option Plan, Messrs. Gallivan, Kim
         Magness, Kern, Coelho and Naify hold options to purchase an aggregate
         of 250,000 shares of TCI Group Series A Stock and an aggregate of
         93,750 shares of Liberty Group Series A Stock at purchase prices of
         $14.19 per share and $14.67 per share, respectively.  Options to
         purchase 100,000 shares of TCI Group Series A Stock and 37,500 shares
         of Liberty Group Series A Stock are currently exercisable.  Mr. Fisher
         holds an option to purchase 50,000 shares of TCI Group Series A Stock
         and 18,750 shares of Liberty Group Series A Stock at purchase prices
         of $16.99 and $16.83 per share, respectively.  Options to purchase
         10,000 shares of TCI Group Series A Stock and 3,750 shares of Liberty
         Group Series A Stock are currently exercisable.  Mr. Gould and Mr.
         Sparkman hold options to purchase an aggregate of 100,000 shares of
         TCI Group Series A Stock and 37,500 shares of Liberty Group Series A
         Stock at purchase prices of $12.25 and $17.50 per share, respectively.
         None of these options are exercisable until December 13, 1997.

         All of the aforementioned options with tandem stock appreciation
         rights, options and restricted stock are reflected in this table
         assuming the exercise or vesting in full of such securities.

(23)     Two executive officers, including Mr. Vierra, hold options which were
         granted in tandem with stock appreciation rights in December of 1995
         to acquire an aggregate of 450,000 shares of TINTA Series A Stock.
         Options to acquire 90,000 shares of TINTA Series A Stock are currently
         exercisable.  Additionally Mr. Vierra holds 15,000 shares of TINTA
         Series A restricted stock.  None of the shares are currently vested.
         Additionally, one executive officer holds options granted in tandem
         with stock appreciation rights in December of 1995 by TCI to acquire
         50,000 shares of its TINTA Series A Stock.  Options to acquire 10,000
         shares of TINTA Series A Stock are currently exercisable  Messrs.
         Malone, Kern and Gould hold options to purchase an aggregate 150,000
         shares of TINTA Series A Stock.  None of the options are exercisable
         until April 11, 1997.  Mr. Hindery holds an option to acquire 50,000
         shares of TINTA Series A Stock as described in note 15 above.

         No equity securities in any subsidiary of the Company, other than
directors' qualifying shares, are owned by any of the Company's executive
officers or directors, except for those shares of TINTA Series A Stock
reflected in the tables in Item 12 and except that Mr. Fisher, a director of
the Company, as co-personal representative of the Estate of Bob Magness, is
deemed to have beneficial ownership of 944 shares of WestMarc Series C
Cumulative Compounding Redeemable Preferred Stock; Mr. Kim Magness, a director
of the Company, owns 31 shares of WestMarc Series C Cumulative Compounding
Redeemable Preferred Stock; Dr. Malone, a director and an executive officer of
the Company, owns, as trustee for his children, 68 shares of WestMarc Series C
Cumulative Compounding Redeemable Preferred Stock; Mr. Larry Romrell, an
officer of the Company, owns 103 shares of WestMarc Series C Cumulative
Compounding Redeemable Preferred Stock and Mr.  Jerome Kern, a director of the
Company, is deemed to have beneficial ownership over 116 shares of WestMarc
Series C Cumulative Compounding Redeemable Preferred Stock owned by his wife,
Diane D. Kern.  Mr. Clouston, an executive officer of the Company, pursuant to
a Restricted Stock Award Agreement, owns 62 shares of WestMarc Series C
Cumulative Compounding Redeemable Preferred Stock.  (See Item 11(a) for
additional information regarding Mr. Clouston's ownership of such preferred
stock.)  Mr. Clouston was granted Telephony Options representing 1.0% of the
Company's common equity in TCI Telephony Services, Inc., Wireline Options
representing 1.0% of the Company's common equity in TCI Wireline, Inc.  and
Internet Options representing 1.0% of the Company's common equity in TCI.NET,
Inc.  Mr. Romrell was also granted Internet Options representing 1.0% of the
Company's common equity in TCI.NET, Inc. (See Item 11(b) for additional
information regarding these option grants). Mr. Coelho owns 1,500 shares of ETC
w/tci, Inc. (representing 15% of the common equity outstanding) and under
certain circumstances will be entitled to increase his percentage ownership to 
up to 20% (see Item 13(a) for additional information).

                                                                     (continued)





                                     III-32
<PAGE>   35




         (c)     Change of control.  The Company knows of no arrangements,
including any pledge by any person of securities of the Company, the operation
of which may at a subsequent date result in a change in control of the Company.

Item 13.         Certain Relationships and Related Transactions.

         (a)     Transactions with management and others.

         Pursuant to a Restricted Stock Award Agreement dated December 10,
1992, the Company transferred to Mr. Fisher, a director and until January 1,
1996, an officer of the Company, 124.03 shares (having a liquidation value of
$4 million) of WestMarc Series C Cumulative Compounding Preferred Stock owned
by the Company, subject to forfeiture in the event of certain circumstances
from the date of grant through February 1, 2002, with the number of shares
subject to forfeiture decreasing by 10% on February 1 of each year.  Upon Mr.
Fisher's resignation as an officer of the Company effective January 1, 1996, he
acquired vested title to 37.209 of such shares of WestMarc Series C Cumulative
Compounding Preferred Stock and forfeited the balance of such shares.  As
described below, effective as of January 31, 1996, the 37.209 vested shares of
WestMarc Series C Cumulative Compounding Preferred Stock owned by Mr. Fisher
were used by one of his affiliates as the consideration for the purchase of
certain partnership interests held by subsidiaries of the Company.

         In 1989, ECP Holdings, Inc., a subsidiary of the Company ("ECP"), and
Halcyon Communications, Inc., an Oklahoma corporation which is not an affiliate
of the Company  ("HCI"), formed Halcyon Communications Partners, an Oklahoma
general partnership ("HCP"), for the purpose of acquiring, owning and operating
cable television systems.  In 1994, HCI and American Televenture of
Minersville, Inc., a subsidiary of the Company ("ATM"), as general partners,
and three other subsidiaries of the Company, TCI Cablevision of Nevada, Inc.
("TCINV"), TEMPO Cable, Inc. ("Tempo Cable"), and TCI Cablevision of Utah, Inc.
("TCIU") as limited partners, formed Halcyon Communications Limited
Partnership, an Oklahoma limited partnership ("HCLP"), for the purpose of
acquiring, owning and operating certain other cable television systems.
Effective as of January 31, 1996, Fisher Communication Associates, L.L.C., a
Colorado limited liability company ("Fisher Communications") controlled by Mr.
Donne F. Fisher, a director (and, until January 1, 1996, an executive officer)
of the Company purchased one-third of ECP's partnership interest in HCP and
one-third of the partnership interest of each of ATM, TCINV, TCIU and Tempo
Cable in HCLP, a ten-year option to purchase the balance of ECP's partnership
interest in HCP and ten-year options to purchase the balance of the partnership
interest in HCLP of each of ATM, TCINV, TCIU and Tempo Cable.  The purchase
price for each such partnership interest purchased by Fisher Communications
consisted of shares of Series C Cumulative Compounding Preferred Stock of
WestMarc Communications, Inc., a subsidiary of the Company (the "WestMarc
Shares").  The purchase price for each such option acquired by Fisher
Communications was $100 in cash, and each such option is exercisable for cash
in a specified amount.  The number of WestMarc Shares delivered to each of the
Company's subsidiaries named above as consideration for one-third of its
partnership interest in HCP or HCLP, and the cash exercise price which Fisher
Communications would be required to pay in order to exercise the options
granted by those subsidiaries, are as follows:

<TABLE>
<CAPTION>
                                                                             Cash Exercise Price
                                    Number of WestMarc Shares                     Of Option        
                                    -------------------------                -------------------
         <S>                                <C>                                     <C>
         ECP                                14.8836                                 $1,200,000
         ATM                                 0.5224                                     42,120
         TCINV                               2.8911                                    233,100
         TCIU                                4.3557                                    351,180
         Tempo Cable                        14.5562                                  1,173,600
                                            -------                                 ----------
                     
                                            37.2090                                 $3,000,000
                                            =======                                 ==========
</TABLE>

                                                                     (continued)





                                     III-33
<PAGE>   36




         The WestMarc Shares are not publicly traded.  The dividend,
liquidation, and redemption features of the WestMarc Shares are determined by
reference to "Liquidation Price," which is defined, per share, as the sum of
(i) $32,250 plus (ii) an amount equal to all dividends which accrued during any
quarterly dividend period and were not paid in full at the end of that period
or subsequently.

         The Company has entered into an agreement in principle to acquire (i)
all of the partnership interests (other than a .001 percent general partner
interest) in InterMedia Capital Management, a California limited partnership
("ICM I"), (ii) all of the partnership interests (other than a .001 percent
general partner interest and a .001 percent special limited partner interest)
in InterMedia Capital Management III, L.P. ("ICM III"), and (iii) all of the
partnership interests (other than a .001 percent general partner interest and a
 .001 percent special limited partner interest) in InterMedia Capital Management
IV, L.P. ("ICM IV") for total consideration of 2,545,455 shares (the "TCI
Shares") of the Company's TCI Group Series B Stock, $10,000,000 in cash
(subject to certain adjustments) and assumption of certain liabilities totaling
approximately $11,300,000.  The partnership interests in ICM IV to be acquired
by the Company were acquired by the sellers of such interests in January and 
July 1996 for $21,750.  The other interests to be acquired by the Company were
acquired by the sellers of those interests before April 1995.  Mr. Hindery, an
executive officer of the Company, is the beneficial owner of a 66.3% interest in
ICM I, a 94.0% interest in ICM III, and a 81.1% interest in ICM IV, and Mr.
Fisher, a director of the Company, is the beneficial owner of a 1.6% interest in
ICM IV.  The Company also has agreed in principle that if InterMedia Partners
VI, L.P. ("IP-VI") is formed and fully funded on terms and conditions agreed by
the Company (the "IP-VI Effective Date"), the Company will acquire all of the
partnership interests (other than a .001 percent general partner interest) of
InterMedia Capital Management VI, L.P. ("ICM-VI") in exchange for a number of
shares of Tele-Communications, Inc. Series B common stock (the "Contingent TCI
Shares") determined by dividing $5,000,000 by the average of the closing prices
of the corresponding Tele-Communications, Inc. Series A common stock for the 20
trading days preceding the IP VI Effective Date and $1,000,000 in cash.  Mr.
Hindery is the beneficial owner of 100% of ICM-VI and acquired his interest in
ICM-VI in July of 1996 for $10,000.  Mr. Fisher will be entitled to a consulting
fee in the approximate amount of $400,000 in cash and 31,030 shares of TCI Group
Series B Stock upon completion of the aforementioned transactions involving ICM
I, ICM III and ICM IV and in connection with the formation of IP VI
(collectively, the "InterMedia Transactions").  Mr. Peter Kern, son of Mr.
Jerome H. Kern, a director of the Company, will be entitled to an advisory fee
in an amount to be determined upon completion of the InterMedia Transactions.
These fees will be paid by the entities receiving payments from the Company in
the InterMedia Transactions.  Dr. Malone, an executive officer and director of
the Company, will have the power to direct the voting of the TCI Shares and, if
they are issued, the Contingent TCI Shares pursuant to a voting agreement, and
Dr. Malone also will have a right of first refusal with respect to any proposed
transfer of the TCI Shares and, if they are issued, the Contingent TCI Shares.
That right of first refusal may be exercised by Dr. Malone either by the payment
of cash or, subject to certain exceptions, by exchanging shares of TCI Group
Series A Stock for the TCI Shares or Contingent TCI Shares to be acquired by
him. If not exercised by Dr. Malone, the right of first refusal may be
exercised by the Company.

         Completion of the InterMedia Transactions is subject to various
conditions, including execution of definitive agreements, receipt of consents
from governmental authorities and other third parties.

                                                                     (continued)





                                     III-34
<PAGE>   37



         The interests of Messrs. Hindery, Fisher and Malone in the InterMedia
Transactions were disclosed to the Company's Board of Directors which approved
the InterMedia Transactions pursuant to a vote in which Messrs. Fisher, Kern
and Malone abstained from voting.

         On April 1, 1996, Dr. Malone sold 450,000 shares of TINTA Series A
Stock to the Company for a total purchase price of $9,787,500.  Such shares
were owned of record and beneficially by Dr. Malone.  Dr. Malone purchased the
shares of TINTA Series A Stock in the initial public offering of the TINTA
Series A Stock at a price of $16.00 per share.  Dr.  Malone sold such shares to
the Company at a price of $21.75 per share, the market price for the TINTA
Series A Stock as of the close of business on April 1, 1996.

         Effective January 1, 1996, Mr. Fisher resigned as an executive officer
of the Company and the Company and Mr.  Fisher entered into a consulting
agreement.  During the term of the consulting agreement, which extends until
January 1, 2006 unless sooner terminated as provided in the agreement, Mr.
Fisher is obligated to provide consulting services for up to 70 hours per month
and 700 hours during any period of twelve consecutive months as and if
requested by the Company's chief executive officer.  Whether or not his
services are requested, Mr. Fisher will receive compensation as follows:  (i)
during the period from January 1, 1996 through December 31, 2000, inclusive,
the rate of $475,000 per annum, increased annually by the amount of $25,000 per
annum in each successive year of such period commencing January 1, 1997 and
(ii) from and after January 1, 2001 throughout the balance of the Term, the
rate of $500,000 per annum.  If he dies before the end of the term of his
consulting services, the Company is required to pay his designated
beneficiaries a lump sum equal to one year's compensation at the then-current
rate.  During the term of the agreement, Mr. Fisher will continue to be
entitled to participate in, and to be accorded all rights and benefits under,
all group insurance policies (including, but not limited to, all disability,
life, health and medical insurance policies) maintained by the Company for the
benefit of its employees.  The consulting agreement also provides for Mr.
Fisher's personal use of the Company's aircraft and flight crew, limited to an
aggregate value of $35,000 per year.

         Under a prior employment agreement between Mr. Fisher and the Company,
a portion of Mr. Fisher's salary was deferred, and the deferred amounts, plus
interest at an annual rate of 13%, were to be paid to him in 240 monthly
installments which would have commenced on the date of termination of his
full-time employment with the Company.  The consulting agreement provides for
such payment to be made to Mr. Fisher in 240 monthly installments of $21,425.92
each, without interest, commencing on January 1, 2001, with any remaining
payments due after Mr. Fisher's death being paid in a lump-sum to his
designated beneficiaries.  Similarly, Mr. Fisher's 1992 employment agreement
with the Company provided for Mr. Fisher to receive, commencing on termination
of his employment, 240 consecutive monthly salary continuation payments of
$6,250, increased at the rate of 12% per annum, compounded annually from
January 1, 1988 to the date of such termination.  The consulting agreement
provides that such salary continuation payments will be made in 240 consecutive
monthly payments of $27,271.84 each, without interest, commencing on January 1,
2001, with any remaining payments due after Mr. Fisher's death being made to
his designated beneficiaries.
                                                                     (continued)





                                     III-35
<PAGE>   38



         Mr. Fisher's consulting agreement provides that during its term, Mr.
Fisher will not be connected in any manner specified with any entity which
competes in a material respect with the business of the Company; however, he
may own securities of any corporation listed on a national securities exchange
or quoted in the Nasdaq Stock Market to the extent of an aggregate of 5% of the
amount of such securities outstanding.

         Effective March 11, 1995, Mr. Sparkman resigned as an executive
officer of the Company and the Company and Mr.  Sparkman entered into a
consulting agreement.  During the term of the consulting agreement, which
extends until September 30, 2002 unless sooner terminated as provided in the
agreement, Mr. Sparkman is required to provide consulting services for no more
than 700 hours per year as and if requested by the Company's chief executive
officer.  Whether or not his services are requested, Mr. Sparkman will receive
compensation as follows:  (i) during the period from March 11, 1995 through
December 31, 1997, a sum equal to the rate of $773,000 per annum and (ii) from
and after January 1, 1998 throughout the balance of the term, the rate of
$500,000 per annum.  If he dies before the end of the term of his consulting
services, the Company is required to pay his designated beneficiaries a lump
sum equal to one year's compensation at the then-current rate.  During the term
of the agreement, Mr. Sparkman will continue to be entitled to participate in,
and to be accorded all rights and benefits under, all group insurance policies
(including, but not limited to, all disability, life, health and medical
insurance policies) maintained by the Company for the benefit of its employees.

         Under a prior employment agreement between Mr. Sparkman and the
Company, a portion of Mr. Sparkman's salary was deferred, and the deferred
amounts, plus interest at an annual rate of 8%, were to be paid to him in 120
monthly installments which would have commenced on the date of termination of
his full-time employment with the Company.  The consulting agreement provides
for such payment to be made to Mr. Sparkman in 120 monthly installments of
$7,294.32 each, without interest, commencing on January 1, 1998, with any
remaining payments due after Mr. Sparkman's death being paid in a lump-sum to
his designated beneficiaries.  Under Mr. Sparkman's 1993 employment agreement
with the Company, a portion of Mr. Sparkman's salary was deferred, and the
deferred amounts, plus interest at an annual rate of 13%, were to be paid to
him in 240 monthly installments which would have commenced on the date of
termination of his full-time employment with the Company.  The consulting
agreement provides for such payment to be made to Mr. Sparkman in 240 monthly
payments of $15,116.03 each, without interest, commencing on January 1, 1998,
with any remaining payments due under Mr. Sparkman' death being paid in a
lump-sum to his designated beneficiaries.  Similarly, Mr. Sparkman's 1993
employment agreement with the Company provided for Mr. Sparkman to receive,
commencing on termination of his employment, 240 consecutive monthly salary
continuation payments of $6,250, increased at the rate of 12% per annum,
compounded annually from January 1, 1988 to the date of such termination.  The
consulting agreement provides that such salary continuation payments will be
made in 240 consecutive monthly payments of $19,411.55 each, without interest,
commencing on January 1, 1998, with any remaining payments due after Mr.
Sparkman's death being made to his designated beneficiaries.

         Mr. Sparkman's consulting agreement provides that during its term, Mr.
Sparkman will not be connected in any manner specified with any entity which
competes in a material respect with the business of the Company; however, he
may own securities of any corporation listed on a national securities exchange
or quoted in the Nasdaq Stock Market to the extent of an aggregate of 5% of the
amount of such securities outstanding.

                                                                     (continued)





                                     III-36
<PAGE>   39



         The Company entered into an employment agreement with Tony Coelho,
which was effective as of October 1, 1995, with respect to the terms of Mr.
Coelho's employment as the Chairman of the Board and Chief Executive Officer of
the education business which is now conducted by the Company's ETC w/tci, Inc.
subsidiary ("ETC w/tci").  The employment agreement runs through September 30,
2000.  Under the terms of the employment agreement, Mr. Coelho is entitled to
an annual base salary of not less than $400,000 as well as benefits
commensurate with similarly situated executives of the Company.  In the event
that Mr. Coelho's employment is terminated by the Company other than as a
result of death or for cause (as defined in the employment agreement), Mr.
Coelho will be entitled to receive all remaining compensation to which he would
have been entitled through the term of his employment agreement.  In connection
with his employment, Mr.  Coelho was granted options to acquire 100,000 shares
of TCI Group Series A Stock at an exercise price of $14.62 per share and 10,000
shares of SATCo Series A Stock at an exercise price of $23.76 per share subject
to customary terms and was granted 1,500 shares of common stock of ETC w/tci
(which at the time of such grant represented 15% of the common equity
outstanding of ETC w/tci) at a price of $0.10 per share.  Under certain
circumstances, Mr. Coelho will be entitled to increase his percentage ownership
in ETC w/tci to up to 20%.  The terms of the agreements under which Mr.  Coelho
will acquire such additional equity interest in ETC w/tci will, among other
rights, afford him the right at any time after September 30, 2000 to require
the Company to purchase his equity interest at fair market value and require
the Company to purchase his entire equity interest at fair market value on
September 30, 2001.

         The Company and Mr. Brendan Clouston have entered into a letter
agreement, as amended (the "Agreement"). Mr. Clouston has notified the Company
that a financial institution may lend him certain amounts of money (the 
"Loan"), which Loan may be secured in whole or in part, by the Agreement.
Pursuant to the Agreement, TCI agrees to purchase from Mr. Clouston, at his
request or by the request of such financial institution upon a default as
provided under the relevant agreements evidencing the Loan, all, but not less
than all of Mr. Clouston's grants of options and restricted stock awards as of
April 7, 1997 (the "Grants") (as previously described in Items 11 and 12) at a
price of $10 million. The $10 million amount shall decrease upon the exercise of
any options included in the Grants, by the amount of the difference between the
exercise price and the fair market value of the exercised options at the
respective time of such exercise and by the fair market value of any of the
restricted stock awards that vest at the time of such vesting. Additionally, if
Mr. Clouston will apply the amounts referred to in the previous sentence, less
only applicable taxes, to prepay the Loan. The Agreement expires on March 31,
2002.

         The Company believes that the foregoing business dealings with
management during 1996 were based upon terms no less advantageous to the
Company than those which would be available in dealing with unaffiliated
persons.

         (b)     Certain business relationships

         John Malone is currently the Chief Executive Officer, Chairman of the
Board and a director of TCI and is also the Chairman of the Board and a
director of Satellite.  Dr. Malone is also a principal stockholder of both TCI
and Satellite.


                                                                     (continued)





                                     III-37
<PAGE>   40



         Since the consummation of the Distribution, Satellite and TCI have
operated independently, and neither has any stock ownership, beneficial or
otherwise, in the other. However, for the purposes of governing certain of the
ongoing relationships between Satellite and TCI after the Distribution, and to
provide mechanisms for an orderly transition, Satellite and TCI have entered
into various agreements, including the "Reorganization Agreement," the
"Transition Services Agreement," an amendment to TCI's existing "Tax Sharing
Agreement," the "Indemnification Agreements," the "Trade Name and Service Mark
Agreement" and the "Share Purchase Agreement," all of which are described
below. In addition, TCIC continues to provide installation, maintenance,
retrieval and other customer fulfillment services for certain customers of
Satellite, pursuant to the "Fulfillment Agreement," and entered into the "TCIC
Credit Facility" with Satellite, both of which are described below.

         Reorganization Agreement.           On the Distribution date, TCI,
TCIC and a number of other TCI subsidiaries, including Satellite, entered into
the Reorganization Agreement, which provided for, among other things, the
principal corporate transactions required to effect the Distribution, the
conditions thereto and certain provisions governing the relationship between
Satellite and TCI with respect to and resulting from the Distribution.

         Certain of Satellite's assets relating to the digital satellite
business were historically owned by subsidiaries of TCI other than Satellite
and its predecessors. These assets include the capital stock of Tempo
Satellite, Inc. ("Tempo") and the 20.86% partnership interests in PRIMESTAR
Partners, L.P. ("PRIMESTAR Partners"). The Reorganization Agreement provided
for, among other things, the transfer of these assets to Satellite and for the
assumption by Satellite of related liabilities. No consideration was payable by
Satellite for these transfers, except that two subsidiaries of Satellite
purchased TCI's partnership interests in PRIMESTAR Partners for consideration
payable by delivery of promissory notes issued by such subsidiaries (the "K-1
Notes"), which promissory notes were assumed by TCI on the Distribution date in
the form of a capital contribution to Satellite. The Reorganization Agreement
also provides for certain cross-indemnities designed to make Satellite
financially responsible for all liabilities relating to the digital satellite
business prior to the Distribution, as well as for all liabilities incurred by
Satellite after the Distribution, and makes TCI financially responsible for all
potential liabilities of Satellite which are not related to the digital
satellite business, including, for example, liabilities arising as a result of
Satellite's having been a subsidiary of TCI. The Reorganization Agreement
further provided for each of Satellite and TCI to preserve the confidentiality
of all confidential or proprietary information of the other party, for five
years following the Distribution, subject to customary exceptions, including
disclosures required by law, court order or government regulation.

                                                                     (continued)





                                     III-38
<PAGE>   41



         Pursuant to the Reorganization Agreement, on the Distribution date,
Satellite issued to TCIC a note in the principal amount of $250,000,000 (the
"Satellite Note") representing a portion of Satellite's intercompany balance
owed to TCIC on such date. See "-TCIC Credit Facility" below. Pursuant to the
Reorganization Agreement, the remainder of Satellite's intercompany balance
owed to TCIC on the Distribution date (other than certain advances to Satellite
made by TCIC in 1996 to fund certain construction and related costs associated
with TCI Satellite Entertainment, Inc.'s Satellites ("SATCo Satellites"), as
described below under "-Reimbursement of Certain Satellite Expenses"), and the
indebtedness represented by the K-1 Notes were assumed by TCI in the form of
(i) a $100 million capital contribution to Satellite, (ii) consideration for
Satellite's assumption of TCI's obligations under options granted to Brendan R.
Clouston, Larry E. Romrell and another employee of TCI to purchase shares of
SATCo Series A Stock representing 1.0%, 1.0% and 0.5%, respectively, of the
shares of Satellite common stock issued and outstanding on the Distribution
date, determined immediately after giving effect to the Distribution but before
giving effect to the issuance of the shares of SATCo Series A Stock issuable
upon exercise of such options, and (iii) consideration for Satellite's grant of
an option to TCI to purchase up to 4,765,000 shares of SATCo Series A Stock (as
such number may be adjusted to reflect stock dividends, stock splits and the
like), for a purchase price equal to the par value of such shares, as necessary
to satisfy TCI's obligations to deliver shares of SATCo Series A Stock upon
conversion of certain convertible securities of TCI as a result of the
Distribution. See "-Other Arrangements" below.

         Transition Services Agreement.    Pursuant to the Transition Services
Agreement between TCI and Satellite, TCI is obligated to provide to Satellite
certain services and other benefits, including certain administrative and other
services that were provided by TCI prior to the Distribution. Such services
include (i) tax reporting, financial reporting, payroll, employee benefit
administration, workers' compensation administration, telephone, fleet
management, package delivery, management information systems, billing, lock
box, remittance processing and risk management services, (ii) other services
typically performed by TCI's accounting, finance, treasury, corporate, legal,
tax, benefits, insurance, facilities, purchasing, fleet management and advanced
information technology department personnel, (iii) use of telecommunications
and data facilities and of systems and software developed, acquired or licensed
by TCI from time to time for financial forecasting, budgeting and similar
purposes, including without limitation any such software for use on personal
computers, in any case to the extent available under copyright law or any
applicable third-party contract, (iv) technology support and consulting
services, and (v) such other management, supervisory, strategic planning or
other services as Satellite and TCI may from time to time mutually determine to
be necessary or desirable.

         Pursuant to the Transition Services Agreement, TCI has also agreed to
provide Satellite with certain most- favored-customer rights to programming
services that TCI or a wholly owned subsidiary of TCI may own in the future and
access to any volume discounts that may be available to TCI for purchase of
home satellite dishes, satellite receivers and other equipment.

         As compensation for services rendered to Satellite and for the
benefits made available to Satellite pursuant to the Transition Services
Agreement, Satellite is required to pay TCI a fee of $1.50 per qualified
subscribing household or other residential or commercial unit (counted as one
subscriber regardless of the number of satellite receivers) per month,
commencing with the Distribution date, up to a maximum of $3 million per month,
and reimburse TCI quarterly for direct, out-of-pocket expenses incurred by TCI
to third parties in providing the services.


                                                                     (continued)





                                     III-39
<PAGE>   42



         The Transition Services Agreement continues in effect until the close
of business on December 31, 1999 and will be renewed automatically for
successive one-year periods thereafter, unless earlier terminated by (i) either
party at the end of the initial term or the then current renewal term, as
applicable, on not less than 180 days' prior written notice to the other party,
(ii) TCI upon written notice to Satellite following certain changes in control
of Satellite, and (iii) either party if the other party is the subject of
certain bankruptcy or insolvency-related events.  During the period commencing
with the Distribution date and ending on December 31, 1996, Satellite paid
$763,000 to TCIC pursuant to the Transition Services Agreement.

         Tax Sharing Agreement.   Through the Distribution date, Satellite's
results of operations were included in TCI's consolidated U.S. federal income
tax returns, in accordance with the existing tax sharing arrangements among TCI
and its consolidated subsidiaries. Effective July 1, 1995, TCI, TCIC and
certain other subsidiaries of TCI entered into the Tax Sharing Agreement, which
formalized such pre-existing tax sharing arrangements and implemented
additional procedures for the allocation of certain consolidated income tax
attributes and the settlement of certain intercompany tax allocations. The Tax
Sharing Agreement encompasses U.S. Federal, state, local and foreign tax
consequences and relies upon the Code and any applicable state, local and
foreign tax law and related regulations. Prior to the Distribution date, the
Tax Sharing Agreement was amended to provide that Satellite be treated as if it
had been a party to the Tax Sharing Agreement, effective July 1, 1995.
Pursuant to the Amended Tax Sharing Agreement, beginning on the July 1, 1995
effective date, Satellite is responsible to TCI for its share of current
consolidated income tax liabilities through the Distribution date; TCI is
responsible to the extent that Satellite's income tax attributes generated
after the effective date and through the Distribution date are utilized by TCI
to reduce its consolidated income tax liabilities.

         Indemnification Agreements.  On the Distribution date, Satellite
entered into the Indemnification Agreements with TCIC and TCI UA 1. The
Indemnification Agreement with TCIC provides for Satellite to reimburse TCIC
for any amounts drawn under an irrevocable transferable letter of credit issued
by the Bank of New York for the account of TCIC to support Satellite's share of
PRIMESTAR Partners' obligations under the Amended and Restated Memorandum of
Agreement between PRIMESTAR Partners and GE American Communications, Inc. ("GE
Americom"), with respect to PRIMESTAR Partners' use of transponders on the GE
Americom medium power satellite that was launched on January 30, 1997, and
which was declared commercially operational on March 6, 1997 ("GE-2").  At
December 31, 1996, the drawable amount of such letter of credit was
$25,000,000.

         The Indemnification Agreement with TCI UA 1 provides for Satellite to
reimburse TCI UA 1 for any amounts drawn under the TCI UA 1 Letter of Credit,
which supports the PRIMESTAR Credit Facility that was obtained by PRIMESTAR
Partners to finance advances to Tempo for payments due in respect of the
construction of SATCo Satellites and that is supported by letters of credit
arranged for by affiliates of the partners of the PRIMESTAR Partners (other
than G.E.  Americom Services, Inc.). The amount of the TCI UA 1 Letter of
Credit was $141,250,000 at December 31, 1996.

         The Indemnification Agreements further provide for Satellite to
indemnify and hold harmless TCIC and TCI UA 1 and certain related persons from
and against any losses, claims, and liabilities arising out of the respective
letters of credit or any drawings thereunder. The payment obligations of
Satellite to TCIC and TCI UA 1, under such Indemnification Agreements are
subordinated in right of payment with respect to certain future obligations of
Satellite to financial institutions.  During the year ended December 31, 1996,
the aggregate amount paid by Satellite to TCI under the Indemnification
Agreements was $1,623,000.  Such amount represents the aggregate fees incurred
by TCI with respect to the TCI UA 1 Letter of Credit from the Distribution date
through December 31, 1996.

                                                                     (continued)





                                     III-40
<PAGE>   43



         Trade Name and Service Mark License Agreement.     Pursuant to the
Trade Name and Service Mark License Agreement (the "License Agreement"), TCI
granted to Satellite, for an initial term of three years following the
Distribution, a non-exclusive non-assignable license to use certain trade names
and service marks specifically identified in the License Agreement, including
the mark "TCI" in the context of the digital satellite business. The License
Agreement provides, among other things, that all advertising, promotion and use
of certain of TCI's trade names and service marks by Satellite shall be
consistent with TCI guidelines and standards, as well as subject to TCI
approval in certain circumstances.

         Fulfillment Agreement.  TCIC has historically provided Satellite with
certain customer fulfillment services for PRIMESTAR customers enrolled by
Satellite's direct sales force or the national call center maintained by
Satellite for orders, information and customer service. Charges for such
services have been allocated to Satellite by TCIC based on scheduled rates.

         Pursuant to the Fulfillment Agreement entered into by TCIC and
Satellite, TCIC continues to provide fulfillment services to Satellite
following the Distribution with respect to customers of the PRIMESTAR medium
power service. Such services include installation, maintenance, retrieval,
inventory management and other customer fulfillment services. The Fulfillment
Agreement became effective on January 1, 1997. Among other matters, the
Fulfillment Agreement (i) sets forth the responsibilities of TCIC with respect
to fulfillment services, including performance standards and penalties for
nonperformance, (ii) provides for TCIC's fulfillment sites to be connected to
the billing and information systems used by Satellite, allowing for on-line
scheduling and dispatch of installation and other service calls, and (iii)
provides scheduled rates to be charged to Satellite for the various customer
fulfillment services to be provided by TCIC.  Satellite retains sole control
under the Fulfillment Agreement to establish the retail prices and other terms
and conditions on which installation and other services are provided to
Satellite's customers. The Fulfillment Agreement also provides that, during the
term of the Fulfillment Agreement, TCIC will not provide fulfillment services
to any other Ku-band, Ka-band, direct broadcast satellite ("DBS"), broadcast
satellite service, fixed satellite service, C- band, wireless or other similar
or competitive provider or distributor of television programming services
(other than traditional cable). The Fulfillment Agreement has an initial term
of two years and is terminable, on 180 days notice to TCIC, by Satellite at any
time during the first six months following the Distribution date. The scheduled
rates for the services to be provided by TCIC under the Fulfillment Agreement
exceed the scheduled rates upon which charges historically have been allocated
to Satellite for such services, reflecting in part the value to Satellite, as
determined by Satellite's management, of the performance standards,
exclusivity, termination right and certain other provisions included in the
Fulfillment Agreement.  Satellite and TCIC are currently discussing certain
proposed changes to the Fulfillment Agreement, but there can be no assurance
that any such changes will be agreed to or that Satellite will not exercise its
rights to terminate the Fulfillment Agreement if an acceptable amendment is not
agreed to prior to the end of Satellite's six-month termination window.  There
can be no assurance that the terms of the Fulfillment Agreement are not more or
less favorable than those which could be obtained from unaffiliated third
parties, or that comparable services could be obtained by Satellite from third
parties on any terms if the Fulfillment Agreement is terminated.  During the
year ended December 31, 1996, the aggregate amount paid by Satellite to TCIC
for fulfillment services was $74,049,000 (including $6,432,000 paid subsequent
to the Distribution date).

                                                                     (continued)





                                     III-41
<PAGE>   44



         TCIC Credit Facility.  In connection with the Distribution, Satellite
and TCIC entered into the TCIC Credit Facility to provide for the terms of the
Satellite Note and to provide for a revolving credit facility (the "TCIC
Revolving Loans").  The TCIC Credit Facility required Satellite to use its best
efforts to obtain external debt or equity financing after the Distribution date
and provided for mandatory prepayment of the TCIC Revolving Loans and the
Satellite Note from the proceeds thereof.  The initial borrowings under the
Bank Credit Facility were used to repay the Satellite Note in full.  In
connection with the February 1997 issuance of the Senior Subordinated Notes and
Senior Subordinated Discount Notes by Satellite and the March 1997
determination that GE-2 was commercially operational, borrowing availability
pursuant to the TCIC Credit Facility was terminated.

         Borrowings under the TCIC Revolving Loans bore interest at 10% per
annum, compounded semi-annually.  Commitment fees equal to 3/8% of the average
unborrowed availability under the TCIC Credit Facility were payable to TCIC
annually.  Commitment fees paid to TCIC during the year ended December 31, 1996
aggregated $141,000.  From the Distribution date through December 31, 1996, the
aggregate amount of interest paid by Satellite to TCIC pursuant to the TCIC
Credit Facility was $1,946,000.

         Reimbursement of Certain Satellite Expenses.                   During
1996, TCIC made intercompany advances to Satellite to fund the majority of the
construction and related costs associated with the SATCo Satellites. Prior to
1996, PRIMESTAR Partners had funded substantially all of the construction and
related costs associated with SATCo Satellites. In connection with the
Distribution, a determination was made to provide that such 1996 advances from
TCIC would be repaid by Satellite to TCIC (notwithstanding the Reorganization
Agreement), to the extent (and only to the extent) that Tempo received
corresponding advances from PRIMESTAR Partners.

         As a result of negotiations between Satellite and PRIMESTAR Partners,
PRIMESTAR Partners advanced $73,786,000 to Tempo in December 1996 to reimburse
Tempo for all the 1996 costs which previously had been funded by TCIC. Upon
receipt, such advance was paid to TCIC by Tempo in repayment of such 1996
advance by TCIC.

         Call Center JV.  In March 1997, Satellite and TCI agreed to form a
limited liability company (the "Call Center LLC") through which Satellite and
TCI are expected to conduct various customer call service operations.  The
initial ownership interests of Satellite and TCI in the Call Center LLC are
expected to be 28% and 72%, respectively, subject to adjustment based on various
categories of operating data for the last three quarters of 1997, including call
center volume attributable to their customers.  The Call Center LLC is expected
to be managed by a four-member board of directors, two members of which are to
be appointed by TCI and two members of which are to be appointed by Satellite.
Any decision by the board of directors is expected to require approval by all
four directors. Initially, the Call Center LLC is expected to provide customer
call services only for TCI cable subscribers and Satellite DBS subscribers, but
it is expected that those services in the future will be made available to third
parties, including, for example, unaffiliated cable companies.  The hourly rates
for services provided by the Call Center LLC to Satellite and TCI through
December 31,1997, are expected to be fixed based on their respective expense
budgets for those services. Thereafter, Satellite and TCI expect that the rates
charged to them will be fair market rates, as established by agreement between
Satellite and TCI.
                                                                     (continued)





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<PAGE>   45



         TCI has agreed to contribute assets comprising certain currently
operating call center facilities, as well as a facility under construction. The
assets to be contributed by TCI include two operating call centers and the
facility under construction.  Satellite has agreed to contribute assets
comprising two currently operating call center facilities.  Transfers of various
of the call center assets to the Call Center LLC will be subject to receipt of
consents of third parties, including governmental authorities.  Pending receipt
of any required third-party consents and regulatory approvals, Satellite and TCI
have agreed to provide to the Call Center LLC the use of the call center assets
to be contributed under services agreements or similar arrangements to the
extent feasible.  Operating obligations relating to the contributed assets,
including leases of real and personal property (but not including any
indebtedness for borrowed money), are expected to be assumed by the Call Center
LLC.

         No definitive agreement has yet been reached regarding the
above-described transaction, and there can be no assurance that any such
transaction will be consummated.

         Other Arrangements.  On the Distribution date, TCI and Satellite
entered into the Share Purchase Agreement, which obligates TCI and Satellite to
sell to each other from time to time, at the then current market price, shares
of TCI Group Series A Stock and SATCo Series A Stock, respectively, as
necessary to satisfy their respective obligations under TCI Group Series A
Options and SATCo Series A Options held after the Distribution date by their
respective employees and non-employee directors.

         Certain officers of Satellite who were officers or directors of TCI
and/or TCIC prior to the Distribution received undertakings of indemnification
from TCI and/or TCIC. Such undertakings survived the Distribution.

         National Digital Television Center, Inc. ("NDTC"), an indirect
subsidiary of TCI, has obtained a nontransferable, nonexclusive license to use
certain proprietary technology of Imedia Corporation currently under
development ("Imedia Technology") to provide statistical multiplexing of
digitally compressed video signals. Although there can be no assurance that the
Imedia Technology will be successfully implemented, if successful, such
technology would increase the number of digital program signals that could be
transmitted simultaneously over a single satellite transponder, thus
effectively increasing the digital compression ratio. NDTC has agreed that if,
prior to September 1, 1997, Satellite engages NDTC to provide digitization,
compression and uplinking services for any high power DBS system operated by
Satellite, and NDTC is authorized to use Imedia Technology or other proprietary
technologies to provide multiplexing of digitally compressed video signals for
Satellite, NDTC shall provide such multiplexing services to Satellite for an
agreed fee, based on NDTC's incremental costs and other factors. Satellite's
rights to receive multiplexing services under its agreement with NDTC are
assignable by Satellite to any affiliate of Satellite, including for this
purpose PRIMESTAR Partners.

         (c)     Indebtedness of management

         On March 4, 1997, Dr. Malone received an advance from a wholly-owned
subsidiary of the Company in the amount of $5,787,505.  On March 5, 1997,
Dr. Malone received a second advance from a wholly-owned subsidiary of the
Company in the amount of $5,813,755.  The terms of the advances were
memorialized by a promissory note entered into by Dr.  Malone.  The interest
rate on such loans is 1% over the one-month LIBOR rate compounded annually. As
of April 1, 1997, $58,451 of interest was accrued on the note.  Principal
outstanding on the note is due March 31, 1999 and interest is payable annually
on March 1 of each year.  The loan is secured by the pledge by Dr. Malone of
193,400 shares of Class B Preferred Stock owned beneficially and of record by 
Dr. Malone. Dr. Malone used the proceeds of the advances to purchase shares of
SATCo Series A Stock.





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