Overview of Liberty Media Group

         Liberty Media Group, through Liberty Media Corporation and its
subsidiaries and affiliates, owns interests in a broad range of video
programming, communications and Internet businesses in the United States,
Europe, South America and Asia. The principal assets in the Liberty Media Group
include interests in Starz Encore Group LLC, Discovery Communications, Inc.,
Time Warner Inc., QVC, Inc., USA Networks, Inc., Telewest Communications, plc,
TV Guide, Inc., Motorola, Inc., Sprint PCS Group, The News Corporation Limited,
Teligent, Inc. and Liberty Digital, Inc.

Governance Structure

         Substantially all of the businesses and assets included in the Liberty
Media Group are held by its primary operating unit, Liberty Media Corporation.
As a result of the TCI/AT&T Merger on March 9, 1999, Liberty Media Corporation
and several affiliated companies which make up the Liberty Media Group, are held
by wholly owned subsidiaries of AT&T. Liberty Media Group has a substantial
degree of managerial autonomy from AT&T as a result of its corporate governance
arrangement with AT&T, under which the board of directors and management of
Liberty Media Corporation control the business and affairs of the group. Liberty
Media Corporation's board of directors is controlled by persons designated by
Tele-Communications, Inc. ("TCI") prior to its acquisition by AT&T, and will
continue to be controlled by those persons, or others chosen by them, until at
least 2006. Liberty Media Corporation's management consists of individuals who
managed the businesses of TCI's Liberty Media Group and TCI Ventures Group prior
to the AT&T merger. The directors and officers of Liberty Media Corporation
serve in the same capacities with the affiliated companies included in the
Liberty Media Group. Liberty Media Corporation has entered into agreements with
AT&T which provide it with a level of financial and operational separation from
AT&T, define its rights and obligations as a member of AT&T's consolidated tax
group, enable it to finance its operations separately from those of AT&T and
provide it with certain programming rights with respect to AT&T's cable systems.

Recent Developments

         On March 1, 1999, United Video Satellite Group, Inc. acquired Liberty
Media Group's 40% interest in Superstar/Netlink Group and its 100% interest in
Netlink USA, which uplinks the signals of six Denver-based broadcast television
stations, in exchange for shares of UVSG common stock. On the same date, UVSG
acquired from The News Corporation Limited, in exchange for cash and shares of
UVSG common stock, the stock of certain corporations that publish TV Guide
Magazine and other printed television program listing guides and distribute TV
Guide Online. Following this transaction UVSG, which changed its name to TV
Guide, Inc., became jointly controlled by Liberty Media Group and News Corp.
with each owning approximately 44% of its equity and 49% of its voting power. In
October 1999, TV Guide announced that it had entered into a definitive merger
agreement with Gemstar International Group Limited, pursuant to which TV Guide
would become a wholly owned subsidiary of Gemstar. This transaction is subject
to the approval of the shareholders of each company (which was received on March
17, 2000) as well as customary closing conditions.

<PAGE>

         On March 22, 1999, Liberty Media Group entered into a seven-year
"cashless collar" with a financial institution with respect to 15 million
shares of Time Warner common stock, secured by 15 million shares of its
approximately 114 million shares of Time Warner Series LMCN-V Common Stock. In
effect, Liberty Media Group purchased a put option that gives it the right to
require its counterparty to buy 15 million Time Warner shares from Liberty
Media Group in approximately seven years for $67.45 per shares. Liberty Media
Group simultaneously sold a call option giving the counterparty the right to
buy the same shares from Liberty Media Group in approximately seven years for
$158.33 per share. Since the purchase price of the put option was equal to the
proceeds form the sale of the call option, the collar transaction had no cash
cost to Liberty Media Group.

         On July 7, 1999, Liberty Media Group issued 7-7/8% Senior Notes due
2009, in the aggregate principal amount of $750 million, and 8-1/2% Senior
Debentures due 2029, in the aggregate principal amount of $500 million. Liberty
Media Group received net cash proceeds from these issuances of $741 million and
$494 million, respectively, which were used to repay outstanding borrowings
under certain credit facilities. On January 13, 2000, Liberty Media Group
completed a registered exchange offer for these securities that provided
tendering holders with identical securities "freely" transferable under the
Securities Act of 1933.

         On July 15, 1999, Liberty Media Group sold to News Corp. its 50%
interest in their jointly owned Fox/Liberty Networks programming venture, in
exchange for 51.8 million News Corp. ADRs representing preferred limited voting
ordinary shares of News Corp., valued at approximately $1.425 billion, or
approximately $27.52 per ADR. In a related transaction, Liberty Media Group
acquired from News Corp. 28.1 million additional ADRs representing preferred
limited voting ordinary shares of News Corp. for approximately $695 million, or
approximately $24.74 per ADR. As a result of these transactions and subsequent
open market purchases, as of March 1, 2000, Liberty Media Group owned
approximately 81.7 million ADRs representing preferred limited voting ordinary
shares of News Corp. or approximately 8% of News Corp.'s ordinary shares on a
fully diluted basis.

         On September 9,1999, TCI Music, Inc. and Liberty Media Group completed
a transaction pursuant to which Liberty Media Group contributed to TCI Music
substantially all of its Internet content and interactive television assets,
certain rights with respect to access to AT&T cable systems for the provision
of interactive active services, and a combination of cash and notes receivable
equal to $150 million, in exchange for preferred and common stock of TCI Music.
Following this transaction, Liberty Media Group owned 95% of TCI Music which
changed its name to Liberty Digital, Inc. In addition, Liberty Media Group
adopted a policy that Liberty Digital would be its primary (but not exclusive)
vehicle to pursue corporate opportunities relating to interactive programming
and interactive content related services in the United States and Canada,
subject to certain exceptions.

         On September 30, 1999, Liberty Media Group purchased 9.9 million class
B shares of UnitedGlobalCom, Inc. for approximately $493 million in cash.
UnitedGlobalCom is a global broadband communications provider of video, voice
and data services with operations in over 20 countries throughout the world. As
part of the transaction, Liberty Media Group expects to form a 50/50 joint
venture or similar arrangement with United Pan-Europe Communications N.V.,
UnitedGlobalCom's European subsidiary, to own the UnitedGlobalCom shares and to
evaluate joint content and distribution opportunities in Europe. Liberty Media

<PAGE>

Group would contribute to the joint venture its 9.9 million class B shares of
UnitedGlobalCom and United Pan-Europe would contribute 5.6 million class A
shares of UnitedGlobalCom. Liberty Media Group expects to assign 50% of its
interest in the joint venture to Microsoft Corporation. In addition to its 25%
interest (after the assignment to Microsoft), Liberty Media Group would receive
approximately $144 million of redeemable preferred interests in the joint
venture. When formed, the joint venture would own approximately 14.5% of the
total outstanding common shares of UnitedGlobalCom on a fully diluted basis.
The joint venture and its members would be bound by voting and standstill
agreements with UnitedGlobalCom and certain of its controlling shareholders.

         On November 16, 1999, Liberty Media Group issued 4% Senior
Exchangeable Debentures due 2029, in the aggregate principal amount of $869
million. Liberty Media Group received net cash proceeds from this issuance of
$854 million. On February 9,2000, the resale of these debentures was registered
under the Securities Act of 1933.

         On December 6, 1999, Liberty Media Group entered into an agreement
with Four Media Company with respect to a transaction pursuant to which Liberty
Media Group would acquire all of the outstanding common stock of Four Media In
exchange for approximately $123 million in cash, the issuance of approximately
3.2 million shares of AT&T Class A Liberty Media Group tracking stock and a
warrant to purchase approximately 350,000 shares of AT&T Class A Liberty Media
Group tracking stock at an exercise price of $46.00 per share. Four Media is a
provider of technical and creative services to owner, producers and
distributors of television programming, feature films and other entertainment
products both domestically and internationally. The transaction with Four Media
is subject to the approval of Four Media's shareholders, as well as other
customary closing conditions and is currently expected to close in the second
quarter of 2000.

         On December 10, 1999, Liberty Media Group entered into an agreement
with the Todd-AO Corporation with respect to a transaction pursuant to which
the liberty Media Group would acquire approximately 60% of the outstanding
equity and 94% of the voting power of Todd in exchange for approximately 3
million shares of AT&T Class A Liberty Media Group tracking stock. Todd
provides sound, video and ancillary post production and distribution services
to the motion picture and television industries in the United States and
Europe. The transaction with Todd is subject to the approval of Todd's
shareholders, as well as other customary closing conditions and is currently
expected to close in the second quarter of 2000.

         On December 30, 1999, Liberty Media Group entered into an agreement
with Soundelux Entertainment Group, Inc. with respect to a transaction pursuant
to which the Liberty Media Group would acquire approximately 55% of the
outstanding equity and 92% of the voting power of Soundelux in exchange for
approximately 2 million shares of AT&T Class A Liberty Media Group tracking
stock.  Soundelux provides video, audio, show production, design and
installation services to location-based entertainment venues and provides
production and post-production sound services, including content, editing,
re-recording and music supervision, to the motion picture, television and
interactive gaming industries. The transaction with Soundelux is subject to the
approval of Soundelux's shareholders and the closing of the Todd transaction, as
well as other customary closing conditions and is currently expected to close in
the second quarter of 2000.

<PAGE>

          Following the acquisitions of majority interests in Todd and Soundelux
and 100% of the voting securities of Four Media, and subject to certain
conditions, the Liberty Media Group has agreed to cause the following additional
transactions to occur: (i) contribution of the Liberty Media Group's controlling
interest in Todd to Soundelux, in exchange for additional shares of voting stock
of Soundelux; (ii) contribution by Soundelux to Todd of 100% of the business and
operations of Soundelux, in exchange for additional shares of voting stock of
Todd and the assumption by Todd of 100% of the liabilities of Soundelux; and
(iii) contribution by the Liberty Media Group to Soundelux, and by Soundelux to
Todd, of 100% of the stock of Four Media. As a result of such transactions, the
assets and operation now owned and operated by Four Media, Soundelux and Todd
would be consolidated within Todd, which would change its name to Liberty
Livewire, Inc. Liberty Livewire would be attributed to Liberty Media Group.

         On December 15, 1999, a trust for Liberty Media Group's benefit entered
into a "cashless collar" with a financial institution with respect to 18
million shares of Sprint PCS stock-Series 1, secured by 18 million shares of
the trust's Sprint PCS stock-Series 2. The Sprint PCS stock-Series 2 is
convertible into the Sprint PCS stock-Series 1 on a one-for-one basis. The
collar consists of a put option that gives the trust the right to require its
counterparty to buy 18 million shares of Sprint PCS stock-Series 1 from the
trust in three tranches in approximately two years for $50 per share. The
counterparty has a call option giving the counterparty the right to buy the
same shares from the trust in three tranches in approximately two years for
$65.23 per share. The put and the call options were equally priced, resulting in
no cash cost to the trust or Liberty Media Group. Share amounts and prices have
been adjusted to reflect a Sprint's February two-for-one stock split.

         On January 5, 2000, General Instrument Corporation merged with
Motorola, Inc. As a result of this merger, Liberty Media Group's 21% interest in
GI was exchange for an approximate 3% interest in Motorola.

         On January 14, 2000, the Liberty Media Group completed its acquisition
of The Associated Group, Inc. pursuant to a  merger agreement among AT&T,
Liberty Media Group and Associated Group. Under the merger agreement, each share
of Associated Group's Class A common stock and Class B common stock was
converted into 0.49634 shares of AT&T common stock and 1.20711 shares of AT&T
Class A Liberty Media Group tracking stock. Prior to the merger, Associated
Group's primary assets were (1) approximately 19.7 million shares of AT&T common
stock, (2) approximately 23.4 million shares of AT&T Class A Liberty Media Group
tracking stock, (3) approximately 5.3 million shares of AT&T Class B Liberty
Media Group tracking stock, (4) approximately 21.4 million shares of common
stock, representing approximately a 40% interest, of Teligent, Inc., a
full-service, facilities-based communications company, and (5) all of the
outstanding shares of common stock of TruePosition, Inc., which provides
location services for wireless carriers and users designed to determine the
location of any wireless transmitters, including cellular and PCS telephones.
Immediately following the completion of the merger, all of the assets and
businesses of Associated Group were transferred to Liberty Media Group. All of
the shares of AT&T common stock, AT&T Class A Liberty Media Group tracking stock
and AT&T Class B Liberty Media Group tracking stock previously held by
Associated Group were retired by AT&T.

         On February 2, 2000, Liberty Media Group issued 8-1/4% Senior
Debentures due 2030, in the aggregate principal amount of $1 billion. Liberty
Media Group received net cash proceeds from this issuance of $983 million.

<PAGE>

Pursuant to a registration rights agreement entered into with the purchasers of
these debentures, Liberty Media Group is required to effect a registered
exchange offer for the debentures which will provide tendering holders with
identical securities "freely" transferable under the Securities Act of 1933.

         On February 7, 2000, Liberty Media Group purchased 18 million shares of
Cendant Corporation common stock and a warrant to purchase up to an additional
approximate 29 million shares of common stock at an exercise price of $23.00
per share (subject to anti-dilution adjustments), which resulted in Liberty
Media Group having an approximate 6.5% ownership interest in Cendant. Liberty
Media Group paid $300 million in cash for the common stock and $100 million in
cash for the warrants. Cendant is primarily engaged in the consumer and
business services industries, with its principal operations in travel related
services, real estate related services and alliance marketing related service.

         On February 10, 2000, Liberty Media Group issued 3-3/4% Senior
Exchangeable Debentures due 2030, in the aggregate principal amount of $750
million. Liberty Media Group received net cash proceeds from this issuance of
$735 million. On March 8, 2000, Liberty Media Group issued an additional $60
million principal amount of its 3-3/4% Senior Exchangeable Debentures due 2030.
Liberty Media Group received net cash proceeds from this issuance of $59
million. Pursuant to a registration rights agreement entered into with the
purchasers of these debentures, the resale of these debentures is required to be
registered under the Securities Act of 1933.

         On February 27, 2000, Liberty Media Group entered into an agreement
with ICG Communication, Inc. pursuant to which Liberty Media Group would
purchase for $500 million (a) 500,000 shares of ICG Communications convertible
preferred stock, which are initially convertible into 17,857,142 shares of ICG
Communications common stock, and (b) warrants to purchase 6,666,667 shares of
ICG Communications common stock at an initial exercise price of $34.00 per
share. This transaction is subject to customer closing conditions.

         On February 29, 2000 Liberty Media Group commenced a cash tender offer
for all of the outstanding common stock of Ascent Entertainment Group, Inc. at a
price of $15.25 per share. Pursuant to a merger agreement entered into with
Ascent on February 22, 2000, if a majority of the outstanding shares of Ascent
are tendered in the offer and the other conditions to the offer are satisfied or
waived, Liberty will acquire control of Ascent and, as soon as practicable
thereafter, will acquire the remaining Ascent shares by merging a subsidiary
into Ascent. This transaction is subject to approval of Ascent's shareholders,
as well as other customary closing conditions. If the merger is effected,
Liberty Media Group expects to pay approximately $460 million for the Ascent
stock. In addition, Ascent will have approximately $295 million in indebtedness
outstanding immediately after the merger. Ascent's principal business is
providing pay-per-view entertainment and information services through its
majority owned subsidiary, On Command Corporations. Ascent also provides
satellite service to the NBC television network and owns the National Basketball
Association's Denver Nuggets, the National Hockey League's Colorado Avalanche
and the Pepsi Center Denver's new entertainment facility which is home to both
the Nuggets and the Avalanche. If is acquires Ascent Liberty Media Group intends
to seek a buyer for the sports teams and the Pepsi Center.

<PAGE>

         On March 16, 2000 Liberty Media Group purchased shares of cumulative
preferred stock in TCI Satellite Entertainment, Inc. ("TSAT") in exchange for
Liberty Media Group's economic interest in 5,084,745 shares of Sprint
Corporation PCS common stock, valued at $300 million. Liberty Media Group
received 150,000 shares of TSAT Series A 12% Cumulative Preferred Stock and
150,000 shares of TSAT Series B 8% Cumulative Convertible Voting Preferred
Stock. The Series A preferred stock does not have voting rights while the Series
B preferred stock gives Liberty Media Group approximately 85% of the voting
power of TSAT. As part of this transaction, Liberty Media Group and TSAT formed
a joint venture named Liberty Satellite, LLC to hold and manage interests in
entities engaged globally in the distribution of internet data and other content
via satellite and related businesses. Liberty Media Group contributed its
interests in XM Satellite Radio Holdings, Inc., iSKY, Inc., Astrolink
International LLC and Sky Latin America in exchange for an approximately 89%
interest in the joint venture. TSAT contributed its interest in JATO
Communications Corp. and General Motors Class H Common Stock in exchange for an
approximately 11% interest in the joint venture which will be managed by TSAT.
In a related transaction, TSAT paid Liberty Media Group $60 million in the form
of an unsecured promissory note in exchange for an approximately 14% interest in
a limited liability company with holdings in Astrolink International LLC. The
remaining 86% of the limited liability company is held by Liberty Satellite,
LLC.

Description of Business

         The following table sets forth information concerning Liberty Media
Group's subsidiaries and business affiliates. Liberty Media Group's interests
are held either directly or indirectly through partnerships, joint ventures,
common stock investments or instruments convertible or exchangeable into common
stock. Ownership percentages in the table are approximate, calculated as of
March 1, 2000, and, where applicable and except as otherwise noted, assume
conversion to common equity by Liberty Media Group and, to the extent known by
Liberty Media Group, other holders. In some cases, Liberty Media Group's
interest may be subject to buy/sell procedures, repurchase rights or, under
certain circumstances, dilution.

<TABLE>
<CAPTION>
                                   SUBSCRIBERS AT
                                      12/31/99                                              ATTRIBUTED OWNERSHIP
       ENTITY                          (000'S)            YEAR LAUNCHED                          % AT 3/1/00
       ------                          -------            -------------                          -----------
                                                     VIDEO PROGRAMMING SERVICES
<S>                                <C>               <C>                                    <C>
BET Holdings II, Inc.                                                                                35%
    BET Cable Network                   58,600                 1980
    BET Action Pay-Per-View             10,000(1)              1990
    BET on Jazz                          7,000                 1996
    BET.com                             Online                 1999                                  50%

Canales n                                   17(2)              1998                                 100%

Court TV                                37,543                 1991                                  50%

Discovery Communications, Inc.                                                                       49%
    Discovery Channel                   77,829                 1985
    The Learning Channel                72,175                 1980
    Animal Planet                       54,018                 1996
    Discovery People                     8,200                 1997
    Travel Channel                      35,466                 1987
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                             SUBSCRIBERS AT
                                                12/31/99                                              ATTRIBUTED OWNERSHIP
       ENTITY                                    (000'S)            YEAR LAUNCHED                          % AT 3/1/00
       ------                                    -------            -------------                          -----------
                                                         VIDEO PROGRAMMING SERVICES (CONTINUED)
<S>                                          <C>              <C>                                     <C>
    Discovery Digital Services                   5,026(2)
       Discovery Civilization                                          1996
       Discovery Health                                                1998
       Discovery Home & Leisure                                        1996
       Discovery Kids                                                  1996
       Discovery Science                                               1996
       Discovery Wings                                                 1998
       Discovery en Espanol                                            1998
    Animal Planet Asia                           6,445                 1998                                     25%
    Animal Planet Europe                         6,328                 1998
    Animal Planet Latin America                  6,774                 1998                                     25%
    Discovery Asia                              37,712                 1994
    Discovery India                             14,100                 1996
    Discovery Japan(3)                           1,542                 1996
    Discovery Europe                            19,155                 1989
    Discovery Turkey                               600                 1997
    Discovery Germany                            1,206                 1996                                     25%
    Discovery Italy/Africa                       1,423                 1996
    Discovery Latin America                     12,145                 1996
    Discovery Latin America Kids Network         8,490                 1996
    People & Arts (Latin America)                9,453                 1995                                     25%
    Discovery Channel  Online                   Online                 1995
    Discovery Home & Leisure (Europe)            5,911

Starz Encore Group LLC                                                                                         100%
    Encore                                      13,745                 1991
    MOVIEplex                                    7,598                 1995
    Thematic Multiplex (aggregate units)        26,012(2)              1994
       Love Stories
       Westerns
       Mystery
       Action
       True Stories
       WAM! America's Kidz Network
    STARZ!                                      10,240                 1994
    STARZ! Multiplex (aggregate units)           6,180(2)
       STARZ! Theater                                                  1996
       BET Movies/STARZ!3                                                                                      88%
       STARZ! Family
       STARZ! cinema                                                   1997
E! Entertainment Television                     59,318                 1990                                    10%
    Style                                        4,630                 1998

Flextech p.l.c. (UK)                                                                                           37%
(LN(4): FLXT)
    Bravo                                        5,188                 1985                                    37%
    Challenge TV                                 5,383                 1993                                    37%
    HSN Direct International                       N/A                 1994                                    42%
    KinderNet                                    5,751                 1988                                    12%
    Living                                       6,175                 1993                                    37%
    SMG                                            N/A                 1957                                     7%
    Trouble                                      5,164                 1984                                    37%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                   SUBSCRIBERS AT
                                      12/31/99                                              ATTRIBUTED OWNERSHIP
       ENTITY                          (000'S)            YEAR LAUNCHED                          % AT 3/1/00
       ------                          -------            -------------                          -----------
                                               VIDEO PROGRAMMING SERVICES (CONTINUED)
<S>                                <C>               <C>                                    <C>
    TV Travel Shop                     7,010                   1998                                  37%
    UK Arena (UKTV)                    3,139                   1997                                  18%
    UK Gold (UKTV)                     6,279                   1992                                  18%
    UK Gold Classics (UKTV)            1,993                   1999                                  18%
    UK Horizons (UKTV)                 4,840                   1997                                  18%
    UK Style (UKTV)                    3,191                   1997                                  18%
    UK Play (UKTV)                     2,450                   1998                                  18%

Fox Kids Worldwide, Inc.                                                                             (5)

International Channel                  8,558                   1990                                  90%

Jupiter Programming Co., Ltd.
  (Japan)                                                                                            50%
    Cable Soft Network                 2,486                   1989                                  50%
    CNBC Japan/Nikkei                    N/A                   1997                                  10%
    Golf Network                       2,076                   1996                                  45%
    Discovery Japan                    1,601                   1996                                  49%
    J-Sports                             697                   1998                                  66%
    Shop Channel                       6,800                   1996                                  41%

MacNeil/Lehrer Productions               N/A                    N/A                                  67%

MultiThematiques, S.A.                                                                               30%
    Canal Jimmy (France)               2,285                   1991
    Canal Jimmy (Italy)                  700                   1997
    Cine Cinemas (France)                729                   1991
    Cine Cinemas (Italy)                 144                   1997
    Cine Classics (France)               631                   1991
    Cine Classics (Spain)                225                   1995                                  15%
    Cine Classics (Italy)                144                   1997
    Forum Planete (France)             1,365                   1997
    Planete (France)                   3,119                   1988
    Planete (Poland)                   1,944                   1996
    Planete (Germany)                  1,206                   1997
    Planete (Italy)                      670                   1997
    Seasons (France)                     106                   1996
    Seasons (Spain)                       37                   1997
    Seasons (Germany)                     35                   1997
    Seasons (Italy)                       46                   1997

The News Corporation Limited                                                                          8%
(NYSE: NWS.A; ASX(4): NCPDP)

Odyssey                               26,920                   1988                                  33%(6)

Pramer S.C.A. (Argentina)                                                                           100%
    America Sports                     2,360                   1990
    Big Channel                        2,352                   1992
    Canal a                            2,268                   1996
    Cineplaneta                        2,038                   1997
    Magic Kids                         3,858                   1995
    P&E                                  781                   1996
    Plus Satelital (fka CV SAT)        3,925                   1988
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                           SUBSCRIBERS AT
                                              12/31/99                                              ATTRIBUTED OWNERSHIP
       ENTITY                                 (000'S)            YEAR LAUNCHED                          % AT 3/1/00
       ------                                 -------            -------------                          -----------
                                                     VIDEO PROGRAMMING SERVICES (CONTINUED)
<S>                                       <C>               <C>                                    <C>
The Premium Movie Partnership                  890                   1995                                   20%
(Australia)

QVC Inc.                                                                                                    43%
    QVC Network                             66,702                   1986
    QVC-The Shopping Channel (UK)            7,867                   1993                                   34%
    QVC-Germany                             16,726                   1996
    iQVC                                    Online                   1995

Telemundo Network                                 (7)                                                       50%
Telemundo Station Group                           (8)                                                       25%

Time Warner Inc. (NYSE: TWX)                                                                                 9%

Torneos y Competencias, S.A                    N/A                    N/A                                   40%

TV Guide, Inc. (Nasdaq: TVGIA)                                                                              44%(9)
    TV Guide Channel                        50,000                   1988
    TV Guide Interactive                          (2)                1998
    TV Guide Sneak Prevue                   34,000                   1991                                   32%
    UVTV                                    57,000(10)                N/A
    Superstar/Netlink                          952                    N/A                                   35%
    TV Guide Magazine                       11,000(11)                N/A
    TV Guide Online                         Online
    The Television Games Network               N/A                   1999                                   43%
    Infomedia SA                               N/A                   1991                                   33%

USA Networks, Inc. (Nasdaq: USAI)              21%(12)
    HSN                                     73,700(13)               1985
    America's Store                          6,800(13)               1986
    Internet Shopping Network               Online                   1995
    HSN en Espanol                           2,700                                                          11%
    HOT (Germany)                           29,000                   1996                                    9%
    Shop Channel (Japan)                     3,370                   1996                                      (3)
    Sci-Fi Channel                          59,700                   1992
    USA Network                             77,200                   1980
    USA Broadcasting                        37,500(14)               1986
    Ticketmaster                                                      N/A
    Studios USA                                                       N/A
    USA Films                                                         N/A
    Hotel Reservations Network              Online                   1991
    (Nasdaq:ROOM)
    Ticketmaster Online-City Search         Online                   1998                                   11%
    (Nasdaq: TMCS)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                HOMES IN           HOMES
                                              SERVICE AREA         PASSED        BASIC SUBS                             ATTRIBUTED
                                              12/31/99(15)      12/31/99(16)     12/31/99(17)        PENETRATION        OWNERSHIP
  ENTITY                                         (000)             (000)            (000)             12/31/99           AT 3/1/00
  ------                                         -----             -----            -----             --------           ---------
                                                                            CABLE AND TELEPHONY

<S>                                           <C>               <C>              <C>                 <C>                <C>
Cable Management Ireland                          130               97               60                  62%               100%

TCI Chile L.P.                                                                                                             100%
    Metropolis-Intercom, S.A                    1,600            1,092              269                  25%                30%

Cablevision S.A.                                4,000            3,386            1,453                  43%                28%
(Argentina)

Grupo Portatel                                                                                                              24%

Jupiter Telecommunications Co., Ltd.
    (Japan)
                                                4,830            3,709              536                  14%                40%

Omnipoint Communications, Inc.
                                                                                                                             3%

Princes Holdings Limited (Ireland)
                                                  497              387              163                  42%                50%

Sprint PCS Group                                                                  5,700                                     24%(18)
(NYSE: PCS)

Liberty Cablevision of Puerto Rico,
    Inc.                                          442              288              108                  38%               100%

Telewest Communications plc (UK)
                                                6,074            4,444            1,156                  26%                22%
(LN(4): TWT) (Nasdaq: TWSTY)

Teligent, Inc.                                                                                                              34%
(Nasdaq:TGNT)

UnitedGlobalCom, Inc.                                                                                                       10%
(Nasdaq: UCOMA)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                                                                                  ATTRIBUTED
                                                                                                                  OWNERSHIP
ENTITY                                           BUSINESS DESCRIPTION                                             AT 3/1/00
------                                           --------------------                                             ---------
                                                 SATELLITE COMMUNICATIONS SERVICES
<S>                                              <C>                                                              <C>
Astrolink International LLC                      Will build a global telecom network using 4 ka-band                  32%
                                                 geostationary satellites to provide broadband data
                                                 communications services.  The first 2 satellites, to be
                                                 launched in 2002, will service customers in North and
                                                 South America, Europe and the Middle East.  The third
                                                 and fourth spacecraft will extend the network worldwide.

iSKY, Inc.                                       Will build a ka-band satellite network that will focus               19%
                                                 on providing broadband services to homes and small
                                                 offices in North America and Latin America.

Sky Latin America                                Satellite delivered television platform currently                    10%
                                                 servicing Mexico, Brazil, Chile and Columbia

TCI Satellite Entertainment, Inc.                Holds interests in certain communications assets                      3% (19)
(Nasdaq:TSATA)                                   including General Motors Class H stock (NYSE:GMH) which
                                                 tracks the performance of Hughes Electronics Corp.,
                                                 owner of DirecTV

XM Satellite Radio, Inc.                         Plans to transmit up to 100 national audio channels of                2%
(Nasdaq:XMSR)                                    music, news, talk, sports and children's programming
                                                 from two satellites directly to vehicle, home and
                                                 portable radios

                                                 TECHNOLOGY AND MANUFACTURING

Antec Corporation                                Manufacturer of products for hybrid fiber/coaxial
(Nasdaq: ANTC)                                   broadband networks                                                   19%

Motorola, Inc.                                   Provider of integrated communications solutions and                   3%
(NYSE: MOT)                                      embedded electronic solutions

TruePosition                                     Provider of wireless location technology and services               100%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                                                                                                    ATTRIBUTED
                                                                                                                    OWNERSHIP
ENTITY                                  BUSINESS DESCRIPTION                                                        AT 3/1/00
                                           INTERNET/INTERACTIVE TELEVISION SERVICES
<S>                                    <C>                                                                         <C>
Broadband NOW, Inc.                     Provides high-speed Internet access and customized broadband content             5%
                                        and applications to subscribers via a private IP network that can
                                        connect such subscribers via multiple broadband technologies, including
                                        DSL, cable modem, wireless and Ethernet


Geocast Network Systems, Inc.           Building a new network that uses digital broadcast infrastructure to deliver      8%
                                        rich media information and programming to the PC desktop

Liberty Digital, Inc.                   A diversified new media company with investments in Internet content and        94%
(Nasdaq: LDIG)                          infrastructure and interactive television

                                                               OTHER

Emmis Communications                    Emmis owns and operates 16 radio stations, including five in the markets        12%
  Corporation                           of New York, Chicago and Los Angeles. Emmis also operates six
(Nasdaq:EMMS)                           television stations and six magazines.

Cendant Corporation                     Cendant is a franchiser of hotels, rental car agencies, tax preparation         7%
(NYSE:CD)                               services and real estate brokerage offices. In direct marketing,
                                        Cendant provides access to insurance, travel, shopping, auto and other
                                        services primarily through its buying clubs. Cendant also provides
                                        vacation time share services, mortgage services and employee relocation.
                                        It operates in over 100 countries.
</TABLE>

-----------------------------------
 (1)  Number of subscribers to whom service is available.

 (2)  Digital services.

 (3)  Liberty Media Group's attributed ownership interest in this entity is
      listed under Jupiter Programming Co., Ltd. ("Jupiter") of which Liberty
      Media International, Inc. owns 50%.

 (4)  LN -- London Stock Exchange; ASX -- Australian Stock Exchange.

 (5)  Liberty Media Group's interest consists of shares of 30-year 9% preferred
      stock which has a stated aggregate value of $345 million and is not
      convertible into common stock.

 (6)  Odyssey will be contributed to Crown Media Holdings in exchange for an
      approximate 18% interest in Crown Media Holdings.

 (7)  Telemundo Network is a 24-hour broadcast network serving 61 markets in
      the United States, including the 37 largest Hispanic markets.

 (8)  Telemundo Station Group owns and operates eight full power UHF broadcast
      stations and 15 low power television stations serving some of the largest
      Hispanic markets in the United States and Puerto Rico.

<PAGE>

 (9)  See "General Development of Business--Video Programming Services--TV
      Guide, Inc." for proposed changes in ownership of TV Guide.

(10)  Aggregate number of units. UVTV uplinks three superstations (WGN, WPIX,
      KTLA) and six Denver broadcast stations. One household subscribing to six
      services would be counted as six "units."

(11)  Magazine circulation -- includes subscription and newsstand distribution.

(12)  Liberty Media Group owns direct and indirect interests in various USAI
      and Home Shopping Network, Inc. securities which may be converted or
      exchanged for USAI common stock. Assuming the conversion or exchange of
      such securities, the conversion or exchange of certain securities owned by
      Universal Studios, Inc. and certain of its affiliates for USAI common
      stock Liberty Media Group would own approximately 21% of USAI.

(13)  Includes broadcast households and cable subscribers.

(14)  A group of UHF and low power television stations which operate in 12 of
      the country's top 22 broadcast markets, including in 7 of the top 10
      markets, which reach approximately 31% of TV households in the U.S.

(15)  Homes in Service Area: The number of homes to which the relevant operating
      company is permitted by law to offer its services. Not all service areas
      are granted exclusively to the respective operating company.

(16)  Homes Passed: Homes that can be connected to a cable distribution system
      without further extension of the distribution network.

(17)  Basic Subscribers: A subscriber to a cable or other television
      distribution system who receives the basic television service and who is
      usually charged a flat monthly rate for a specific number of channels.

(18)  Less than 1% of voting power. Liberty Media Group holds securities of
      Sprint which are exercisable for or convertible into Sprint PCS
      stock-Series 1, which is publicly traded.

(19)  On March 16, 2000, Liberty Media Group acquired 85% voting power in TCI
      Satellite Entertainment.


BUSINESS OPERATIONS

     Liberty Media Group is engaged principally in three fundamental areas of
business:


     *  Programming, consisting principally of interests in video programming
        services:

     * Communications, consisting principally of interests in cable television
       systems and other communications systems; and

     * Internet services and technology.

<PAGE>

         The principal assets and consolidated subsidiaries of Liberty Media
Group are described in greater detail below.

          VIDEO PROGRAMMING SERVICES

         Programming networks distribute their services through a number of
distribution technologies, including cable television, direct-to-home satellite,
broadcast television and the Internet. Programming services may be delivered to
subscribers as part of a video distributor's basic package of programming
services for a fixed monthly fee, or may be delivered as a "premium" programming
service for an additional monthly charge. Whether a programming service is on a
basic or premium tier, the programmer generally enters into separate multi-year
agreements, known as "affiliation agreements," with those distributors that
agree to carry the service. Basic programming services derive their revenues
principally from the sale of advertising time on their networks and from per
subscriber license fees received from distributors. Premium services do not sell
advertising and primarily generate their revenues from subscriber fees.

         Relationship with AT&T Broadband. Most of the networks affiliated with
Liberty Media Group have entered into affiliation agreements with Satellite
Services, Inc. ("SSI") a company within AT&T Broadband, the successor company to
TCI. SSI purchases programming services from programming suppliers and then
makes such services available to cable television systems owned by or affiliated
with AT&T Broadband ("SSI Affiliates"). Customers served by SSI Affiliates ("SSI
Subscribers") represented approximately 25% of U.S. households which received
cable or satellite delivered programming at December 31, 1999. Except as
described below, substantially all of the video programming services operated by
Liberty's subsidiaries and business affiliates received less than 25% of their
revenues from AT&T Broadband. Each of Starz Encore Group and Liberty Digital,
Inc. has entered into long term, fixed rate affiliation agreements with AT&T
Broadband pursuant to which AT&T Broadband pays monthly fixed amounts in
exchange for unlimited access to certain programming services of such companies.
For the year ended December 31, 1999, such fixed rate affiliation fees
represented approximately 37% and 28% of the total revenues of Starz Encore
Group and Liberty Digital, respectively.

         STARZ ENCORE GROUP LLC

         Starz Encore Group LLC provides cable and satellite-delivered premium
movie networks in the United States. It currently owns and operates 13 full-time
domestic movie channels, including Encore, which airs first-run movies and
classic contemporary movies, STARZ!, a first-run premium movie service and its
four multiplex channels, six digital movie services programmed by theme ("Encore
Thematic Multiplex"), and MOVIEplex, a "theme-by-day" channel featuring a
different Encore or Encore Thematic Multiplex channel each day, on a weekly
rotation. Starz Encore Group currently has agreements in place with most of the
major program distributors and many smaller distributors to carry its Encore
Thematic Multiplex services in digital packages.

         Starz Encore Group currently has access to approximately 5,700 movies
through long-term library licensing agreements. In addition, it has licensed the
exclusive rights to first-run output from Disney's Hollywood Pictures,
Touchstone and Miramax, Universal Studios, New Line and Fine Line, Sony's
Columbia Pictures and Sony Classics and other major studios. Starz Encore Group
also has exclusive rights to first run output from four independent studios. The
output agreements expire between 2003 and 2011. Unlike vertically integrated
programmers, Starz Encore Group is not committed to or dependent on any one
source of film productions. As a result, it has affiliations with every major
Hollywood studio, through long-term output or library agreements. Additionally,
Starz Encore Group is involved in several original programming productions.

<PAGE>

     PRAMER S.C.A.

     Pramer S.C.A. is the largest owner and distributor of cable television
programming services in Argentina. Pramer currently owns eight programming
services and distributes them throughout Argentina. Pramer also distributes
eight additional programming services in which it does not have an ownership
interest, including two of Argentina's four terrestrial broadcast stations,
throughout Argentina. Of the 16 programming services owned and/or distributed by
Pramer, nine of them are distributed throughout Latin America. Pramer intends to
continue to develop and acquire branded programming services and to further
expand the carriage of its programming to distribution networks outside
Argentina.

DISCOVERY COMMUNICATIONS, INC.

Discovery Communications, Inc. is the largest originator of documentary,
nonfiction programming in the world. Since its 1985 launch of Discovery Channel,
Discovery has grown into a global media enterprise with 1999 revenues of $1.4
billion. It currently operates programming services reaching more than 160
million people across six continents.

Discovery's programming, products and services derive from the following three
business units:

-    Discovery Networks, U.S., which is comprised of Discovery Channel, The
     Learning Channel, Animal Planet, The Travel Channel, Discovery Health
     Channel and a package of six digital services;

-    Discovery Networks International, which extends Discovery's programming
     globally and currently reaches more than 85 million subscribers in 147
     foreign countries in 24 languages; and

-    Discovery Enterprises Worldwide, which includes Discovery's brand extension
     business in retail, online, video, multimedia, publishing, licensing and
     education.

     Terms of Ownership. Discovery is organized as a close corporation managed
by its stockholders rather than a board of directors. Generally, all actions to
be taken by Discovery require the approval of the holders of a majority of
Discovery's shares, subject to certain exceptions, including certain fundamental
actions, which require the approval of the holders of at least 80% of
Discovery's shares. The stockholders of Discovery have agreed that they will not
be required to make additional capital contributions to Discovery unless they
all consent. They have also agreed not to own another basic programming service
carried by domestic cable systems that consists primarily of documentary science
and nature programming, subject to certain exceptions.

     Each stockholder has been granted preemptive rights on share issuances by
Discovery. Any proposed transfer of Discovery shares by a stockholder will be
subject to rights of first refusal in favor of the other stockholders, subject
to certain exceptions, with Liberty Media Group's right of first refusal being
secondary under certain circumstances. In addition, Liberty Media Group is not
permitted to hold in excess of 50% of Discovery's stock unless its increased
ownership results from exercises of its preemptive rights or rights of first
refusal.

<PAGE>

     FLEXTECH, PLC

     Flextech, through its subsidiaries and affiliates, creates, packages and
markets entertainment and information programming for distribution on cable
television, direct-to-home satellite and digital terrestrial television
providers throughout the United Kingdom and parts of continental Europe. By
acquiring interests in and establishing alliances among providers of a variety
of entertainment programming, Flextech has been able to achieve significant
economies of scale and establish itself as a major low-cost provider of
European television programming. Flextech has interests in 14 cable and
satellite channels, 13 of which are distributed in the United Kingdom market.
In addition to managing its five wholly owned programming services, Flextech
currently provides management services to two joint ventures that it has formed
with BBC Worldwide Limited, which operate several subscription television
channels, and to Discovery Europe, Animal Planet Europe, Discovery Home and
Leisure (formerly The Learning Channel) and HSN Direct International Limited.
For its management and consultancy services, Flextech receives a management fee
and, in some cases, a percentage of the programming company's gross revenues.
Flextech also holds interests in programming production and distribution
companies and a terrestrial broadcast network. Flextech's ordinary shares trade
on the London Stock Exchange under the symbol "FLXT."

     Terms of Ownership. Liberty Media Group has the right to appoint two
members of Flextech's board of directors for so long as it owns at least 25% of
Flextech's ordinary shares. In addition, the appointment of some of Flextech's
senior executive officers, including its managing director and its chief
executive, requires Liberty Media Group's approval.

     Liberty Media Group has undertaken to Flextech and BBC Worldwide Limited
that it will not, subject to certain exceptions, acquire an interest in excess
of 20% in any entity that competes with certain of the channels of the two
joint ventures that Flextech has formed with BBC Worldwide Limited. The
non-compete will terminate on March 31, 2007 or, if earlier, at such time as
Liberty Media Group's contingent funding obligation to the joint ventures
terminates or Liberty Media Group owns not more than 10% of the ordinary shares
of Flextech.

     On March 7, 2000, Telewest offered to acquire Flextech at a purchase price
of approximately Pounds Sterling 2.76 billion. Pursuant to the offer by
Telewest, each share of Flextech would be exchanged for 3.78 new Telewest
shares. Liberty Media Group owns approximately a 37% equity interest in
Flextech and a 22% equity interest in Telewest. See "-Communications-Telewest
Communications plc" below. The proposed acquisition is subject to approval of
the shareholders of Telewest, acceptance of the offer by the shareholders of
Flextech and certain other conditions. Liberty Media Group, as a shareholder of
Flextech, has agreed to tender its Flextech shares, subject to certain
conditions. Otherwise, Liberty Media Group has agreed with Telewest not to
dispose of any of Liberty Media Group's interest in Flextech through March 31,
2000. Liberty Media Group, MediaOne and Microsoft as shareholders of
approximately 51% of Telewest, in the aggregate, have agreed to vote in favor
of resolutions put to Telewest shareholders in connection with the offer to the
extent applicable law and stock exchange rules permit them to do so. Because of
Liberty Media Group's holdings, the Listing Rules of the London Stock Exchange
require a separate vote by Telewest's shareholders, excluding Liberty Media
Group, to approve Telewest's acquisition of Liberty Media Group's interests in
Flextech in the merger. MediaOne and Microsoft have agreed to vote in favor of
this acquisition.

<PAGE>

     THE NEWS CORPORATION LIMITED

     New Corp. is a diversified international communications company
principally engaged in:

-    the production and distribution of motion pictures and television
     programming;

-    television, satellite and cable broadcasting;

-    publication of newspapers, magazines and books;

-    production and distribution of promotional and advertising products and
     services;

-    development of digital broadcasting;

-    development of conditional access and subscriber management systems; and

-    the provision of computer information services.

News Corp.'s operations are located in the United States, Canada, the United
Kingdom, Australia, Latin America and the Pacific Basin. News Corp's preferred
limited voting ordinary shares trade on the Australian Stock Exchange under the
symbol "NCPDP," and are represented on the NYSE by ADRs under the symbol
"NWS.A."

     In July 1999, Liberty Media Group sold to News Corp. its 50% interest in
their jointly owned Fox/Liberty Networks sports programming venture, in
exchange for 51.8 million News Corp. ADRs representing preferred limited voting
ordinary shares of News Corp., valued at approximately $1.425 billion, or
approximately $27.52 per ADR. In a related transaction, Liberty Media Group
acquired from News Corp. 28.1 million additional ADRs representing preferred
limited voting ordinary shares of News Corp. for approximately $695 million, or
approximately $24.74 per ADR. As a result of these transactions and subsequent
open market purchases, as of March 1, 2000, Liberty Media Group owned
approximately 81.7 million ADRs representing preferred limited voting ordinary
shares of News Corp. or approximately 8% of News Corp.'s ordinary shares, on a
fully diluted basis.

     Liberty Media Group's involvement in sports programming originated in 1988
when TCI began to pursue a strategy of creating regional sports networks. In
April 1996, Liberty Media Group and New Corp. formed Fox/Liberty Networks, a
joint venture to hold Liberty Media Group's national and regional sports
networks and News Corp.'s FX, a general entertainment network which also
carries various sporting events. Also in 1996, Liberty Media Group and News
Corp. formed an alliance to hold  their respective international sports
interests (the "International Interests"). These include Fox Sports World
Espanol, a Spanish language sports network, distributed in  the United States
and Latin America, as well as Fox Sports Americas (Latin America) and Fox
Sports Middle East. As part of their agreement relating to the acquisition by
News Corp. of Liberty Media Group's interest in Fox/Liberty Networks, Liberty
Media Group and News Corp. agreed that, during a specified period following the
second anniversary of the closing date of this transactions, each will have the
right to cause News Corp. to acquire and Liberty Media Group to sell to News

<PAGE>

Corp. the International interests in exchange for News Corp. ADRs with an
aggregate value at April 1, 1999 of approximately $100 million plus an
additional number of ADRs representing the aggregate number of News Corp.
shares which could have been purchased by reinvesting in ADRs each cash
dividend declared on such number of shares between the closing of the sale of
Liberty Media Group's interest in Fox/Liberty Networks and the sale  of the
International Interests. Between the closing of the sale of Liberty Media
Group's interest in Fox/Liberty Networks and the sale of the International
Interests, Liberty Media Group has further agreed to make capital contributions
in respect of the International Interests in the amount of $100 million, as and
when requested by News Corp.

     Terms of Ownership. In connection with the acquisition by News Corp. of
Liberty Media Group's interest in Fox/Liberty Networks, certain agreements were
entered into regarding Liberty Media Group's ability to transfer News Corp.
shares and other matters. Under these agreements, the ADRs and the underlying
News Corp. shares issued to Liberty Media Group are subject to a lock-up of
either two years (as to 51.8 million ADRs) or nine months (as to 28.1 million
ADRs), subject to certain exceptions. Liberty Media Group is entitled to
certain registration rights with respect to its News Corp. shares. In addition,
Liberty Media Group has agreed that it will not engage, directly or indirectly,
in any sports programming service in the United States and its territories
(excluding Puerto Rico) or in Canada, subject to certain exceptions, until July
2004.

     QVC INC.

     QVC Inc. is one of the two largest home shopping companies in the United
States. QVC markets and sells a wide variety of consumer products and
accessories primarily by means of televised shopping programs on the QVC
network and via the Internet through iQVC. QVC also operates shopping networks
in Germany, the United Kingdom and Ireland. QVC purchases, or obtains on
consignment, products from domestic and foreign manufacturers and wholesalers,
often on favorable terms based on the volume of the transactions. QVC does not
depend upon any one particular supplier for any significant portion of its
inventory.

     QVC distributes its television programs, via satellite, to affiliated
video program distributors for transmission to subscribers. In return for
carrying QVC, each domestic programming distributor receives an allocated
portion, based upon market share, of up to 5% of the net sales of merchandise
sold to customers located in the programming distributor's service area.

     Terms of Ownership. Liberty Media Group owns approximately 43% of QVC, and
Comcast owns the remaining 57%. QVC is managed on a day-to-day basis by Comcast
and Comcast has the right to appoint all of the members of the QVC board of
directors. Liberty Media Group's interests are represented by two members on
QVC's five-member management committee.  Generally, QVC's management committee
votes on every matter submitted, or required to be submitted, to a vote of the
QVC board, and Liberty Media Group and Comcast are required to use their best
efforts to cause QVC to follow the direction of any resolution of the
management committee. Liberty Media Group also has veto rights with respect to
certain fundamental actions proposed to be taken by QVC.

     Liberty Media Group has been granted a tag-along right that will apply if
Comcast proposes to transfer control of QVC and Comcast may require Liberty

<PAGE>

Media Group to sell its QVC stock as part of the transaction, under certain
circumstances and subject to certain conditions. In addition, under certain
circumstances, Liberty Media Group has the right to initiate a put/call
procedure with Comcast in respect of Liberty Media Group's interest in QVC.

     Liberty Media Group and Comcast have certain mutual rights of first
refusal and mutual rights to purchase the other party's QVC stock following
certain events, including change of control events affecting them. Both also
have registration rights.

     TIME WARNER, INC.

     Time Warner is one of the largest media and entertainment companies in
the world. Time Warner classifies its business interests into four fundamental
areas:

-    Cable Networks, consisting principally of interests in cable television
     programming, including the following networks: CNN, Cartoon Network,
     Headline News, TNT, Turner Classic Movies, TBS Superstation, CNNfn, HBO,
     Cinemax, Comedy Central and TVKO;

-    Publishing, consisting principally of interests in magazine publishing,
     book publishing and direct marketing;

-    Entertainment, consisting principally of interests in filmed entertainment,
     television production, television broadcasting, recorded music and music
     publishing; and

-    Cable, consisting principally of interests in cable television systems
     which, as of December 31, 1999, reached approximately 12.6 million
     subscribers.

Time Warner's common stock trades on the NYSE under the symbol "TWX."

     In connection with the 1996 Turner Broadcasting System/Time Warner merger,
Time Warner, Turner Broadcasting System, TCI and Liberty Media Group entered
into an Agreement Containing Consent Order (the "FTC Consent Decree") with the
Federal Trade Commission ("FTC"). The FTC Consent Decree effectively prohibits
Liberty Media Group and its affiliates from owning voting securities of Time
Warner other than securities that have limited voting rights. Pursuant to the
FTC Consent Decree, among other things, Liberty Media Group agreed to exchange
the shares of Time Warner common stock it was to receive in the Turner
Broadcasting System/Time Warner merger for shares of a separate series of Time
Warner common stock with limited voting rights designated as Series LMCN-V
Common Stock. The Series LMCN-V Common Stock entitles the holder to one
one-hundredth (1/100th) of a vote for each share with respect to the election of
directors. Liberty Media Group holds approximately 114 million shares of such
stock, which represent less than 1% of the voting power of Time Warner's
outstanding common stock. The Series LMCN-V Common Stock is not transferable,
except in limited circumstances, and is not listed on any securities exchange.
Each share of the Series LMCN-V Common Stock is convertible at Liberty Media
Group's option into one share of ordinary Time Warner common stock, at any time
when such conversion would not violate the federal communications laws, subject
to the FTC Consent Decree, and is mandatorily convertible into ordinary Time
Warner common stock upon transfer to a non-affiliate of Liberty Media Group.
Further, while shares of ordinary Time Warner common stock are redeemable by

<PAGE>

action of the Time Warner board of directors under certain circumstances, to the
extent necessary to prevent the loss of certain types of governmental licenses
or franchises, shares of Series LMCN-V Common Stock are not redeemable under
these circumstances.

         On January 10, 2000, Time Warner and America Online, Inc. announced
that they had entered into an Agreement and Plan of Merger relating to the
combination of their businesses. Pursuant to this Agreement and Plan of Merger,
Time Warner and America Online would each merge with, and become wholly-owned
subsidiaries of, a newly-formed holding company called "AOL Time Warner Inc."
According to publicly available information, in this transaction each share of
Series LMCN-V Common Stock of Time Warner held by Liberty Media Group would be
converted into 1.5 shares of a new Series LMCN-V Common Stock of AOL Time Warner
Inc. These securities of AOL Time Warner Inc. would have substantially the same
terms as the Series LMCN-V Common Stock of Time Warner currently held by Liberty
Media Group. This transaction is subject to several conditions, including the
approval of Time Warner's and America Online's stockholders, as well as
regulatory approvals.

         TV GUIDE, INC.

         TV Guide, Inc., formerly named United Video Satellite Group, Inc., is a
media and communications company that provides print, passive and interactive
program listings guides to households, distributes programming to cable
television systems and direct-to-home satellite providers, and markets
satellite-delivered programming to C-band satellite dish owners. TV Guide's
Class A common stock trades on the National Market tier of The Nasdaq Stock
Market under the symbol "TVGIA."

-        TV Guide is organized into three primary business units:

-        TV Guide Magazine Group,

-        TV Guide Entertainment Group, and

-        United Video Group.

The TV Guide Magazine Group publishes and distributes TV Guide magazine, the
most widely circulated paid weekly magazine in the United States, to households
and newsstands. In addition, the TV Guide Magazine Group provides customized
monthly television programming guides for cable and satellite operators. The TV
Guide Entertainment Group supplies satellite-delivered on-screen program
promotion and guide services, including TV Guide Channel and Sneak Prevue, to
cable television systems and other multi-channel video programming distributors,
both nationally and internationally. The TV Guide Entertainment Group also
offers interactive television technology that allows television viewers to
retrieve on demand continuously updated program guide information through their
cable television systems and provides TV Guide Online, an Internet-based program
listings guide. The United Video Group provides direct-to-home satellite
services, satellite distribution of video entertainment services, software
development and systems integration services and satellite transmission services
for private networks. This group owns TV Guide's 80% interest in
Superstar/Netlink Group LLC, which markets satellite entertainment programming
packages to C-band satellite dish owners in the United States. Its retail
subscriber base was approximately one million at December 31, 1999. In November

<PAGE>

1999, TV Guide announced an exclusive direct broadcast satellite marketing
alliance agreement with EchoStar to convert the existing and inactive C-band
customers of Superstar/Netlink to the high power (small satellite dish) DISH
Network Service. Under the conversion process, EchoStar will compensate
Superstar/Netlink Group on a per subscriber base, both upon successful
conversion and with residual payments over time. The United Video Group also
markets and distributes three independent superstations -- WGN (Chicago), KTLA
(Los Angeles) and WPIX (New York) -- and six Denver-based broadcast television
stations to cable television systems and other multi-channel video programming
distributors, and offers programming packages to satellite master antenna
television systems.

         TV Guide is jointly controlled by Liberty Media Group and News Corp.,
with each owning approximately 44% of its equity and 49% of its voting power.
Liberty Media Group's interest in TV Guide began in January 1996 when TCI
acquired a controlling interest in Untied Video Satellite Group, Inc. ("UVSG"),
a provider of satellite-delivered video, audio, data and program promotion
services to cable television systems, satellite dish owners, radio stations and
private network users primarily throughout North America. In January 1998, TCI
increased its equity interest in UVSG to approximately 73% and its voting
interest to approximately 93%. On March 1, 1999, UVSG acquired Liberty Media
Group's 40% interest in Superstar/Netlink Group and its 100% interest in Netlink
USA, which uplinks the signals of six Denver-based broadcast television
stations, in exchange for shares of UVSG common stock. On the same date, UVSG
acquired News Corp.'s TV Guide properties in exchange for cash and shares of
UVSG common stock. By combining UVSG's passive and interactive electronic
program listing guides with TV Guide's well-recognized magazine and brand name,
UVSG became a leading provider of program listing guides. Following this
transaction, UVSG changed its name to TV Guide, Inc.

         In October 1999, TV Guide announced that it had entered into a
definitive merger agreement with Gemstar International Group Limited, pursuant
to which TV Guide would become a wholly owned subsidiary of Gemstar. Under the
merger agreement, TV Guide shareholders would receive 0.6573 shares of Gemstar
common stock for each share of TV Guide common stock. TV Guide shareholders
would, in the aggregate, receive approximately 45% of the fully diluted shares
of the combined company. Consummation of the transaction is subject to limited
conditions, including approval by the shareholders of each company (which was
received on March 17, 2000) and the satisfaction of regulatory requirements. It
is anticipated that the transaction will close in the first half of 2000. Upon
consummation of the transaction, the company is expected to be renamed TV Guide
International Inc. and the board of directors will be expanded to twelve
members, of which 6 members will be persons designated by the board of directors
of TV Guide prior to the merger.

         Gemstar develops, markets and licenses proprietary technologies and
systems that simplify and enhance consumers' interaction with electronics
products and other platforms that deliver video, programming information and
other data. Gemstar seeks to have its technologies widely licensed, incorporated
and accepted as the technologies and systems of choice by

-        consumer electronics manufacturers,

-        service providers such as owners or operators of cable systems,
         telephone networks, Internet service providers, direct broadcast
         satellite providers, wireless systems and other multi-channel video
         programming distributors,

-        software developers and

-        consumers.
<PAGE>
         Gemstar's first proprietary system, VCR Plus+, was introduced in 1990
and is widely accepted as an industry standard for programming VCRs. VCR Plus+
enables consumers to record a television program by entering a number -- the
PlusCode number -- into a VCR or television equipped with the VCR Plus+
technology. Gemstar is also a leading provider of interactive program guide
services, which allow a user to view a television program guide on screen,
obtain details about a program, sort programs by themes or categories, and
select programs for tuning or recording through the remote control. Gemstar's
common stock trades on the National Market tier of The Nasdaq Stock Market under
the symbol "GMST."

         Terms of Ownership. Pursuant to a stockholders agreement between
Liberty Media Group and News Corp., each of them is entitled to designate one
director to the ten-member TV Guide board for each 12.5% of the outstanding
shares of TV Guide Class B common stock owned by such party, with the remaining
directors being designated by the TV Guide board. So long as Liberty Media Group
or News Corp., as the case may be, is entitled to designate at least one
director to TV Guide's board of directors, the other party is subject to certain
restrictions on its ability to sell any of its shares of TV Guide common stock
or to convert any of its shares of TV Guide Class B common stock (10 votes per
share) into shares of TV Guide Class A common stock (one vote per share) unless
it first offers to sell the stock to the other party. In addition, Liberty Media
Group and News Corp. have mutual rights of first refusal, tag-along rights on
transfers of significant interests and registration rights. Liberty Media Group
and News Corp. have further agreed that, for so long as they both are entitled
to appoint at least one of TV Guide's directors, TV Guide will be the exclusive
vehicle through which they will each conduct program guide businesses worldwide,
subject to certain limited exceptions.

         USA NETWORKS, INC.

         USA Networks, through its subsidiaries, is a diversified media and
electronic commerce company that is engaged in seven principal areas of
business:

-        Networks and Television Production, which operates USA Network, a
         general entertainment basic cable television network, Sci-Fi Channel,
         which features science fiction, horror, fantasy and science-fact
         oriented programming, and Studios USA, which produces and distributes
         television programming;

-        Electronic Retailing, which primarily consists of Home Shopping Network
         and America's Store, which are engaged in the electronic retailing
         business;

-        Broadcasting, which owns and operates television stations;

-        Ticketing Operations, which includes Ticketmaster, the leading provider
         of automated ticketing services in the United States, and
         Ticketmaster.com, Ticketmaster's exclusive agent for online ticket
         sales;

-        Hotel Reservations, consisting of Hotel Reservations Network, a leading
         consolidator of hotel rooms for resale in the consumer market in the
         United States;

-        Internet Services, which includes the Internet Shopping Network, USA
         Networks' online retailing networks business and local city guide
         business; and

-        Filmed Entertainment, which primarily represents USA Networks' domestic
         theatrical film distribution and production businesses.

<PAGE>

USA Networks' common stock trades on the National Market tier of The Nasdaq
Stock Market under the symbol "USAI."

         Liberty Media Group's interest in USA Networks consists of shares of
USA Networks common stock held by Liberty Media Group and its subsidiaries,
shares of USA Networks common stock held by certain entities in which Liberty
Media Group has an equity interest but only limited voting rights, and
securities of certain subsidiaries of USA Networks which are exchangeable for
shares of USA Networks common stock. Assuming the exchange of these securities
and the conversion or exchange of certain securities owned by Universal Studios,
Inc. ("Universal") and certain of its affiliates for USA Networks common stock,
Liberty Media Group and Universal would own approximately 21% and 45%,
respectively, of USA Networks. In general, until the occurrence of certain
events and with the exception of certain negative controls, Mr. Barry Diller has
voting power over Liberty Media Group's interest in USA Networks, as more fully
described below.

         Terms of Ownership. USA Networks, Universal, Liberty Media Group and
Mr. Diller have entered into several agreements involving governance matters
relating to USA Networks and stockholder arrangements. With respect to
governance matters, Mr. Diller generally has full authority to operate the
day-to-day business affairs of USA Networks and has an irrevocable proxy over
all USA Networks securities owned by Universal, Liberty Media Group and certain
of their affiliates for all matters except for certain fundamental changes.
However, each of Liberty Media Group, Universal and Mr. Diller has veto rights
with respect to certain fundamental changes relating to USA Networks and its
subsidiaries (including USANi LLC, which was formed to hold USA Networks'
non-broadcast businesses). If Mr. Diller and Universal agree to certain
fundamental changes that Liberty Media Group does not agree to, Universal will
be entitled to purchase Liberty Media Group's entire equity interest in USA
Networks, subject to certain conditions, at a price determined by an independent
appraiser taking into account a number of agreed upon factors.

         Pursuant to FCC law and regulations, Liberty Media Group is not
currently permitted to have a designee on the board of directors of USA
Networks. However, at such time as Liberty Media Group is no longer subject to
such prohibition, Liberty Media Group will have the right to designate up to two
directors if its stock ownership in USA Networks remains at certain levels.
Liberty Media Group currently has the right to designate up to two directors to
the USANi LLC board and will continue to have that right for so long as it is
not permitted to designate directors of USA Networks and continues to maintain
certain ownership levels.

         Each of Universal and Liberty Media Group has a preemptive right with
respect to future issuances of USA Network's capital stock, subject to certain
limitations. Liberty Media Group has agreed to certain limitations on increases
in its percentage of ownership of USA Networks. Also, Liberty Media Group has
agreed not to propose to the board of directors of USA Networks the acquisition
by Liberty Media Group of the outstanding USA Networks securities or to
otherwise influence the management of USA Networks, including by proposing or
supporting certain transactions relating to USA Networks that are not supported
by USA Networks' board of directors.

         Liberty Media Group is subject to a number of agreements that limit or
control its ability to transfer its USA Network securities. As long as Mr.
Diller is Chief Executive Officer of USA Networks, Liberty Media Group generally

<PAGE>

cannot transfer shares of USA Networks stock prior to August 24, 2000, subject
to certain exceptions. Each of Universal and Mr. Diller has a right of first
refusal with respect to certain sales of USA Networks securities by the other
party. Liberty Media Group's rights in this regard are secondary to any
Universal right of refusal on transfers by Mr. Diller. Each of Liberty Media
Group and Mr. Diller also generally has a right of first refusal with respect to
certain transfers by the other party and tag-along sale rights on certain sales
of USA Networks stock by the transferring stockholder and in the event Universal
transfers a substantial amount of its USA Networks stock. Liberty Media Group,
Universal and Mr. Diller are each entitled to registration rights relating to
their USA Networks securities and have agreed to certain put and call
arrangements, pursuant to which one party has the right to sell (or the other
party has the right to acquire) shares of USA Networks stock held by another
party, at a price determined by an independent appraiser taking into account a
number of agreed upon factors.

         COMMUNICATIONS

         Cable television systems deliver multiple channels of television
programming to subscribers who pay a monthly fee for the service. Video, audio
and data signals are received over-the-air or via satellite delivery by
antennas, microwave relay stations and satellite earth stations and are
modulated, amplified and distributed over a network of coaxial and fiber optic
cable to the subscribers' television sets. Cable television providers in most
markets are currently upgrading their cable systems to deliver new technologies,
products and services to their customers. These upgraded systems allow cable
operators to expand channel offerings, add new digital video services, offer
high-speed data services and, where permitted, provide telephony services. The
implementation of digital technology significantly enhances the quantity and
quality of channel offerings, allows the cable operator to offer
video-on-demand, additional pay-per-view offerings, premium services and
incremental niche programming. Upgraded systems also enable cable networks to
transmit data and gain access to the Internet at significantly faster speeds, up
to 100 times faster, than data can be transmitted over conventional dial-up
connections. Lastly, cable providers have been developing the capability to
provide telephony services to residential and commercial users at rates well
below those offered by incumbent telephone providers.

         Telephony providers offer local, long distance, switched services,
private line and advanced networking features to customers who pay a monthly fee
for the service, generally based on usage. Wireless telecommunications networks
use a variety of radio frequencies to transmit voice and data in place of, or in
addition to, standard landline telephone networks. Wireless telecommunications
technologies include two-way radio applications, such as cellular, personal
communications services, specialized mobile radio and enhanced specialized
mobile radio networks, and one-way radio applications, such as paging services.
Each application operates within a distinct radio frequency block. As a result
of advances in digital technology, digital-based wireless system operators are
able to offer enhanced services, such as integrated voicemail, enhanced
custom-calling and short-messaging, high-speed data transmissions to and from
computers, advanced paging services, facsimile services and Internet access
service. Wireless subscribers generally are charged for service activation,
monthly access, air time, long distance calls and custom-calling features.
Wireless system operators pay fees to local exchange companies for access to
their networks and toll charges based on standard or negotiated rates. When

<PAGE>

wireless operators provide service to roamers from other systems, they generally
charge roamer air time usage rates, which usually are higher than standard air
time usage rates for their own subscribers, and additionally may charge daily
access fees.

         LIBERTY CABLEVISION OF PUERTO RICO, INC.

         Liberty Cablevision of Puerto Rico, Inc. is one of the largest
providers of cable television services in Puerto Rico. It owns and operates
cable television franchises, serving the communities of Luquillo, Arecibo,
Florida, Caguas, Humacao, Cayey and Barranquitas.

         On September 21, 1998, hurricane Georges struck Puerto Rico and caused
considerable property damage to the area in general, including Liberty
Cablevision of Puerto Rico's cable television systems. However, all of Liberty
Cablevision of Puerto Rico's systems have been rebuilt, and as of December 31,
1999, all of its pre-hurricane basic customers were receiving cable television
services.

         As of December 31, 1999, approximately 85% of Liberty Cablevision of
Puerto Rico's network had been rebuilt utilizing 550 MHz bandwidth capacity,
with the remainder consisting of 450 MHz. At December 31, 1999, Liberty
Cablevision of Puerto Rico operated from five headends, and provided subscribers
with 63 channels.

         A significant portion of Liberty Cablevision of Puerto Rico's cable
network consists of fiber-optic and coaxial cable. This infrastructure allows
Liberty Cablevision of Puerto Rico to offer enhanced entertainment, information
and telecommunications services and, when and to the extent permitted by law,
cable telephony services. Liberty Cablevision of Puerto Rico currently offers
its subscribers pay-per-view events and premium movies and as it introduces new
revenue generating products and services, such as interactive services, Liberty
Cablevision of Puerto Rico expects to aggressively market those products and
services to its subscribers in areas with sufficient bandwidth capacity. Liberty
Cablevision of Puerto Rico expects to begin offering high speed data
transmission services and Internet access using high speed cable modems to its
subscribers during the first half of 2001.

         SPRINT PCS GROUP

         Sprint Corporation operates the only 100% digital PCS wireless network
in the United States with licenses to provide service nationwide utilizing a
single frequency band and a single technology. Sprint owns licenses to provide
service to the entire United States population, including Puerto Rico and the
U.S. Virgin Islands. At December 31, 1999, Sprint, together with certain
affiliates, operated PCS systems in the majority of the metropolitan areas in
the U.S. At that date, Sprint served more than 4,000 cities and communities and
had approximately 5.7 million customers. Sprint attributes this business and its
assets to Sprint's "Sprint PCS Group." The Sprint PCS stock is a tracking stock
intended to reflect the performance of the Sprint PCS Group.
The Sprint PCS stock-Series 1 trades on the NYSE under the symbol "PCS."

         On October 5, 1999, Sprint announced that it had entered into a
definitive merger agreement with MCI WorldCom, Inc. Under the merger agreement,
each share of Sprint's FON common stock would be exchanged for $76.00 of MCI

<PAGE>

WorldCom common stock, subject to a collar, and each share of Sprint PCS
stock-Series 1, Sprint PCS stock-Series 2 and Sprint PCS stock-Series 3 would be
exchanged for one share of a new MCI WorldCom PCS tracking stock of the
corresponding series and 0.116025 shares of MCI WorldCom common stock. The terms
of each series of MCI WorldCom PCS tracking stock would be equivalent to those
of the corresponding Sprint security and would track the performance of the PCS
business of the surviving company. The merger would be tax free to stockholders
of Sprint and accounted for as a purchase. Consummation of the merger is subject
to the approvals of the stockholders of Sprint and MCI WorldCom as well as
customary regulatory approvals. Upon consummation of the merger, the company is
expected to be renamed WorldCom and its board of directors is to have 16
members, 10 from MCI WorldCom and 6 from Sprint.

         Liberty Media Group owns approximately 23% (on a fully diluted basis)
of the Sprint PCS stock through its ownership of shares of Sprint PCS
stock-Series 2 and certain warrants and shares of convertible preferred stock
exercisable for or convertible into these shares.

         Liberty Media Group's interest in the business that makes up the Sprint
PCS Group began in 1994 when TCI, Comcast Corporation, Cox Communications, Inc.
and Sprint Corporation determined to engage in the wireless communications
business through a series of limited partnerships known collectively as "Sprint
PCS." In November 1998, Sprint Corporation assumed ownership and management
control of Sprint PCS. In exchange for its approximate 30% limited partnership
interest in Sprint PCS, TCI received shares of limited-voting Sprint PCS
stock-Series 2, shares of Sprint PCS convertible preferred stock and warrants to
purchase shares of Sprint PCS stock-Series 2.

         Pursuant to a final judgment agreed to by TCI, AT&T and the United
States Department of Justice in connection with the AT&T merger, all of the
Sprint securities held by TCI were deposited into a trust with an independent
trustee. Liberty Media Group holds trust certificates evidencing its beneficial
interest in the assets of the trust. The final judgment, which was entered by
the United States District Court for the District of Columbia on August 23,
1999, requires the trustee, on or before May 23, 2002, to dispose of a portion
of the Sprint securities held by the trust sufficient to cause Liberty Media
Group to own beneficially no more than 10% of the Sprint PCS stock that would be
outstanding on a fully diluted basis on such date. On or before May 23, 2004,
the trustee is required to divest the remainder of the Sprint securities held by
the trust.

         The trust agreement grants the trustee the sole right to sell the
Sprint securities beneficially owned by Liberty Media Group and provides that
all decisions regarding such divestiture will be made by the trustee without
discussion or consultation with AT&T or Liberty Media Group; however, the
trustee is required to consult with the board of directors of Liberty Media
Group (other than AT&T representatives and John C. Malone) regarding such
divestiture. The trustee has the power and authority to accomplish such
divestiture only in a manner reasonably calculated to maximize the value of the
Sprint securities beneficially owned by Liberty Media Group.

         The trust agreement provides for the trustee to vote the Sprint
securities beneficially owned by Liberty Media Group in the same proportion as
other holders of Sprint PCS stock so long as such securities are held by the
trust. The final judgment also prohibits the acquisition by Liberty Media Group
of additional Sprint securities without the prior written consent of the
Department of Justice, subject to limited exceptions.

<PAGE>

         Terms of Ownership. Liberty Media Group was granted registration rights
with respect to its Sprint PCS holdings. These registration rights are currently
exercisable by the trustee. If Liberty Media Group's shares of Sprint PCS
stock-Series 2 are transferred, the transferred shares become shares of full
voting Sprint PCS stock-Series 1.

         TELEWEST COMMUNICATIONS PLC

         Telewest is a leading provider of cable television and residential and
business cable telephony services in the United Kingdom. Telewest provides cable
television services over a broadband network and uses its network, together with
twisted-pair copper wire connections for final delivery to the customer
premises, to provide telephony services to its customers. The broadband network
enables Telewest to deliver a wide variety of both television and telephony
services to its customers and to provide customers with a wide range of
interactive and integrated entertainment, telecommunications and information
services as they become more widely available in the future. Telewest has
installed its own telephone switches, which permits it to minimize fees
otherwise charged by public telephone companies and to offer a variety of
value-added services without relying on public telephone operators for
implementation. Telewest also offers home access to the Internet in all of its
franchises. Telewest's ordinary shares trade on the London Stock Exchange under
the symbol "TWT.L," and are represented by ADRs in the United States, where they
trade on the National Market tier of The Nasdaq Stock Market under the symbol
"TWSTY."

         Telewest owns and operates 41 cable franchises. As of December 31,
1999, these owned and operated franchises covered approximately 34% of the homes
in the United Kingdom in areas for which cable franchises have been awarded. At
that date, these franchises together included approximately 6.1 million homes
and over 400,000 businesses. As of December 31, 1999, the network in these
franchises passed approximately 4.7 million homes (approximately 4.4 million of
which had been passed and marketed) and Telewest had approximately 1.2 million
cable television customers, 1.6 million residential telephone lines and 306,000
business telephone lines. According to Telewest, approximately 62% of its
customers subscribe for both cable television and cable telephony services.

         Ownership Interest. Liberty Media Group owns approximately a 22%
interest in Telewest through a limited liability company, which is 50% owned by
Liberty Media Group and 50% owned by MediaOne Group, Inc. MediaOne owns an
approximately 22% interest in Telewest through the limited liability company. In
addition, MediaOne owns an approximately 7% interest in Telewest outside the
limited liability company.

         Terms of Ownership. Liberty Media Group and MediaOne have been granted
preemptive rights on share issuances by Telewest which enable them to
collectively maintain a majority of the voting rights in Telewest. Liberty Media
Group and MediaOne have agreements with respect to the voting of shares of
Telewest beneficially owned by them and the manner in which they will cause
their designees to the Telewest board of directors to vote. In general, Liberty
Media Group and MediaOne have agreed that, on any matter requiring shareholder
approval, they will vote their Telewest shares together in such manner as may be
agreed by them. As a result, Liberty Media Group and MediaOne together generally
will be able to influence materially the outcome of any matter requiring
shareholder approval. In addition, each of Liberty Media Group and MediaOne has

<PAGE>

veto rights with respect to certain fundamental matters affecting Telewest for
so long as each holds 15% or more of the outstanding Telewest ordinary shares.
Further, for so long as each of them beneficially owns at least 15% of the
outstanding Telewest ordinary shares, each is entitled to appoint two members to
the 10-member Telewest board of directors, and they have agreed that on any
matter requiring board approval, they will cause the directors designated by
them to vote together as agreed by them.

         Each of Liberty Media Group and MediaOne has agreed that any proposed
transfer of its Telewest shares will be subject to rights of first refusal in
favor of the other party, in each case subject to certain exceptions. In
addition, each of Liberty Media Group and MediaOne has the right to trigger a
put/call procedure in the event the other is deemed to undergo a change of
control.

         Each of Liberty Media Group and MediaOne has agreed with Telewest,
subject to certain exceptions, not to acquire interests in other cable
television or cable telephony companies in the United Kingdom, and Telewest has
agreed to certain restrictions on its ability to engage in businesses in the
United Kingdom outside of cable television, cable telephony and wireless
telephony.

         In May 1999, as part of a series of agreements entered into with AT&T
in connection with AT&T's proposed acquisition of MediaOne, Microsoft
Corporation agreed to purchase MediaOne's interest in Telewest through a
tax-free exchange of Microsoft shares, subject to certain conditions, including
receipt of the consent of Liberty Media Group and the closing of the proposed
business combination between AT&T and MediaOne. It is expected that if this
purchase is completed, Microsoft will succeed to all of MediaOne's rights and
obligations set forth above, subject to certain modifications agreed to in
connection with the Telewest offer for Flextech.

         On March 7, 2000, Telewest offered to acquire Flextech at a purchase
price of approximately (pound sterling)2.76 billion. Pursuant to the offer by
Telewest, each share of Flextech would be exchanged for 3.78 new Telewest
shares. Liberty Media Group owns approximately a 37% equity interest in Flextech
and a 22% equity interest in Telewest. The proposed acquisition is subject to
approval of the shareholders of Telewest, acceptance of the offer by the
shareholders of Flextech and certain other conditions. Liberty Media Group, as a
shareholder of Flextech, has agreed to tender its Flextech shares, subject to
certain conditions. Otherwise, Liberty Media Group has agreed with Telewest not
to dispose of any of Liberty Media Group's interest in Flextech through March
31, 2000. Liberty Media Group, MediaOne and Microsoft as shareholders of
approximately 51% of Telewest, in the aggregate, have agreed to vote in favor of
resolutions put to Telewet shareholders in connection with the offer to the
extent applicable law and stock exchange rules permit them to do so. Because of
Liberty Media Group's holdings, the Listing Rules of the London Stock Exchange
require a separate vote by Telewest's shareholders, excluding Liberty Media
Group, to approve Telewest's acquisition of Liberty Media Group's interests in
Flextech in the merger. MediaOne and Microsoft have agreed to vote in favor of
this acquisition.

<PAGE>
         TELIGENT, INC.

         Teligent, Inc. is a full-service, facilities-based communications
company which offers small and medium-sized business customers local and long
distance telephony, high-speed data and Internet access services over Teligent's
SmartWave(TM) local networks. The SmartWave(TM) local networks integrate
advanced fixed wireless technologies with traditional broadband wireline
technology. Teligent"s digital wireless technology provides many of the
advantages of fiber and can transport information within the network at up to
155 Megabits per second via a point-to-point radio. Teligent currently offers
commercial service using its SmartWave(TM) local networks in 40 major market
areas that comprise more than 580 cities and towns with a combined population of
more than 100 million.

         INTERNET SERVICES AND TECHNOLOGY


         LIBERTY DIGITAL, INC.

         Liberty Digital, Inc. (formerly named TCI Music, Inc.) is a diversified
new media company with investments in Internet content and interactive
television businesses, as well as music services delivered to commercial and
residential customers via cable, satellite, the Internet and other platforms.
Liberty Digital's series A common stock trades on the National Market tier of
The Nasdaq Stock Market under the symbol "LDIG."

         As of March 1, 2000, the assets of Liberty Digital consisted primarily
of the following:

<TABLE>
<CAPTION>
                                              Liberty
                                             Digital's
                                             Ownership
                 Entity                          %                                Business
------------------------------------       ------------   -----------------------------------------------------------
<S>                                         <C>           <C>
   AT&T Access Agreement                    N/A           Certain programming rights with respect to AT&T's cable
                                                          systems

   ACTV, Inc.
   (Nasdaq: IATV)                               12%(1)    Producer of tools for interactive programming for
                                                          television and Internet platforms

   BET.com                                       5%       Web site with content directed towards African Americans

   CarsDirect.com, Inc.                          1%       Online car retailer

   DMX, LLC.                                   100%       Programs, markets and distributes the premium digital
                                                          audio service, Digital Music Express

   Drugstore.com, Inc.
   (Nasdaq: DSCM)                                1%       Online pharmacy and sundries

   HomeGrocer.com, Inc.                          1%       Online grocery store
   (Nasdaq: HOMG)

   iBeam Broadcasting Corporation                8%       Satellite delivery of streaming media from programmers to
<PAGE>                                                          Internet service providers

   iFilm, Inc.                                   1%       Metamediary for making, distributing and consuming film
                                                          entertainment

   Interactive Pictures                          4%       Interactive photographic technology for the Internet
        Corporation
     (Nasdaq: IPIX)

   iVillage, Inc.                                3%       Internet and on-line provider of branded communications
   (Nasdaq: IVIL)                                         and information services for adult women

   Kaleidoscope Interactive, LLC                50%       Online provider of information and services related to
                                                          health concerns and disabilities
</TABLE>

<TABLE>
<CAPTION>
                                             Liberty
                                             Digital's
                                             Ownership
                 Entity                          %                                Business
-----------------------------------------    ---------    -----------------------------------------------------------
<S>                                          <C>          <C>
   Kaleidoscope Network, Inc.                   12%       24-hour cable network that provides video programming
                                                          related to health concerns and disabilities

   KPCB Java Fund, L.P.                          6%       Investor in Java application development

   Lifescape, LLC                               15%       Online provider of information concerning substance
                                                          abuse, addictions and health problems

   The Lightspan Partnership, Inc.             11%        Developer of educational programming
   (Nasdaq:LSPN)

   MedScholar Digital Network, LLC              50%       Provider of continuous medical education services to
                                                          healthcare professionals

   MTVN Online L.P.                             10%       Online music venture with MTV Networks

   netLibrary, Inc.                              2%       Electronic library

   Online Retail Partners                       21%       Creates e-commerce partnerships with brick-and-mortar
                                                          retailers

   OpenTV Inc.                                   4%       Provider of software to enable interactive television
   (Nasdaq:OPTV)

   OrderTrust, Inc.                              9%       Provider of total order life cycle management services

   OurHouse.com                                  3%       Ace Hardware co-branded vertical portal for online home
                                                          improvement products, services and information

   pogo.com, Inc.                               19%       Online game service targeting family Internet game players
   priceline.com Incorporated
   (Nasdaq: PCLN)                               2%        E-commerce service allowing consumers to make offers on
                                                          products and services

<PAGE>

   Quokka Sports, Inc.
   (Nasdaq: QKKA)                               3%        Internet provider of live digital sports entertainment

   Replay TV, Inc.                              1%(2)     Producer of technology that allows customers to customize
                                                          television viewing

   Sportsline USA, Inc.
   (Nasdaq: SPLN)                               3%        Internet provider of branded interactive sports
                                                          information, programming and merchandise

   TiVo Inc.
   (Nasdaq: TIVO)                               1%        Producer of technology that allows customers to customize
                                                          television viewing

   UGO Networks, Inc.                           4%        Online provider of underground entertainment news and
                                                          video games
</TABLE>

   (1)   Liberty Digital also holds warrants to purchase additional shares of
         ACTV, Inc. common stock, which it may exercise over a period of one to
         five years. Exercise of these warrants would increase Liberty Digital's
         ownership to approximately 25%.

   (2)   Discovery, Starz Encore and TV Guide each owns an additional 1% of
         Replay.

         An approximately 94% interest in Liberty Digital is attributed to the
Liberty Media Group.

         Liberty Media Group's interest in Liberty Digital began in 1997 when
TCI Music was formed as a wholly owned subsidiary of TCI for the purpose of
entering into a business combination with DMX, LLC. DMX currently programs,
markets and distributes the premium digital audio music service, known as
Digital Music Express to more than 29 million subscribers in the United States.
In December 1997, TCI Music acquired The Box Worldwide, Inc., which programs and
distributes a subscriber selected music video television programming service to
cable and broadcast television systems via satellite delivery, and SonicNet,
Inc., a leading Internet music network consisting of a group of music web sites.
TCI Music acquired The Box to serve as the platform for music video and acquired
SonicNet to provide music-related content to DMX and The Box and to position
itself to take advantage of developments in music distribution through the
Internet.

         In July 1999, TCI Music entered into a joint venture with MTV Networks,
a division of Viacom, Inc., to form and operate an online music venture, MTVN
Online L.P. As part of that transaction, TCI Music contributed to MTVN Online
substantially all of the assets and businesses of The Box and SonicNet, subject
to certain exceptions. In return, TCI Music received a 10% interest in MTVN
Online. In connection with this transaction, TCI Music and Liberty Media Group
each agreed not to compete with MTVN Online in its online music video business
until July 15, 2000 or in the music video business generally until July 15,
2004, subject to certain exceptions.

         In September 1999, TCI Music and Liberty Media Group completed a
transaction pursuant to which Liberty Media Group and certain of its affiliates
contributed to TCI Music substantially all of their respective Internet content

<PAGE>

and interactive television assets, certain rights with respect to access to AT&T
cable systems for the provision of interactive video services, and a combination
of cash and notes receivable equal to $150 million, in exchange for preferred
and common stock of TCI Music. Following this transaction, TCI Music changed its
name to Liberty Digital, Inc. In addition, Liberty Media Group adopted a policy
that Liberty Digital would be its primary (but not exclusive) vehicle to pursue
corporate opportunities relating to interactive programming and interactive
content related services in the United States and Canada, subject to certain
exceptions.

         MOTOROLA, INC. (SUCCESSOR TO GENERAL INSTRUMENT CORPORATION)

         Liberty Media Group's interest in Motorola, Inc. derives from its
former interest in General Instrument Corporation. GI merged with Motorola on
January 5, 2000. Prior to its merger with Motorola, General Instrument
Corporation was a leading worldwide provider of integrated and interactive
broadband access solutions and, with its strategic partners and customers, GI
sought to advance the convergence of the Internet, telecommunications and video
entertainment industries. To that end, GI made products that allow video, voice
and data to be delivered over cable, digital satellite and telephony networks.
GI was a leading supplier of digital and analog set-top terminals and systems
for wired and wireless cable television networks, as well as hybrid
fiber/coaxial network transmission systems used by cable television operators.
GI also provided digital satellite television systems for programmers,
direct-to-home satellite networks and private networks for business
communications. Through its limited partnership interest in Next Level
Communications L.P., GI provided next-generation broadband access solutions for
local telephone companies. GI also had audio and Internet/data-delivery systems
among its product lines.

         In the Motorola merger, each share of GI common stock was exchanged for
0.575 shares of Motorola common stock. In connection with the merger, Liberty
Media Group entered into an agreement with Motorola, pursuant to which Liberty
Media Group agreed to vote its shares of GI common stock in favor of the
transaction and Motorola granted to Liberty Media Group certain registration
rights with respect to the shares of Motorola common stock acquired by Liberty
Media Group in the merger. Immediately following the merger, GI stockholders
owned approximately 17% of Motorola.

         Motorola is a global leader in providing integrated communications
solutions and embedded electronic solutions. These include:

    -    software-enhanced wireless telephone, two-way radio, messaging and
         satellite communications products and systems, as well as networking
         and Internet access products, for consumers, network operators, and
         commercial, government and industrial customers,

    -    embedded semiconductor solutions for customers in networking,
         transportation, wireless communications and imaging and entertainment
         markets, and

    -    embedded electronic systems for automotive, communications, imaging,
         manufacturing systems, computer and consumer markets.

Motorola's common stock trades on the NYSE under the symbol "MOT."

<PAGE>

         Liberty Media Group currently holds common stock representing a 2.5%
interest in Motorola, excluding vested warrants to purchase common stock in
Motorola. Liberty Media Group also holds warrants to purchase approximately 12.3
million additional shares of Motorola common stock at $24.78 per share. The
warrants vest at specified dates, with the number of warrants vesting on each
such date relating to the number of advanced digital set-top terminals purchased
by AT&T and certain of its affiliates. If the warrants do not vest on the
specified date, the warrants will terminate. If any warrants terminate solely
because AT&T fails to purchase the required number of advanced digital set-top
terminals, AT&T will pay to Liberty Media Group an amount equal to $14.35 for
each warrant terminated, adjusted as appropriate for any changes in the
capitalization of Motorola. Warrants to purchase 6.1 million shares are
currently vested, and assuming Liberty Media Group's exercise of such vested
warrants, its ownership interest in Motorola would increase to 3.3%.

         Liberty Media Group's relationship with GI began in December 1997 when
National Digital Television Center, Inc., a wholly owned subsidiary of TCI
("NDTC"), entered into an agreement with GI to purchase advanced digital set-top
terminals. In connection with NDTC's purchase commitment, GI granted the
warrants specified above. In July 1998, TCI acquired 21.4 million restricted
shares of GI common stock in exchange for:

    -    certain of the assets of NDTC's set-top authorization business,

    -    the license of certain related software to GI,

    -    a $50 million promissory note from TCI to GI and

    -    a nine year revenue guarantee from TCI in favor of GI.

In connection with the AT&T merger, the shares of GI common stock and the note
payable were contributed to Liberty Media Group. In April 1999, Liberty Media
Group acquired an additional 10 million shares of GI from Forstmann Little & Co.
for $280 million. This purchase by Liberty Media Group increased Liberty Media
Group's ownership in GI to approximately 21% and made Liberty Media Group the
largest stockholder of GI.

REGULATORY MATTERS

         DOMESTIC PROGRAMMING

         In the United States, the FCC regulates the providers of satellite
communications services and facilities for the transmission of programming
services, the cable television systems that carry such services, and, to some
extent, the availability of the programming services themselves through its
regulation of program licensing. Cable television systems in the United States
are also regulated by municipalities or other state and local government
authorities. Cable television companies are currently subject to federal rate
regulation on the provision of basic service, and continued rate regulation or
other franchise conditions could place downward pressure on the fees cable
television companies are willing or able to pay for programming services in
which Liberty Media Group has interests and regulatory carriage requirements
could adversely affect the number of channels available to carry the programming
services in which we have an interest.

<PAGE>

         Regulation of Program Licensing. The Cable Television Consumer
Protection and Competition Act of 1992 (the "1992 Cable Act") directed the FCC
to promulgate regulations regarding the sale and acquisition of cable
programming between multi-channel video programming distributors (including
cable operators) and satellite-delivered programming services in which a cable
operator has an attributable interest. The legislation and the implementing
regulations adopted by the FCC preclude virtually all exclusive programming
contracts between cable operators and satellite programmers affiliated with any
cable operator (unless the FCC first determines the contract serves the public
interest) and generally prohibit a cable operator that has an attributable
interest in a satellite programmer from improperly influencing the terms and
conditions of sale to unaffiliated multi-channel video programming distributors.
Further, the 1992 Cable Act requires that such affiliated programmers make their
programming services available to cable operators and competing multi-channel
video programming distributors such as multi-channel multi-point distribution
systems and direct broadcast satellite distributors on terms and conditions that
do not unfairly discriminate among distributors. The Telecommunications Act of
1996 has extended these rules to programming services in which telephone
companies and other common carriers have attributable ownership interests. The
FCC revised its program licensing rules, by implementing a damages remedy in
situations where the defendant knowingly violates the regulations and by
establishing a timeline for the resolution of such complaints, among other
things.

         Regulation of Carriage of Programming. Under the 1992 Cable Act, the
FCC has adopted regulations prohibiting cable operators from requiring a
financial interest in a programming service as a condition to carriage of such
service, coercing exclusive rights in a programming service or favoring
affiliated programmers so as to restrain unreasonably the ability of
unaffiliated programmers to compete.

         Regulation of Ownership. The 1992 Cable Act required the FCC, among
other things, (a) to prescribe rules and regulations establishing reasonable
limits on the number of channels on a cable system that will be allowed to carry
programming in which the owner of such cable system has an attributable interest
and (b) to consider the necessity and appropriateness of imposing limitations on
the degree to which multi-channel video programming distributors (including
cable operators) may engage in the creation or production of video programming.
In 1993, the FCC adopted regulations limiting carriage by a cable operator of
national programming services in which that operator holds an attributable
interest to 40% of the first 75 activated channels on each of the cable
operator's systems. The rules provide for the use of two additional channels or
a 45% limit, whichever is greater, provided that the additional channels carry
minority-controlled programming services. The regulations also grandfather
existing carriage arrangements that exceed the channel limits, but require new
channel capacity to be devoted to unaffiliated programming services until the
system achieves compliance with the regulations. These channel occupancy limits
apply only up to 75 activated channels on the cable system, and the rules do not
apply to local or regional programming services. These rules may limit carriage
of the programming companies in which Liberty Media Group has interests on
certain systems of affiliated cable operators. In the same rulemaking, the FCC
concluded that additional restrictions on the ability of multi-channel
distributors to engage in the creation or production of video programming were
then unwarranted.

<PAGE>

         The FCC's rules also generally prohibit common ownership of a cable
system and broadcast television stations or multichannel multi-point
distribution systems ("MMDS") with overlapping service areas. In August 1999,
the FCC revised the attribution standards, which are used to implement these
ownership rules, and adopted new attribution standards based upon a combination
of equity, debt and other indicia of influence. The new attribution criteria
could limit Liberty Media Group's ability to engage in certain transactions
involving broadcast stations and MMDS systems. The ownership attribution
standards used to enforce other rules, including the horizontal cable system
ownership, channel occupancy limits, program access and program carriage rules,
also were revised in October 1999.

         Regulation of Carriage of Broadcast Stations. The 1992 Cable Act
granted broadcasters a choice of must carry rights or retransmission consent
rights. The rules adopted by the FCC generally provided for mandatory carriage
by cable systems of all local full-power commercial television broadcast signals
selecting must carry rights and, depending on a cable system's channel capacity,
non-commercial television broadcast signals. Such statutorily mandated carriage
of broadcast stations coupled with the provisions of the Cable Communications
Policy Act of 1984, which require cable television systems with 36 or more
"activated" channels to reserve a percentage of such channels for commercial use
by unaffiliated third parties and permit franchise authorities to require the
cable operator to provide channel capacity, equipment and facilities for public,
educational and government access channels, could adversely affect some or
substantially all of the programming companies in which Liberty Media Group has
interests by limiting the carriage of such services in cable systems with
limited channel capacity. The FCC recently initiated a proceeding asking to what
extent cable operators must carry all digital signals transmitted by
broadcasters. The imposition of such additional must carry regulation, in
conjunction with the current limited cable system channel capacity, would make
it likely that cable operators will be forced to drop cable programming
services, which may have an adverse impact on the programming companies in which
Liberty Media Group has interests.

         Closed Captioning and Video Description Regulation. The
Telecommunications Act of 1996 also required the FCC to establish rules and an
implementation schedule to ensure that video programming is fully accessible to
the hearing impaired through closed captioning. The rules adopted by the FCC
will require substantial closed captioning over an eight to ten year phase-in
period with only limited exemptions. As a result, the programming companies in
which Liberty Media Group has interests are expected to incur significant
additional costs for closed captioning. In November 1999, the FCC also issued a
notice of proposed rulemaking that would require certain broadcasters and the
largest national video programming services to begin to provide audio
descriptions of visual events for the visually impaired on the secondary audio
program. Depending upon the final requirements of any rule, increased costs for
programmers may result.

         Copyright Regulation. Satellite carriers, such as TV Guide's UVTV
division, retransmit the broadcast signals of "superstations," such as KWGN and
WGN, and of network stations to home satellite dish owners for private home
viewing under statutory license pursuant to the Satellite Home Viewer Act of
1994 (the "SHV Act"). The Intellectual Property and Communications Omnibus
Reform Act of 1999 ("IPCORA"), enacted into law in November 1999, extends the
SHV Act license until December 31, 2004. Under the SHV Act, satellite carriers
previously paid a monthly fee of 27 cents per subscriber for the secondary

<PAGE>

transmission of distant superstations and distant network stations. However,
IPCORA has decreased the royalty fee for distant superstations by 30% and
distant network stations by 45%. To the extent that satellite carriers transmit
superstation or network station signals to cable operators, such cable operators
pay the copyright fee under the separate compulsory license. Satellite carriers
may only distribute the signals of network broadcast stations, as distinguished
from superstations, to "unserved households" that are outside the Grade B
contours of a station affiliated with such network. IPCORA requires the FCC to
conduct a number of rulemaking proceedings that may ultimately subject
superstations and distant network stations delivered by satellite directly to
dish owners to new program exclusivity rules (similar to those imposed on cable
operators), including syndicated exclusivity, network non-duplication and sports
blackout rules. The FCC also will commence rule makings to review the signal
strength measurement and subscriber eligibility standards. The new legislation
provides a copyright liability moratorium for all satellite carriers
distributing distant network signals to existing (as of October 31, 1999) and
recently terminated (after July 1, 1998) subscribers who are within Grade B
contours of local network affiliates. Moreover, the entire C-band satellite
industry is exempt from all restrictions on delivering distant network signals
to subscribers who received C-band service before October 31, 1999. IPCORA and
rulemakings, exemptions, and regulatory requirements adopted under it will
substantially impact the C-band and DBS industry, potentially affecting the
economics of uplinking and distributing distant network stations and
superstations to dish owners. A subsidiary of TV Guide entered into an agreement
with the National Association of Broadcasters, the ABC, CBS, FOX and NBC
networks, their affiliate associations, and several hundred broadcast stations
to identify by zip code those geographic areas which are "unserved" by network
affiliated stations in May 1998. With the passage of IPCORA, that subsidiary has
opted to discontinue that agreement. The broadcasters have, however, objected to
such termination and have asserted claims for liquidated damages and other
damages as a result of the failure to terminate distant network signal
subscribers during the period from September, 1999 through the passage of IPCORA
and the termination of the agreement.

         Satellites and Uplink. In general, authorization from the FCC must be
obtained for the construction and operation of a communications satellite. The
FCC authorizes utilization of satellite orbital slots assigned to the United
States by the World Administrative Radio Conference. Such slots are finite in
number, thus limiting the number of carriers that can provide satellite
transponders and the number of transponders available for transmission of
programming services. At present, however, there are numerous competing
satellite service providers that make transponders available for video services
to the cable industry.

         Proposed Changes in Regulation. The regulation of programming services,
cable television systems, satellite carriers and television stations is subject
to the political process and has been in constant flux over the past decade.
Further material changes in the law and regulatory requirements must be
anticipated and there can be no assurance that Liberty Media Group's business
will not be adversely affected by future legislation, new regulation or
deregulation.

         DOMESTIC TELEPHONY

         The FCC regulates the licensing, construction, operation, acquisition,
resale and interconnection arrangements of domestic wireless telecommunications
systems. The activities of wireless service providers, such as the Sprint PCS

<PAGE>

Group, are subject to regulation in varying degrees, depending on the
jurisdiction, by state and local regulatory agencies as well. The FCC, in
conjunction with the U.S. Federal Aviation Administration, also regulates tower
marking and lighting, and FCC environmental rules may cause certain PCS network
facilities to become subject to regulation under the National Environmental
Policy Act and the National Historic Preservation Act.

         INTERNATIONAL CABLE, TELEPHONY AND PROGRAMMING

         Some of the foreign countries in which Liberty Media Group has, or
proposes to make, an investment regulate, in varying degrees, (a) the granting
of cable and telephony franchises, the construction of cable and telephony
systems and the operations of cable, other multi-channel television operators
and telephony operators and service providers, as well as the acquisition of,
and foreign investments in, such operators and service providers, and (b) the
distribution and content of programming and Internet services and foreign
investment in programming companies. Regulations or laws may cover wireline and
wireless telephony, satellite and cable communications and Internet services,
among others. Regulations or laws that exist at the time Liberty Media Group
makes an investment in a foreign subsidiary or business affiliate may thereafter
change, and there can be no assurance that material and adverse changes in the
regulation of the services provided by Liberty Media Group's subsidiaries and
business affiliates will not occur in the future. Regulation can take the form
of price controls, service requirements and programming and other content
restrictions, among others. Moreover, some countries do not issue exclusive
licenses to provide multi-channel television services within a geographic area,
and in those instances Liberty Media Group may be adversely affected by an
overbuild by one or more competing cable operators. In certain countries where
multi-channel television is less developed, there is minimal regulation of cable
television, and, hence, the protections of the cable operator's investment
available in the United States and other countries (such as rights to renewal of
franchises and utility pole attachment) may not be available in these countries.

         INTERNET SERVICES

         The Internet companies in which we have interests are subject, both
directly and indirectly, to various laws and governmental regulations relating
to their respective businesses. There are currently few laws or regulations
directly applicable to access to or commerce on commercial online services or
the Internet. For example, the Digital Millennium Copyright Act, enacted into
law in 1998, protects certain qualifying online service providers from copyright
infringement liability, the Internet Tax Freedom Act, also enacted in 1998,
placed a three year moratorium on new state and local taxes on Internet access
and commerce, and under the Communications Decency Act, an Internet service
provider will not be treated as the publisher or speaker of any information
provided by another information content provider. However, due to the increasing
popularity and use of commercial online services and the Internet, it is
possible that a number of laws and regulations may be adopted with respect to
commercial online services and the Internet. Such laws and regulations may cover
issues such as user privacy, defamatory speech, copyright infringement, pricing
and characteristics and quality of products and services. The adoption of such
laws or regulations in the future may slow the growth of commercial online
services and the Internet, which could in turn cause a decline in the demand for
the services and products of the Internet companies in which we have interests
and increase such companies' costs of doing business or otherwise have an
adverse effect on their businesses, operating results and financial conditions.

<PAGE>

Moreover, the applicability to commercial online services and the Internet of
existing laws governing issues such as property ownership, libel, personal
privacy and taxation is uncertain and could expose these companies to
substantial liability.

         BROADCASTERS

         Liberty Media Group also has nonattributable minority ownership
interests in group owners of broadcast television and radio stations. The FCC
extensively regulates the ownership and operation of such stations through a
variety of rules.

COMPETITION

         Programming. The business of distributing programming for cable and
satellite television is highly competitive, both in the United States and in
foreign countries. The programming companies in which we have interests directly
compete with other programmers for distribution on a limited number of channels.
Once distribution is obtained, our programming services and our business
affiliates' programming services compete, in varying degrees, for viewers and
advertisers with other cable and off-air broadcast television programming
services as well as with other entertainment media, including home video
(generally video rentals), pay-per-view services, online activities, movies and
other forms of news, information and entertainment. The programming companies in
which we have interests also compete, to varying degrees, for creative talent
and programming content. Our management believes that important competitive
factors include the prices charged for programming, the quantity, quality and
variety of the programming offered and the effectiveness of marketing efforts.
In addition, HSN and QVC operate in direct competition with businesses that are
engaged in retail merchandising.

         Communications. The cable television systems and other forms of media
distribution in which we have interests directly compete for viewer attention
and subscriptions in local markets with other providers of entertainment, news
and information, including other cable television systems in those countries
that do not grant exclusive franchises, broadcast television stations,
direct-to-home satellite companies, satellite master antenna television systems,
multi-channel multi-point distribution systems and telephone companies, other
sources of video programs (such as videocassettes) and additional sources for
entertainment news and information, including the Internet. Cable television
systems also face strong competition from all media for advertising dollars. Our
management believes that important competitive factors include fees charged for
basic and premium services, the quantity, quality and variety of the programming
offered, the quality of signal reception, customer service and the effectiveness
of marketing efforts.

         In addition, there is substantial competition in the domestic wireless
telecommunications industry, and it is expected that such competition will
intensify as a result of the entrance of new competitors and the increasing pace
of development of new technologies, products and services. Each of the markets
in which the Sprint PCS Group competes is served by other two-way wireless
service providers, including cellular and PCS operators and resellers. A
majority of the markets will have five or more commercial mobile radio service
providers and each of the top 50 metropolitan markets have at least one other
PCS competitor in addition to two cellular incumbents. Many of these competitors
have been operating for a number of years and currently service a significant
subscriber base.

<PAGE>

         Internet Services and Technology. The markets for Internet services,
online content and products are relatively new, intensely competitive and
rapidly changing. Since the Internet's commercialization in the early 1990's,
the number of Internet companies and web sites competing for consumers'
attention and spending has proliferated with no substantial barriers to entry,
and we expect that competition will continue to intensify in the future. The
Internet companies and web sites in which we have interests compete, directly
and indirectly, for members, visitors, advertisers, content providers and
merchandise sales with many categories of companies, including:

    -    other Internet companies and web sites targeted to the respective
         audiences of the Internet companies and web sites in which we have
         interests;

    -    publishers and distributors of traditional off-line media (such as
         television, radio and print), including those targeted to the
         respective audiences of the Internet companies and web sites in which
         we have interests, many of which have made, or may in the future make,
         significant acquisitions of or investments in Internet companies and/or
         have established, or may in the future establish, web sites;

    -    general purpose consumer online services such as America Online and
         Microsoft Network, each of which provides access to content and
         services targeted to the respective audiences of the Internet companies
         and web sites in which we have interests;

    -    vendors of information, merchandise, products and services distributed
         through other means, including retail stores, mail, facsimile and
         private bulletin board services; and

    -    web search and retrieval services and other high-traffic web sites.

Liberty Media Group anticipates that the number of such competitors will
increase in the future.

         The technology companies in which we have interests compete with a
substantial number of foreign and domestic companies, and the rapid
technological changes occurring in such companies' markets are expected to lead
to the entry of new competitors. The ability of the technology companies in
which we have interests to anticipate technological changes and introduce
enhanced products on a timely basis will be a significant factor in their
ability to expand and remain competitive. Existing competitors' actions and new
entrants may have an adverse impact on these companies' sales and profitability.

<PAGE>

                          INDEPENDENT AUDITORS' REPORT


The Board of Directors and Stockholders
AT&T Corp.:

We have audited the accompanying combined balance sheets of Liberty Media Group
(a combination of certain assets of AT&T Corp., as defined in note 1) ("New
Liberty" or "Successor") as of December 31, 1999, and of Liberty Media Group (a
combination of certain assets of Tele-Communications, Inc., as defined in note
1) ("Old Liberty" or "Predecessor") as of December 31, 1998, and the related
combined statements of operations and comprehensive earnings, combined equity,
and cash flows for the periods from March 1, 1999 to December 31, 1999
(Successor period) and from January 1, 1999 to February 28, 1999 and for each of
the years in the two-year period ended December 31, 1998 (Predecessor periods).
These combined financial statements are the responsibility of management. Our
responsibility is to express an opinion on these combined financial statements
based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

The combined financial statements of Liberty Media Group are presented for
purposes of additional analysis of the consolidated financial statements of AT&T
Corp. As more fully described in note 1, the combined financial statements of
Liberty Media Group are intended to reflect the performance of the businesses of
AT&T Corp., that produce, acquire and distribute entertainment, educational and
informational programming services. The combined financial statements of Liberty
Media Group should be read in conjunction with the consolidated financial
statements of AT&T Corp.

In our opinion, the aforementioned Successor combined financial statements
present fairly, in all material respects, the financial position of New Liberty
as of December 31, 1999, and the results of their operations and their cash
flows for the Successor period, in conformity with generally accepted accounting
principles. Further, in our opinion, the aforementioned Predecessor combined
financial statements present fairly, in all material respects, the financial
position of Old Liberty as of December 31, 1998, and the results of their
operations and their cash flows for the Predecessor periods, in conformity with
generally accepted accounting principles.

As discussed in note 1, effective March 9, 1999, AT&T Corp., the owner of the
assets comprising New Liberty, acquired Tele-Communications, Inc., the owner of
the assets comprising Old Liberty, in a business combination accounted for as a
purchase. As a result of the acquisition, the combined financial information for
the periods after the acquisition is presented on a different cost basis than
that for the periods before the acquisition and, therefore, is not comparable.


                                            KPMG LLP



Denver, Colorado
February 29, 2000

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)

                             COMBINED BALANCE SHEETS

                           December 31, 1999 and 1998

<TABLE>
<CAPTION>
                                                                                 New Liberty          Old Liberty
                                                                                    1999                 1998
                                                                            -------------------       -----------
                                                                                             (note 2)
                                                                                        amounts in millions
<S>                                                                         <C>                       <C>
Assets
Current assets:
     Cash and cash equivalents                                                           $ 1,714               407
     Short-term investments                                                                  378               124
     Trade and other receivables, net                                                        134               185
     Prepaid expenses and committed program rights                                           406               263
     Deferred income tax assets                                                              750               216
     Other current assets                                                                      5                21
                                                                                         -------            ------
         Total current assets                                                              3,387             1,216
                                                                                         -------            ------
Investments in affiliates, accounted for under the equity method, and
     related receivables (note 6)                                                         15,922             3,079
Investments in available-for-sale securities and others (note 7)
                                                                                          28,601            14,383
Property and equipment, at cost                                                              162               935
     Less accumulated depreciation                                                            19               350
                                                                                         -------            ------
                                                                                             143               585
                                                                                         -------            ------
Intangible assets:
     Excess cost over acquired net assets                                                  9,973             1,030
     Franchise costs                                                                         273               109
                                                                                         -------            ------
                                                                                          10,246             1,139
         Less accumulated amortization                                                       454               164
                                                                                         -------            ------
                                                                                           9,792               975
                                                                                         -------            ------
Other assets, at cost, net of accumulated amortization                                       839               326
                                                                                         -------            ------
         Total assets                                                                    $58,684            20,564
                                                                                         =======            ======
</TABLE>
                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)

                             COMBINED BALANCE SHEETS
                           December 31, 1999 and 1998

<TABLE>
<CAPTION>
                                                                                   New Liberty        Old Liberty
                                                                                        1999               1998
                                                                                  ---------------      -----------
                                                                                           (note 2)
                                                                                      amounts in millions
<S>                                                                               <C>                  <C>
Liabilities and Combined Equity
Current liabilities:
     Accounts payable                                                                    $    44                78
     Accrued liabilities                                                                     201               204
     Accrued stock compensation                                                            2,405               126
     Program rights payable                                                                  166               156
     Customer prepayments                                                                     --               134
     Current portion of debt                                                                 554               578
                                                                                         -------            ------
         Total current liabilities                                                         3,370             1,276
                                                                                         -------            ------
Long-term debt (note 11)                                                                   2,723             2,318
Deferred income tax liabilities (note 12)                                                 14,107             4,674
Other liabilities                                                                             23               423
                                                                                         -------            ------
         Total liabilities                                                                20,223             8,691
                                                                                         -------            ------
Minority interests in equity of attributed subsidiaries (notes 8 and 9)                        1               545
Obligation to redeem common stock                                                             --                17
Combined equity (note 13):
     Combined equity                                                                      31,876             6,896
     Accumulated other comprehensive earnings, net of taxes (note 14)                      6,557             3,718
                                                                                         -------            ------
                                                                                          38,433            10,614
     Due to related parties                                                                   27               697
                                                                                         -------               ---
         Total combined equity                                                            38,460            11,311
                                                                                         -------            ------
Commitments and contingencies (note 15)
         Total liabilities and combined equity                                           $58,684            20,564
                                                                                         =======            ======
</TABLE>

See accompanying notes to combined financial statements.

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)

          COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE EARNINGS



<TABLE>
<CAPTION>
                                                                  New Liberty                Old Liberty
                                                                --------------   -------------------------------------
                                                                   Ten months     Two months
                                                                     ended          ended             Years ended
                                                                  December 31,    February 28,        December 31,
                                                                      1999          1999           1998        1997
                                                                --------------    ------------   --------   ----------
                                                                                 amounts in millions
                                                                                       (note 2)
<S>                                                             <C>               <C>           <C>          <C>
     Unaffiliated parties                                            $   549           239         1,301         1,104
     Related parties (note 13)                                           180            43           258           195
                                                                     -------       -------       -------       -------
                                                                         729           282         1,559         1,299
                                                                     -------       -------       -------       -------
Operating costs and expenses:
     Operating                                                           343           136           882           682
     Selling, general and administrative                                 229            89           427           348
     Charges from related parties (note 13)                               24             2            28            75
     Cost of distribution agreements (note 10)                            --            --            50            --
     Stock compensation                                                1,785           183           518           296
     Depreciation and amortization                                       562            47           243           196
                                                                     -------       -------       -------       -------
                                                                       2,943           457         2,148         1,597
                                                                     -------       -------       -------       -------
         Operating loss                                               (2,214)         (175)         (589)         (298)
Other income (expense):
     Interest expense                                                   (287)          (27)         (116)          (57)
     Interest expense to related parties, net (note 13)                   (1)           (1)          (10)          (12)
     Dividend and interest income                                        243            12           100            57
     Share of losses of affiliates, net (note 6)                        (904)          (66)       (1,034)         (850)
     Minority interests in losses of attributed subsidiaries              46             4           102            25
     Gains on dispositions, net (notes 6 and 7)                            3            14         4,738           420
     Gains on issuance of equity by affiliates and subsidiaries
        (notes 6, 8 and 10)                                               --           389           357           172
     Other, net                                                           (5)           --             6             2
                                                                     -------       -------       -------       -------
                                                                        (905)          325         4,143          (243)
                                                                     -------       -------       -------       -------
        Earnings (loss) before income taxes                           (3,119)          150         3,554          (541)
Income tax benefit (expense) (note 12)                                 1,097          (209)       (1,397)          130
                                                                     -------       -------       -------       -------
        Net earnings (loss)                                          $(2,022)          (59)        2,157          (411)
                                                                     -------       -------       -------       -------
<PAGE>

Other comprehensive earnings, net of taxes:
     Foreign currency translation adjustments                             60           (15)            3           (22)
     Unrealized holding gains arising during the period, net of
        reclassification adjustments                                   6,497           971         2,947           749
                                                                     -------       -------       -------       -------
     Other comprehensive earnings (loss)                               6,557           956         2,950           727
                                                                     -------       -------       -------       -------
Comprehensive earnings (note 14)                                     $ 4,535           897         5,107           316
                                                                     =======       =======       =======       =======
Basic and diluted loss per share (note 4):
     Loss attributable to common stockholders                        $(2,022)
                                                                     =======
     Basic and diluted loss per share attributable to common
        stockholders                                                 $ (1.61)
                                                                     =======
     Weighted average common shares                                    1,259
                                                                     =======
</TABLE>

See accompanying notes to combined financial statements.

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)

                          COMBINED STATEMENTS OF EQUITY
                  Years ended December 31, 1999, 1998 and 1997


<TABLE>
<CAPTION>
                                                                                   Accumulated
                                                                                      other         Due to
                                                                                  comprehensive     (from)        Total
                                                                      Combined      earnings,       related      combined
                                                                       equity      net of tax       parties      equity
                                                                      ---------   -------------     -------      --------
                                                                                          amounts in millions
<S>                                                                   <C>         <C>             <C>          <C>
Balance at January 1, 1997                                              $ 5,038            41          (134)        4,945
   Net loss                                                                (411)           --            --          (411)
   Foreign currency translation adjustments                                  --           (22)           --           (22)
   Unrealized gains on available-for-sale securities                         --           749            --           749
   Contribution to combined equity for issuance of common stock
     to TCI Employee Stock Purchase Plan
                                                                              2            --            --             2
   Repurchase of common stock                                              (625)           --            --          (625)
   Excess of consideration paid over carryover basis of net assets
     acquired from related party (note 9)                                  (219)           --            --          (219)
   Gain in connection with issuance of stock of affiliate (note 6)           66            --            --            66
   Issuance of stock by attributed subsidiary                                19            --            --            19
   Issuance of common stock (note 8)                                         30            --            --            30
   Excess of cash received over carryover basis of SUMMITrak
     Assets                                                                  30            --            --            30
   Other transfers from related parties, net                                 81            --           664           745
                                                                        -------       -------       -------       -------
Balance at December 31, 1997                                              4,011           768           530         5,309
   Net earnings                                                           2,157            --            --         2,157
   Foreign currency translation adjustments                                  --             3            --             3
   Unrealized gains on available-for-sale securities                         --         2,947            --         2,947
   Payments for call agreements                                            (140)           --            --          (140)
   Repurchase of common stock                                               (30)           --            --           (30)
   Premium received in connection with put obligation                         2            --            --             2
   Reclassification of redemption amount of common stock
     subject to put obligation                                              (17)           --            --           (17)
   Gain in connection with issuance of stock of affiliates and
     attributed subsidiaries (note 6)                                        70            --            --            70
   Issuance of common stock (note 8)                                        777            --            (5)          772
   Transfer of net liabilities to related party                              50            --            --            50
   Assignment of option contract from related party                          16            --           (16)           --
   Other transfers from related parties, net                                 --            --           188           188
                                                                        -------       -------       -------       -------
Balance at December 31, 1998                                              6,896         3,718           697        11,311
   Net loss                                                                 (59)           --            --           (59)
   Foreign currency translation adjustments                                  --           (15)           --           (15)
   Unrealized gains on available-for-sale securities                         --           971            --           971
   Reversal of reclassification of redemption amount of common
     stock subject to put obligation                                          8            --            --             8
   Transfer of net liabilities to related party, net of taxes                99            --            --            99

<PAGE>

   Excess paid on settlement of preferred stock conversion                  (18)           --            --           (18)
   Other transfers to  related parties, net                                  --            --           (24)          (24)
                                                                        -------       -------       -------       -------
Balance at February 28, 1999                                            $ 6,926         4,674           673        12,273
                                                                        =======       =======       =======       =======
</TABLE>

                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)


                          COMBINED STATEMENTS OF EQUITY

                  Years ended December 31, 1999, 1998 and 1997



<TABLE>
<CAPTION>
                                                                                          Accumulated
                                                                                             other          Due to
                                                                                          comprehensive     (from)          Total
                                                                               Combined      earnings,      related        combined
                                                                                equity      net of tax      parties         equity
                                                                               --------   -------------     -------        --------
                                                                                              amounts in millions
<S>                                                                            <C>        <C>               <C>            <C>
Balance at February 28, 1999                                                   $  6,926          4,674           673         12,273
                                                                               ========       ========      ========       ========
Balance at March 1, 1999                                                         33,515             --           197         33,712
   Net loss                                                                      (2,022)            --            --         (2,022)
   Foreign currency translation adjustments                                          --             60            --             60
   Recognition of previously unrealized losses on
     available-for-sale securities, net                                              --              7            --              7
   Unrealized gains on available-for-sale securities                                 --          6,490            --          6,490
   AT&T Liberty Media Group Tracking Stock issued for
     conversion of debentures (note 11)                                             354             --            --            354
   Reversal of reclassification of redemption amount of common
     stock subject to put obligation                                                  9             --            --              9
   Gain in connection with the issuance of common stock of affiliates and
     attributed subsidiaries (note 9)                                               108             --            --            108
   Utilization of net operating losses of Liberty Media Group
     by AT&T (note 12)                                                              (88)            --            --            (88)
   Other transfers to related parties, net                                           --             --          (170)          (170)
                                                                               --------       --------      --------       --------
Balance at December 31, 1999                                                   $ 31,876          6,557            27         38,460
                                                                               ========       ========      ========       ========
</TABLE>

See accompanying notes to combined financial statements.

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)

                        COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                            New Liberty              Old Liberty
                                                                            ------------   ----------------------------------
                                                                             Ten months    Two months
                                                                               ended          ended            Years ended
                                                                            December 31,   February 28,        December 31,
                                                                                1999           1999         1998         1997
                                                                            ------------   ------------     ----         ----
                                                                                                  amounts in millions
Cash flows from operating activities:                                                                (note 5)
<S>                                                                         <C>            <C>         <C>            <C>
     Net earnings (loss)                                                       $(2,022)          (59)        2,157          (411)
     Adjustments to reconcile net earnings (loss) to net cash
        provided (used) by operating activities:
        Depreciation and amortization                                              562            47           243           196
        Stock compensation                                                       1,785           183           518           296
        Payments of stock compensation                                            (111)         (126)          (58)          (75)
        Share of losses of affiliates, net                                         904            66         1,034           850
        Deferred income tax (benefit) expense                                   (1,025)          205         1,393            16
        Intergroup tax allocation                                                  (75)           --            (2)         (159)
        Cash payment from AT&T pursuant to tax sharing agreement                     1            --            --            --
        Minority interests in losses of attributed subsidiaries                    (46)           (4)         (102)          (25)
        Gains on issuance of equity by affiliates and subsidiaries                  --          (389)         (357)         (172)
        Gains on disposition of assets, net                                         (3)          (14)       (4,738)         (420)
        Noncash interest                                                           153            --            --            --
        Other noncash charges                                                        3             9            55            32
        Changes in operating assets and liabilities, net of the effect of
           acquisitions and dispositions:
        Change in receivables                                                        7           (19)          (49)            9
        Change in prepaid expenses and committed program rights                   (119)          (10)          (39)           (3)
        Change in payables, accruals and customer prepayments                      119             4            11            38
                                                                               -------       -------       -------       -------
             Net cash provided (used) by operating activities
                                                                                   133          (107)           66           172
                                                                               -------       -------       -------       -------
Cash flows from investing activities:
     Cash paid for acquisitions                                                   (109)           --           (92)          (41)
     Capital expended for property and equipment                                   (40)          (21)         (144)         (168)
     Cash balances of deconsolidated subsidiaries                                   --           (53)           --           (39)
     Investments in and loans to affiliates and others                          (2,596)          (45)       (1,404)         (683)
     Purchases of marketable securities                                         (7,757)         (132)         (124)           --
     Sales and maturities of marketable securities                               5,725            34            --            --
     Return of capital from affiliates                                               7            --            12             5
     Collections on loans to affiliates and others                                  --            --            --           133
     Cash proceeds from dispositions                                               130            43           423           302
     Other, net                                                                    (18)           (9)          (29)           (6)
                                                                               -------       -------       -------       -------
             Net cash used by investing activities                              (4,658)         (183)       (1,358)         (497)
                                                                               -------       -------       -------       -------
<PAGE>

Cash flows from financing activities:
     Borrowings of debt                                                          3,187           156         2,428           667
     Repayments of debt                                                         (2,211)         (148)         (622)         (348)
     Net proceeds from issuance of stock by subsidiaries                           123            --            75           148
     Payments for call agreements                                                   --            --          (140)           --
     Cash transfers (to) from related parties                                     (159)          132          (216)          310
     Repurchase of common stock                                                     --            --           (30)         (625)
     Repurchase of stock of subsidiaries                                            --           (45)          (24)          (42)
     Other, net                                                                    (20)           (1)            4            (5)
                                                                               -------       -------       -------       -------
             Net cash provided by financing activities                             920            94         1,475           105
                                                                               -------       -------       -------       -------
                Net increase (decrease) in cash and cash equivalents            (3,605)         (196)          183          (220)
                Cash and cash equivalents at beginning of year                   5,319           407           224           444
                                                                               -------       -------       -------       -------
                Cash and cash equivalents at end of year                       $ 1,714           211           407           224
                                                                               =======       =======       =======       =======
</TABLE>

See accompanying notes to combined financial statements.

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)

                        December 31, 1999, 1998 and 1997

(1)      Basis of Presentation

         The accompanying combined financial statements include the accounts of
         the subsidiaries and assets of AT&T Corp. ("AT&T") that are attributed
         to Liberty Media Group, as defined below. On March 9, 1999, AT&T
         acquired Tele-Communications, Inc. ("TCI"), the former owner of the
         assets attributed to Liberty Media Group, in a merger transaction (the
         "AT&T Merger"). See note 2. The AT&T Merger has been accounted for
         using the purchase method. Accordingly, Liberty Media Group's assets
         and liabilities have been recorded at their respective fair market
         values therefore, creating a new cost basis. For financial reporting
         purposes the AT&T Merger and related restructuring transactions
         described in note 2 are deemed to have occurred on March 1, 1999.
         Accordingly, for periods prior to March 1, 1999 the assets and
         liabilities attributed to Liberty Media Group and the related combined
         financial statements are sometimes referred to herein as "Old Liberty",
         and for periods subsequent to February 28, 1999 the assets and
         liabilities attributed to Liberty Media Group and the related combined
         financial statements are sometimes referred to herein as "New Liberty".
         The "Company" and "Liberty Media Group" refer to both New Liberty and
         Old Liberty.

         The following table represents the summary balance sheet of Old Liberty
         at February 28, 1999 prior to the restructuring transactions and the
         consummation of the AT&T Merger and the opening summary balance sheet
         of New Liberty subsequent to the restructuring transactions and the
         consummation of the AT&T Merger. Certain pre-merger transactions
         occurring between March 1, 1999 and March 9, 1999 that affected Old
         Liberty's equity, gains on issuance of equity by subsidiaries and stock
         compensation have been reflected in the two-month period ended February
         28, 1999.


<TABLE>
<CAPTION>
                                    Old Liberty    New Liberty
                                    -----------    -----------
                                       (amounts in millions)
<S>                                 <C>            <C>
Assets:
Cash and cash equivalents              $   211        5,319
Other current assets                       648          451
Investments in affiliates                3,971       17,116
Investment in Time Warner                7,361        7,832
Investment in Sprint                     3,381        3,681
Investment in AT&T                       3,856           --
Other investments                        1,257        1,587
Property and equipment, net                532          125
Intangibles and other assets               817       11,159
                                       -------      -------
                                       $22,034       47,270
                                       =======      =======
<PAGE>

Liabilities and Equity:
Current liabilities                    $ 1,446        1,675
Long-term debt                           2,319        1,845
Deferred income taxes                    5,369        9,971
Other liabilities                          168           19
                                       -------      -------
      Total liabilities                  9,302       13,510
                                       -------      -------
Minority interests in equity of
  attributed subsidiaries                  450           39
Obligation to redeem common stock            9            9
Equity                                  12,273       33,712
                                       -------      -------
                                       $22,034       47,270
                                       =======      =======
</TABLE>

                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)

         The following table reflects the recapitalization resulting from the
AT&T Merger (amounts in millions):


<TABLE>
<S>                                                                              <C>
         Total combined equity of Old Liberty                                    $12,273
         Net contribution resulting from the restructuring transactions            2,334
         Purchase accounting adjustments                                          19,105
                                                                                 -------
         Initial combined equity of New Liberty subsequent to the AT&T
             Merger                                                              $33,712
                                                                                 =======
</TABLE>

         The following unaudited condensed results of operations for the years
         ended December 31, 1999 and 1998 were prepared assuming the AT&T Merger
         occurred on January 1, 1998. These pro forma amounts are not
         necessarily indicative of operating results that would have occurred if
         the AT&T Merger had occurred on January 1, 1998.



<TABLE>
<CAPTION>
                                                         Years ended
                                                         December 31,
                                                     ---------------------
                                                     1999             1998
                                                     ----             ----
                                                     (amounts in millions)
<S>                                                 <C>            <C>
              Revenue                                  $964           1,361
              Net loss                              $(2,246)           (302)
              Loss per share                        $ (1.78)          (0.25)
</TABLE>

         At December 31, 1999, Liberty Media Group consisted principally of the
following:


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


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

<PAGE>

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


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



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

                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)

(2)      Merger with AT&T

         As a result of the AT&T Merger, holders of shares of TCI's then
         outstanding Liberty Media Group tracking stock and TCI Ventures Group
         tracking stock were issued shares of a new targeted stock of AT&T. Each
         share of TCI's then outstanding Liberty Media Group Series A tracking
         stock was converted into 2 shares of a newly created class of AT&T
         tracking stock, the AT&T Liberty Media Group Class A tracking stock,
         each share of TCI's then outstanding Liberty Media Group Series B
         tracking stock was converted into 2 shares of a newly created class of
         AT&T tracking stock, the AT&T Liberty Media Group Class B tracking
         stock, each share of TCI's then outstanding TCI Ventures Group Series A
         tracking stock was converted into 1.04 shares of AT&T Liberty Media
         Group Class A tracking stock and each share of TCI's then outstanding
         TCI Ventures Group Series B tracking stock was converted into 1.04
         shares of AT&T Liberty Media Group Class B tracking stock.

         Effective with the AT&T Merger, each share of TCI's Convertible
         Preferred Stock Series C-Liberty Media was converted into 112.5 shares
         of AT&T Liberty Media Group Class A tracking stock and each share of
         TCI's Redeemable Convertible Liberty Media Group Preferred Stock,
         Series H was converted into 1.18125 shares of AT&T Liberty Media Group
         Class A tracking stock. In general, the holders of shares of AT&T
         Liberty Media Group Class A tracking stock and the holders of shares of
         AT&T Liberty Media Group Class B tracking stock will vote together as a
         single class with the holders of shares of AT&T common stock on all
         matters presented to such stockholders, with the holders being entitled
         to three-fortieths (3/40th) of a vote for each share of AT&T Liberty
         Media Group Class A tracking stock held, three-fourths (3/4th) of a
         vote for each share of AT&T Liberty Media Group Class B tracking stock
         held and 1 vote per share of AT&T common stock held.

                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)

         The shares of AT&T Liberty Media Group Tracking Stock issued in the
         AT&T Merger are intended to reflect the separate performance of the
         businesses and assets attributed to Liberty Media Group. Immediately
         prior to the AT&T Merger, certain assets previously attributed to Old
         Liberty (including, among others, the shares of AT&T Common Stock
         received in the merger of AT&T and Teleport Communications Group, Inc.
         ("Teleport") (see note 7), Old Liberty's interests in At Home
         Corporation ("@Home"), the National Digital Television Center, Inc.
         ("NDTC") and Western Tele-Communications, Inc.) were attributed to "TCI
         Group" (a group of TCI's assets, which, prior to the AT&T Merger, was
         comprised primarily of TCI's domestic cable and communications
         business) in exchange for approximately $5.5 billion in cash (the
         "Asset Transfers"). Also, upon consummation of the AT&T Merger, through
         a new tax sharing agreement between Liberty Media Group and AT&T,
         Liberty Media Group is entitled to the benefit of approximately $2
         billion in net operating loss carryforwards available to the entities
         included in TCI's consolidated income tax return as of the date of the
         AT&T Merger. Such net operating loss carryforwards are subject to
         adjustment by the Internal Revenue Service ("IRS") and are subject to
         limitations on usage which may affect the ultimate amount utilized.
         Additionally, certain warrants to purchase shares of General
         Instruments Corporation ("GI Warrants") previously attributed to TCI
         Group were attributed to Liberty Media Group in exchange for
         approximately $176 million in cash. See note 7. Certain agreements
         entered into at the time of the AT&T Merger provide, among other
         things, for preferred vendor status to Liberty Media Group for digital
         basic distribution on AT&T's systems of new programming services
         created by Liberty Media Group and for a renewal of existing
         affiliation agreements. Pursuant to amended corporate governance
         documents for the entities included in Liberty Media Group and certain
         agreements among AT&T and TCI, the business of Liberty Media Group will
         continue to be managed by certain persons who were members of TCI's
         management prior to the AT&T Merger.

(3)      Summary of Significant Accounting Policies

         Cash and Cash Equivalents

         Cash equivalents consist of investments which are readily convertible
         into cash and have maturities of three months or less at the time of
         acquisition.

         Receivables

         Receivables are reflected net of an allowance for doubtful accounts.
         Such allowance at December 31, 1999 and 1998 was not material.

         Program Rights

         Prepaid program rights are amortized on a film-by-film basis over the
         anticipated number of exhibitions. Committed program rights and program
         rights payable are recorded at the estimated cost of the programs when
         the film is available for airing less prepayments. These amounts are
         amortized on a film-by-film basis over the anticipated number of
         exhibitions.

                                                                     (continued)
<PAGE>


                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)

         Investments

         All marketable equity securities held by the Company are classified as
         available-for-sale and are carried at fair value. Unrealized holding
         gains and losses on securities classified as available-for-sale are
         carried net of taxes as a component of accumulated other comprehensive
         earnings in combined equity. Realized gains and losses are determined
         on a specific-identification basis.

         Other investments in which the ownership interest is less than 20% and
         are not considered marketable securities are carried at the lower of
         cost or net realizable value. For those investments in affiliates in
         which the Company's voting interest is 20% to 50%, the equity method of
         accounting is generally used. Under this method, the investment,
         originally recorded at cost, is adjusted to recognize the Company's
         share of net earnings or losses of the affiliates as they occur rather
         then as dividends or other distributions are received, limited to the
         extent of the Company's investment in, advances to and commitments for
         the investee. The Company's share of net earnings or losses of
         affiliates includes the amortization of the difference between the
         Company's investment and its share of the net assets of the investee.
         Recognition of gains on sales of properties to affiliates accounted for
         under the equity method is deferred in proportion to the Company's
         ownership interest in such affiliates.

         Subsequent to the AT&T Merger, changes in the Company's proportionate
         share of the underlying equity of an attributed subsidiary or equity
         method investee, which result from the issuance of additional equity
         securities by such attributed subsidiary or equity investee, generally
         are recognized as gains or losses in the Company's combined statements
         of combined equity.

         Property and Equipment

         Property and equipment, including significant improvements, is stated
         at cost. Depreciation is computed on a straight-line basis using
         estimated useful lives of 3 to 20 years for support equipment and 10 to
         40 years for buildings and improvements.

         Excess Cost Over Acquired Net Assets

         Excess cost over acquired net assets consists of the difference between
         the cost of acquiring non-cable entities and amounts assigned to their
         tangible assets. Such amounts are generally amortized on a
         straight-line basis over 20 years.

         Franchise Costs

         Franchise costs generally include the difference between the cost of
         acquiring cable companies and amounts allocated to their tangible
         assets. Such amounts are amortized on a straight-line basis over 40
         years.

                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)

         Impairment of Long-lived Assets

         The Company periodically reviews the carrying amounts of property,
         plant and equipment and its intangible assets to determine whether
         current events or circumstances warrant adjustments to such carrying
         amounts. If an impairment adjustment is deemed necessary, such loss is
         measured by the amount that the carrying value of such assets exceeds
         their fair value. Considerable management judgment is necessary to
         estimate the fair value of assets, accordingly, actual results could
         vary significantly from such estimates. Assets to be disposed of are
         carried at the lower of their financial statement carrying amount or
         fair value less costs to sell.

         Minority Interests

         Recognition of minority interests' share of losses of attributed
         subsidiaries is generally limited to the amount of such minority
         interests' allocable portion of the common equity of those attributed
         subsidiaries. Further, the minority interests' share of losses is not
         recognized if the minority holders of common equity of attributed
         subsidiaries have the right to cause the Company to repurchase such
         holders' common equity.

         Preferred stock (and accumulated dividends thereon) of attributed
         subsidiaries are included in minority interests in equity of attributed
         subsidiaries. Dividend requirements on such preferred stocks are
         reflected as minority interests in earnings of attributed subsidiaries
         in the accompanying combined statements of operations and comprehensive
         earnings.

         Foreign Currency Translation

         The functional currency of the Company is the United States ("U.S.")
         dollar. The functional currency of the Company's foreign operations
         generally is the applicable local currency for each attributed foreign
         subsidiary and foreign equity method investee. In this regard, the
         functional currency of certain of the Company's attributed foreign
         subsidiaries and foreign equity investees is the Argentine peso, the
         United Kingdom ("UK") pound sterling ("pound sterling" or "pounds"),
         the French franc ("FF") and the Japanese yen ("yen"). Assets and
         liabilities of attributed foreign subsidiaries and foreign equity
         investees are translated at the spot rate in effect at the applicable
         reporting date, and the combined statements of operations and the
         Company's share of the results of operations of its foreign equity
         affiliates are translated at the average exchange rates in effect
         during the applicable period. The resulting unrealized cumulative
         translation adjustment, net of applicable income taxes, is recorded as
         a component of accumulated other comprehensive earnings in combined
         equity.

         Transactions denominated in currencies other than the functional
         currency are recorded based on exchange rates at the time such
         transactions arise. Subsequent changes in exchange rates result in
         transaction gains and losses which are reflected in the accompanying
         combined statements of operations and comprehensive earnings as
         unrealized (based on the applicable period end exchange rate) or
         realized upon settlement of the transactions.

                                                                     (continued)
<PAGE>
                             "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)


         Unless otherwise indicated, convenience translations of foreign
         currencies into U.S. dollars are calculated using the applicable spot
         rate at December 31, 1999, as published in The Wall Street Journal.

         Derivative Instruments and Hedging Activities

         Liberty Media Group has entered into "cashless collar" transactions
         with respect to certain securities attributed to Liberty Media Group.
         The cashless collar provides Liberty Media Group with a put option that
         gives it the right to require its counterparty to buy designated shares
         at a designated price per share and simultaneously provides the
         counterparty a call option giving it the right to buy the same number
         of shares at a designated price per share.

         As Liberty Media Group's cashless collars are designated to specific
         shares of stock attributed to Liberty Media Group and the changes in
         the fair value of the cashless collars are correlated with changes in
         the fair value of the underlying securities, the cashless collars
         function as hedges. Accordingly, changes in the fair value of the
         cashless collars designated to specific shares which are accounted for
         as available-for-sale securities are reported as a component of
         comprehensive earnings (in unrealized gains) along with the changes in
         the fair value of the underlying securities.

         During 1998, the Financial Accounting Standards Board issued Statement
         of Financial Accounting Standards No. 133, Accounting for Derivative
         Instruments and Hedging Activities, ("Statement 133"), which is
         effective for all fiscal years beginning after June 15, 2000. Statement
         133 establishes accounting and reporting standards for derivative
         instruments and hedging activities by requiring that all derivative
         instruments be reported as assets or liabilities and measured at their
         fair values. Under Statement 133, changes in the fair values of
         derivative instruments are recognized immediately in earnings unless
         those instruments qualify as hedges of the (1) fair values of existing
         assets, liabilities, or firm commitments, (2) variability of cash flows
         of forecasted transactions, or (3) foreign currency exposure of net
         investments in foreign operations. Although the Company's management
         has not completed its assessment of the impact of Statement 133 on its
         combined results of operations and financial position, management does
         not expect that the impact of Statement 133 will be significant,
         however, there can be no assurances that the impact will not be
         significant.

         Revenue Recognition

         Programming revenue is recognized in the period during which
         programming is provided, pursuant to affiliation agreements.
         Advertising revenue is recognized, net of agency commissions, in the
         period during which underlying advertisements are broadcast. Cable
         revenue is recognized in the period that services are rendered. Cable
         installation revenue is recognized in the period the related services
         are provided to the extent of direct selling costs. Any remaining
         amount is deferred and recognized over the estimated average period
         that customers are expected to remain connected to the cable
         distribution system.

                                                                     (continued)
<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)

         Stock Based Compensation

         Statement of Financial Accounting Standards No. 123, Accounting for
         Stock-Based Compensation ("Statement 123"), establishes financial
         accounting and reporting standards for stock-based employee
         compensation plans as well as transactions in which an entity issues
         its equity instruments to acquire goods or services from non-employees.
         As allowed by Statement 123, Liberty Media Group continues to account
         for stock-based compensation pursuant to Accounting Principles Board
         Opinion No. 25. Liberty Media Group estimates that compensation expense
         would not be materially different under Statement 123.

         Reclassifications

         Certain prior period amounts have been reclassified for comparability
         with the 1999 presentation.

         Estimates

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

(4)      Loss Per Common Share

         Basic earnings or loss per share ("EPS") is measured as the income or
         loss attributable to common stockholders divided by the weighted
         average outstanding common shares for the period. Diluted EPS is
         similar to basic EPS but presents the dilutive effect on a per share
         basis of potential common shares as if they had been converted at the
         beginning of the periods presented. Potential common shares that have
         an anti-dilutive effect are excluded from diluted EPS.

         The basic and diluted loss attributable to Liberty Media Group common
         stockholders per common share for the ten months ended December 31,
         1999 was computed by dividing the net loss attributable to Liberty
         Media Group common stockholders by the weighted average number of
         common shares outstanding of AT&T Liberty Media Group tracking stock
         during the period. Potential common shares were not included in the
         computations of weighted average shares outstanding because their
         inclusion would be anti-dilutive.

         At December 31, 1999, there were 48 million potential common shares
         consisting of fixed and nonvested performance awards, stock options and
         convertible securities that could potentially dilute future EPS
         calculations in periods of net earnings. No material changes in the
         weighted average outstanding shares or potential common shares occurred
         after December 31, 1999.

                                                                     (continued)
<PAGE>
                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)

(5)  Supplemental Disclosures to Combined Statements of Cash Flows

     Cash paid for interest was $93 million, $32 million, $112 million and $60
     million for the ten months ended December 31, 1999, the two months ended
     February 28, 1999 and the years ended December 31, 1998 and 1997,
     respectively. Cash paid for income taxes during the ten months ended
     December 31, 1999 and the two months ended February 28, 1999 was not
     material. Cash paid for income taxes during the years ended December 31,
     1998 and 1997 was $29 million and $35 million, respectively.

<TABLE>
<CAPTION>
                                       New Liberty                 Old Liberty
                                       ------------   ----------------------------------------
                                       Ten months       Two months
                                         ended            ended             Years ended
                                       December 31,    February 28,         December 31,
                                       ------------    ------------      ---------------------
                                          1999            1999           1998            1997
                                       ------------    ------------      ----            ----
                                                            amounts in millions
<S>                                    <C>             <C>               <C>            <C>
Cash paid for acquisitions:
Fair value of assets acquired            $ 122              --             162             452

Net liabilities assumed                    (13)             --            (107)           (209)
Debt issued to related parties
   and others                               --              --              --            (404)
Deferred tax asset recorded in
   acquisition                              --              --              --             112

Minority interest in equity of
   acquired attributed
   subsidiaries                             --              --              39            (129)

Excess consideration paid over
   carryover basis of net
   assets acquired from related
   party                                    --              --              --             219

Gain in connection with the
   issuance of stock by
   attributed subsidiary                    --              --              (2)             --
                                         -----         -------            ----            ----

   Cash paid for acquisitions            $ 109              --              92              41
                                         =====         =======            ====            ====

</TABLE>

                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)


     Significant noncash investing and financing activities are as follows:

<TABLE>
<CAPTION>
                                                 New Liberty                    Old Liberty
                                                 ------------        ---------------------------------------
                                                  Ten months         Two months
                                                     ended              ended             Years ended
                                                 December 31,        February 28,         December 31,
                                                     1999               1999           1998            1997
                                                 ------------       --------------   -----------------------
                                                                         amounts in millions
<S>                                              <C>                <C>              <C>             <C>
Exchange of attributed subsidiaries
    for limited partnership interest                $135                 --             --             --
                                                    ====              =====           ====            ===
Cost of distribution agreements
    (note 10)                                       $ --                 --             74            173
                                                    ====              =====           ====            ===
Noncash acquisitions of minority
    interests in equity of
    attributed subsidiaries (note
    8):
       Fair value of assets                         $ --                 --           (741)           (29)
       Deferred tax liability
          recorded                                    --                 --            154             --
       Minority interests in equity
          of attributed subsidiaries                  --                 --           (185)            (1)
       Liberty Media Group tracking
          stock issued                                --                 --            772             30
                                                    ----              -----           ----            ---
                                                    $ --                 --             --             --
                                                    ====              =====           ====            ===
Common stock received in exchange
  for option (note 7)                               $ --                 --             --            306
                                                    ====              =====           ====            ===
Preferred stock received in exchange
 for common stock and note
    receivable (note 7)                             $ --                 --             --            371
                                                    ====              =====           ====            ===
</TABLE>


The following table reflects the change in cash and cash equivalents resulting
from the AT&T Merger and related restructuring transactions (amounts in
millions):
<TABLE>
<CAPTION>
<S>                                                                              <C>
Cash and cash equivalents prior to the AT&T Merger                               $   211
    Cash received in the Asset Transfers, net of cash balances transferred
                                                                                   5,284
    Cash paid to TCI Group for GI Warrants                                          (176)
                                                                                 -------
Cash and cash equivalents subsequent to the AT&T Merger                          $ 5,319
                                                                                 =======
</TABLE>
                                                                     (continued)
<PAGE>
                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)

Liberty Media Group ceased to include TV Guide, Inc. ("TV Guide") in its
combined financial results and began to account for TV Guide using the equity
method of accounting, effective March 1, 1999 (see note 8). Liberty Media Group
ceased to include Flextech p.l.c. ("Flextech") and Cablevision S.A.
("Cablevision") in its combined financial results and began to account for
Flextech and Cablevision using the equity method of accounting, effective
January 1, 1997 and October 1, 1997, respectively. The effects of changing the
method of accounting for Liberty Media Group's ownership interests in these
investments from the consolidation method to the equity method are summarized
below:

<TABLE>
<CAPTION>
                                           New Liberty                   Old Liberty
                                           ------------      ---------------------------------------
                                           Ten months         Two months
                                             ended              ended             Years ended
                                           December 31,      February 28,         December 31,
                                             1999              1999            1998            1997
                                           ------------      ------------     ----------------------
                                                             amounts in millions

<S>                                        <C>              <C>                <C>            <C>
Assets (other than cash and cash
    equivalents) reclassified to
    investments in affiliates               $  --              (200)             --            (596)

Liabilities reclassified to
    investments in affiliates                  --               190              --             484
Minority interests in equity of
    attributed subsidiaries
    reclassified to investments in
    affiliates                                 --                63              --             151
                                            -----              ----            ----            ----

Decrease in cash and cash
    equivalents                             $  --                53              --              39
                                            =====              ====            ====            ====
</TABLE>



                                                                     (continued)

<PAGE>

                             "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)

(6)  Investments in Affiliates Accounted for under the Equity Method

     Liberty Media Group has various investments accounted for under the equity
     method. The following table includes Liberty Media Group's carrying amount
     and percentage ownership of the more significant investments in affiliates
     at December 31, 1999 and the carrying amount at December 31, 1998:

<TABLE>
<CAPTION>
                                                              New Liberty                             Old Liberty
                                                   ---------------------------------------        -----------------
                                                           December 31, 1999                      December 31, 1998
                                                   ---------------------------------------        -----------------
                                                   Percentage
                                                   Ownership               Carrying Amount          Carrying Amount
                                                   ----------              ---------------          ---------------
                                                                          amounts in millions
<S>                                                <C>                    <C>                     <C>
USA Networks, Inc. ("USAI") and
    related investments                                   21%                  $ 2,699                    1,042
Telewest Communications plc
    ( "Telewest ")                                        22%                    1,996                      515
Discovery Communications, Inc.
    ("Discovery")                                         49%                    3,441                       49
TV Guide                                                  44%                    1,732                       --
QVC Inc. ( "QVC ")                                        43%                    2,515                      197
Flextech                                                  37%                      727                      320
UnitedGlobalCom, Inc.
    ("UnitedGlobalCom")                                   10%                      505                       --
Jupiter Telecommunications Co., Ltd.
    ("Jupiter")                                           40%                      399                      143
Various foreign equity investments
    (other than Telewest, Flextech and
    Jupiter)
                                                     various                     1,064                      518
Other                                                various                       844                      295
                                                                               -------                    -----
                                                                               $15,922                    3,079
                                                                               =======                    =====
</TABLE>

                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)


         The following table reflects Liberty Media Group's share of earnings
(losses) of affiliates:

<TABLE>
<CAPTION>
                                                     New Liberty                        Old Liberty
                                                    ------------            --------------------------------------------
                                                     Ten months             Two months
                                                        ended                  ended                  Years ended
                                                    December 31,            February 28,              December 31,
                                                        1999                    1999               1998           1997
                                                    ------------            ------------         -------        --------
                                                                            amounts in millions
<S>                                                 <C>                     <C>                 <C>              <C>
         USAI and related investments               $         (20)               10                 30               5
         Telewest                                            (222)              (38)              (134)           (145)
         Discovery                                           (269)               (8)               (39)            (29)
         TV Guide                                             (46)               --                 --              --
         QVC                                                  (11)               13                 64              30
         Flextech                                             (41)               (5)               (21)            (16)
         Fox/Liberty Networks LLC
             ("Fox/Liberty Networks")                         (48)               (1)               (83)             --
         UnitedGlobalCom                                       23                --                 --              --
         Jupiter                                              (54)               (7)               (26)            (23)
         Other foreign investments                           (113)              (15)               (99)            (80)
         Teleport                                              --                --                (32)            (66)
         Sprint Spectrum Holding Company,
             L.P., MinorCo, L.P. and
             PhillieCo Partnership I, L.P.
             (the "PCS Ventures") (note 7)

                                                               --                --               (629)           (493)
         Other                                               (103)              (15)               (65)            (33)
                                                    -------------            ------             ------            ----
                                                    $        (904)              (66)            (1,034)           (850)
                                                    =============            ======             ======            ====
</TABLE>


Summarized unaudited combined financial information for affiliates is as
follows:

<TABLE>
<CAPTION>
                                                             December 31,
                                                      --------------------------
                                                        1999               1998
                                                      -------            -------
                                                          amounts in millions
<S>                                                   <C>                <C>
Combined Financial Position
     Investments                                      $ 1,415              2,003
     Property and equipment, net                        8,885              8,147
     Other intangibles, net                            19,778             14,395
     Other assets, net                                  9,207              7,553
                                                      -------            -------
         Total assets                                 $39,285             32,098
                                                      =======            =======

<PAGE>
     Debt                                             $17,210             15,264
     Other liabilities                                 12,645             11,620
     Owners' equity                                     9,430              5,214
                                                      -------            -------
         Total liabilities and equity                 $39,285             32,098
                                                      =======            =======
</TABLE>

                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)


<TABLE>
<CAPTION>
                                                       New Liberty                                 Old Liberty
                                                      -------------          ------------------------------------------------------
                                                       Ten months             Two months
                                                         ended                  ended                        Years ended
                                                      December 31,            February 28,                    December 31,
                                                          1999                   1999                  1998                  1997
                                                      ------------            ------------           --------              --------
                                                                                  amounts in millions
<S>                                                      <C>                   <C>                  <C>                    <C>
Combined Operations
     Revenue                                             $ 10,492                 2,341                14,062                 7,107
     Operating expenses                                    (9,066)               (1,894)              (13,092)               (7,635)
     Depreciation and amortization                         (1,461)                 (353)               (2,629)               (1,152)
                                                         --------              --------              --------              --------
         Operating income (loss)                              (35)                   94                (1,659)               (1,680)
     Interest expense                                        (886)                 (281)               (1,728)                 (656)
     Other, net                                              (151)                 (127)                 (166)                 (443)
                                                         --------              --------              --------              --------
         Net loss                                        $ (1,072)                 (314)               (3,553)               (2,779)
                                                         ========              ========              ========              ========
</TABLE>

     USAI owns and operates businesses in network and television production,
     television broadcasting, electronic retailing, ticketing operations, and
     internet services. At December 31, 1999, Liberty Media Group directly and
     indirectly held 66.5 million shares of USAI's common stock (as adjusted for
     a subsequent two-for-one stock split). Liberty Media Group also held shares
     directly in certain subsidiaries of USAI which are exchangeable into 79.0
     million shares of USAI common stock (as adjusted for the two-for-one stock
     split). Liberty Media Group's direct ownership of USAI is currently
     restricted by Federal Communications Commission ("FCC") regulations. The
     exchange of these shares can be accomplished only if there is a change to
     existing regulations or if Liberty Media Group obtains permission from the
     FCC. If the exchange of subsidiary stock into USAI common stock was
     completed at December 31, 1999, Liberty Media Group would own 145.5 million
     shares (as adjusted for the two-for-one stock split) or approximately 21%
     (on a fully-diluted basis) of USAI common stock. USAI's common stock had a
     closing market value of $27.63 per share (as adjusted for the two-for-one
     stock split) on December 31, 1999. Liberty Media Group accounts for its
     investments in USAI and related subsidiaries on a combined basis under the
     equity method.

     In February 1998, USAI paid cash and issued shares and one of its
     subsidiaries issued shares in connection with the acquisition of certain
     assets from Universal Studios, Inc. (the "Universal Transaction"). Liberty
     Media Group recorded an increase to its investment in USAI of $54 million
     and an increase to combined equity of $33 million (after deducting deferred
     income taxes of $21 million) as a result of this share issuance.

     USAI issued shares in June 1998 to acquire the remaining stock of
     Ticketmaster Group, Inc. which it did not previously own (the "Ticketmaster

<PAGE>

     Transaction"). Liberty Media Group recorded an increase to its investment
     in USAI of $52 million and an increase to combined equity of $31 million
     (after deducting deferred income taxes of $21 million) as a result of this
     share issuance. No gain was recognized in the combined statement of
     operations and comprehensive earnings for either the Universal Transaction
     or the Ticketmaster Transaction due primarily to Liberty Media Group's
     intention to purchase additional equity interests in USAI.

                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)


     In connection with the Universal Transaction, Liberty Media Group was
     granted an antidilutive right with respect to any future issuance of USAI's
     common stock, subject to certain limitations, that enables it to maintain
     its percentage ownership interests in USAI.

     Telewest currently operates and constructs cable television and telephone
     systems in the UK. At December 31, 1999 Liberty Media Group indirectly
     owned 506 million of the issued and outstanding Telewest ordinary shares.
     The reported closing price on the London Stock Exchange of Telewest
     ordinary shares was $5.34 per share at December 31, 1999.

     Effective September 1, 1998, Telewest and General Cable PLC ("General
     Cable") consummated a merger (the "General Cable Merger") in which holders
     of General Cable received New Telewest shares and cash. Based upon
     Telewest's closing price of $1.51 per share on April 14, 1998, the General
     Cable Merger was valued at approximately $1.1 billion. The cash portion of
     the General Cable Merger was financed through an offer to qualifying
     Telewest shareholders for the purchase of approximately 261 million new
     Telewest shares at a price of $1.57 per share (the "Telewest Offer").
     Liberty Media Group subscribed to 85 million Telewest ordinary shares at an
     aggregate cost of $133 million in connection with the Telewest Offer. In
     connection with the General Cable Merger, Liberty Media Group converted its
     entire holdings of Telewest convertible preference shares (133 million
     shares) into Telewest ordinary shares. As a result of the General Cable
     Merger, Liberty Media Group's ownership interest in Telewest decreased to
     22%. In connection with the increase in Telewest's equity, net of the
     dilution of Liberty Media Group's interest in Telewest, that resulted from
     the General Cable Merger, Liberty Media Group recorded a non-cash gain of
     $60 million (before deducting deferred income taxes of $21 million) during
     1998.

     The Class A common stock of TV Guide is publicly traded. At December 31,
     1999, Liberty Media Group held 58 million shares of TV Guide Class A common
     stock (as adjusted for a two-for-one stock split) and 75 million shares of
     TV Guide Class B common stock (as adjusted for a two-for-one stock split).
     See note 8. The TV Guide Class B common stock is convertible, one-for-one,
     into TV Guide Class A common stock. The closing price for TV Guide Class A
     common stock was $43.00 per share on December 31, 1999.

     Flextech develops and sells a variety of television programming in the UK.
     At December 31, 1999, Liberty Media Group indirectly owned 58 million
     Flextech ordinary shares. The reported closing price on the London Stock
     Exchange of the Flextech ordinary shares was $18.58 per share at December
     31, 1999.

                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)

     In April 1997, Flextech and BBC Worldwide Limited ("BBC Worldwide") formed
     two separate joint ventures (the "BBC Joint Ventures") and entered into
     certain related transactions. The consummation of the BBC Joint Ventures
     and related transactions resulted in, among other things, a reduction of
     Liberty Media Group's economic ownership interest in Flextech from 46.2% to
     36.8%. Liberty Media Group continues to maintain a voting interest in
     Flextech of approximately 50%. As a result of such dilution, Liberty Media
     Group recorded a $152 million increase to the carrying amount of Liberty
     Media Group's investment in Flextech, a $53 million increase to deferred
     income tax liability, a $66 million increase to combined equity and a $33
     million increase to minority interests in equity of attributed
     subsidiaries. No gain was recognized in the combined statement of
     operations and comprehensive earnings due primarily to certain contingent
     obligations of Liberty Media Group with respect to one of the BBC Joint
     Ventures (see note 15).

     Liberty Media Group and The News Corporation Limited ("News Corp.") each
     previously owned 50% of Fox/Liberty Networks, which operates national and
     regional sports networks. Prior to the first quarter of 1998, Liberty Media
     Group had no obligation, nor intention, to fund Fox/Liberty Networks.
     During 1998, Liberty Media Group made the determination to provide funding
     to Fox/Liberty Networks based on specific transactions consummated by
     Fox/Liberty Networks. Consequently, Liberty Media Group's share of losses
     of Fox/Liberty Networks for the year ended December 31, 1998 included
     previously unrecognized losses of Fox/Liberty Networks of approximately $64
     million. Losses for Fox/Liberty Networks were not recognized in prior
     periods due to the fact that Liberty Media Group's investment in
     Fox/Liberty Networks was less than zero. During 1999, News Corp. acquired
     Liberty Media Group's 50% interest in Fox/Liberty Networks (see note 7).

     On September 30, 1999, Liberty Media Group purchased 9.9 million class B
     shares of UnitedGlobalCom for approximately $493 million in cash.
     UnitedGlobalCom is the largest global broadband communications provider of
     video, voice and data services with operations in over 20 countries
     throughout the world. At December 31, 1999, Liberty Media Group owned an
     approximate 10% economic ownership interest representing an approximate 36%
     voting interest in UnitedGlobalCom. The closing price for UnitedGlobalCom
     Class A common stock was $70.63 per share on December 31, 1999. The
     UnitedGlobalCom Class B common stock is convertible, on a one-for-one
     basis, into UnitedGlobalCom Class A common stock.

     During the year ended December 31, 1997, Teleport issued 6.6 million shares
     of its Class A common stock for certain acquisitions and consummated a
     public offering of 7.3 million shares of its Class A common stock. As a
     result of the increase in Teleport's equity, net of the dilution of Liberty
     Media Group's ownership interest in Teleport that resulted from these
     transactions, Liberty Media Group recognized non-cash gains aggregating
     $112 million (before deducting deferred income tax expense of $43 million).

     On April 22, 1998, Teleport completed a merger transaction with ACC Corp.
     As a result, Liberty Media Group's interest in Teleport was reduced to
     approximately 26%. In connection with the increase in Teleport's equity,
     net of the dilution of Liberty Media Group's interest in Teleport, that
     resulted from the merger, Liberty Media Group recorded a non-cash gain of
     $201 million (before deducting deferred income tax expense of $71 million).

                                                                     (continued)
<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)


     On October 9, 1997, Liberty Media Group sold a portion of its 51% interest
     in Cablevision to unaffiliated third parties. In connection with such sale
     and certain related transactions, Liberty Media Group recognized a gain of
     $49 million. Liberty Media Group's equity interest in Cablevision was 28%
     at December 31, 1999.

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

     Certain of Liberty Media Group's affiliates are general partnerships and,
     as such, are liable as a matter of partnership law for all debts (other
     than non-recourse debts) of that partnership in the event liabilities of
     that partnership were to exceed its assets.

(7)  Investments in Available-for-sale Securities and Others

     Investments in available-for-sale securities and others are summarized as
     follows:

<TABLE>
<CAPTION>
                                                                                New Liberty         Old Liberty
                                                                               ------------         -----------
                                                                                          December 31,
                                                                               --------------------------------
                                                                                   1999                 1998
                                                                               ------------         -----------
                                                                                   amounts in millions
<S>                                                                            <C>                     <C>
         Sprint Corporation ("Sprint") (a)                                     $  10,186                2,446
         Time Warner, Inc. ("Time Warner") (b)                                     8,202                7,083
         News Corp. (c)                                                            2,403                   --
         General Instrument Corporation ("General Instrument") (d)                 3,430                  396
         Other available-for-sale securities                                       3,773                  283
         AT&T (e)                                                                     --                3,556
         Other investments, at cost, and related receivables (f)
                                                                                     985                  743
                                                                               ---------              -------
                                                                                  28,979               14,507
             Less short-term investments                                             378                  124
                                                                               ---------              -------
                                                                               $  28,601               14,383
                                                                               =========              =======
</TABLE>


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

                                                                     (continued)

<PAGE>
                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)


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

     The PCS Ventures included Sprint Spectrum Holding Company, L. P. and
     MinorCo, L.P. (collectively, "Sprint PCS") and PhillieCo Partnership I,
     L.P. ("PhillieCo"). The partners of each of the Sprint PCS partnerships
     were subsidiaries of Sprint, Comcast Corporation ("Comcast"), Cox
     Communications, Inc. ("Cox") and Liberty Media Group. The partners of
     PhillieCo were subsidiaries of Sprint, Cox and Liberty Media Group. Liberty
     Media Group had a 30% partnership interest in each of the Sprint PCS
     partnerships and a 35% partnership interest in PhillieCo.

     On November 23, 1998, Liberty Media Group, Comcast, and Cox exchanged their
     respective interests in Sprint PCS and PhillieCo (the "PCS Exchange") for
     shares of Sprint PCS Group Stock, which tracks the performance of Sprint's
     then newly created PCS Group (consisting initially of the PCS Ventures and
     certain PCS licenses which were separately owned by Sprint). The Sprint PCS
     Group Stock collectively represents an approximate 17% voting interest in
     Sprint. As a result of the PCS Exchange, Liberty Media Group, through the
     trust established pursuant to the Final Judgment, holds the Sprint
     Securities which consists of shares of Sprint PCS Group Stock, as well as
     certain additional securities of Sprint exercisable for or convertible into
     such securities, representing approximately 24% of the equity value of
     Sprint attributable to its PCS Group and less than 1% of the voting
     interest in Sprint. Through November 23, 1998, Liberty Media Group
     accounted for its interest in the PCS Ventures using the equity method of
     accounting; however, as a result of the PCS Exchange, Liberty Media Group's
     less than 1% voting interest in Sprint and the Final Judgment, Liberty
     Media Group no longer exercises significant influence with respect to its
     investment in the PCS Ventures. Accordingly, Liberty Media Group accounts
     for its investment in the Sprint PCS Group Stock as an available-for-sale
     security.

     As a result of the PCS Exchange, Liberty Media Group recorded a non-cash
     gain of $1.9 billion (before deducting deferred income taxes of $647
     million) during the fourth quarter of 1998 based on the difference between
     the carrying amount of Liberty Media Group's interest in the PCS Ventures
     and the fair value of the Sprint Securities received.

                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)


     In September 1999, a trust for Liberty Media Group's benefit entered into a
     four and one-half year "cashless collar" with a financial institution with
     respect to 35 million shares of Sprint PCS Group Stock (as adjusted for a
     two-for-one stock split), secured by 35 million shares of such stock (as
     adjusted for a two-for-one stock split). The collar provides the trust with
     a put option that gives it the right to require its counterparty to buy 35
     million shares of Sprint PCS Group Stock from the trust in five tranches in
     approximately four and one-half years for a weighted average price of
     $27.62 per share (as adjusted for a two-for-one stock split). Liberty Media
     Group simultaneously sold a call option giving the counterparty the right
     to buy the same shares of stock from the trust in five tranches in
     approximately four and one-half years for a weighted average price of
     $57.42 per share (as adjusted for a two-for-one stock split).

     Additionally, on December 15, 1999, the trust entered into a "cashless
     collar" with a financial institution with respect to 18 million shares of
     Sprint PCS Group Stock (as adjusted for a two-for-one stock split). The
     collar consists of a put option that gives the trust the right to require
     its counterparty to buy 18 million shares of Sprint PCS Group Stock (as
     adjusted for a two-for-one stock split) from the trust in three tranches in
     approximately two years for $50.00 per share (as adjusted for a two-for-one
     stock split). The counterparty has a call option giving the counterparty
     the right to buy the same shares from the trust in three tranches in
     approximately two years for $65.23 per share (as adjusted for a two-for-one
     stock split). The put and the call options of each of these collars were
     equally priced, resulting in no cash cost to the trust or Liberty Media
     Group.

(b)  Liberty Media Group holds shares of a series of Time Warner's series common
     stock with limited voting rights (the "TW Exchange Stock") that are
     convertible into an aggregate of 114 million shares of Time Warner common
     stock. Liberty Media Group accounts for its investment in Time Warner as an
     available-for-sale security.

     On June 24, 1997, Liberty Media Group granted Time Warner an option to
     acquire the business of Southern Satellite Systems, Inc. (the "Southern
     Business") from Liberty Media Group. Liberty Media Group received 6.4
     million shares of TW Exchange Stock valued at $306 million in consideration
     for the grant. Pursuant to the option, Time Warner acquired the Southern
     Business, effective January 1, 1998, for $213 million in cash. Liberty
     Media Group recognized a $515 million pre-tax gain in connection with such
     transaction in the first quarter of 1998.

                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)


     In March 1999, Liberty Media Group entered into a seven-year "cashless
     collar" with a financial institution with respect to 15 million shares of
     Time Warner common stock, secured by 15 million shares of its TW Exchange
     Stock. This cashless collar provides Liberty Media Group with a put option
     that gives it the right to require its counterparty to buy 15 million Time
     Warner shares from Liberty Media Group in approximately seven years for
     $67.45 per share. Liberty Media Group simultaneously sold a call option
     giving the counterparty the right to buy the same number of Time Warner
     shares from Liberty Media Group in approximately seven years for $158.33
     per share. The put and the call options were equally priced, resulting in
     no cash cost to Liberty Media Group.

(c)  On July 15, 1999, News Corp. acquired Liberty Media Group's 50% interest in
     Fox/Liberty Networks in exchange for 51.8 million News Corp. American
     Depository Receipts ( "ADRs ") representing preferred limited voting
     ordinary shares of News Corp. Of the 51.8 million ADRs received, 3.6
     million were placed in an escrow (the "Escrow Shares ") pending an
     independent third party valuation, as of the third anniversary of the
     transaction. The remainder of the 51.8 million ADRs received (the
     "Restricted Shares ") are subject to a two-year lockup which restricts any
     transfer of the securities for a period of two years from the date of the
     transaction. Liberty Media Group recorded the ADRs at fair value of $1,403
     million, which included a discount from market value for the Restricted
     Shares due to the two-year restriction on transfer, resulting in a $13
     million gain on the transaction. In a related transaction, Liberty Media
     Group acquired from News Corp. 28.1 million additional ADRs representing
     preferred limited voting ordinary shares of News Corp. for approximately
     $695 million. Liberty Media Group accounts for its investment in News Corp.
     as an available-for-sale security, with the exception of the Restricted
     Shares and the Escrow Shares.

(d)  On July 17, 1998, TCI acquired 21.4 million shares of restricted stock of
     General Instrument in exchange for (i) certain of the assets of the NDTC's
     set-top authorization business, (ii) the license of certain related
     software to General Instrument, (iii) a $50 million promissory note from
     TCI to General Instrument and (iv) a nine year revenue guarantee from TCI
     in favor of General Instrument. In connection therewith, NDTC also entered
     into a service agreement pursuant to which it will provide certain
     postcontract services to General Instrument's set-top authorization
     business. The 21.4 million shares of General Instrument common stock were,
     in addition to other transfer restrictions, originally restricted as to
     their sale by Liberty Media Group for a three year period. Liberty Media
     Group recorded its investment in such shares at fair value which included a
     discount attributable to the above-described liquidity restriction.

                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)


     On January 5, 2000, Motorola, Inc. completed the acquisition of General
     Instrument through a merger of General Instrument with a wholly owned
     subsidiary of Motorola. In the merger, each outstanding share of General
     Instrument common stock was converted into the right to receive 0.575
     shares of Motorola common stock. In connection with the merger Liberty
     Media Group received 18 million shares and warrants to purchase 12 million
     shares of Motorola common stock in exchange for its holdings in General
     Instrument. Subsequent to the merger, the Motorola securities are no longer
     subject to the three year restriction and accordingly, Liberty Media Group
     accounted for its investment in General Instrument as an available-for-sale
     security at December 31, 1999. Liberty Media Group has agreed not to
     transfer or encumber the Motorola securities for a specified period which
     is less than one year.

     Liberty Media Group's ability to exercise warrants to purchase 6.1 million
     shares of Motorola common stock are subject to AT&T satisfying the terms of
     a purchase commitment in 2000. AT&T has agreed to pay Liberty Media Group
     $14.35 for each warrant that does not vest as a result of the purchase
     commitment not being met.

(e)  During July 1998, Teleport was acquired by AT&T and Liberty Media Group
     received in exchange for all of its interest in Teleport approximately 70.4
     million shares of AT&T common stock. Liberty Media Group recognized a $2.3
     billion gain (excluding related tax expense of $883 million) on such
     transaction during the third quarter of 1998 based on the difference
     between the carrying value of Liberty Media Group's interest in Teleport
     and the fair value of the AT&T common stock received.

(f)  On August 1, 1997, Liberty IFE, Inc., a wholly-owned subsidiary of Liberty
     Media Group, which held non-voting Class C common stock of International
     Family Entertainment, Inc. ( "IFE ") ( "Class C Stock ") and $23 million of
     IFE 6% convertible secured notes due 2004, convertible into Class C Stock (
     "Convertible Notes "), contributed its Class C Stock and Convertible Notes
     to Fox Kids Worldwide, Inc. ( "FKW ") in exchange for a new series of 30
     year non-convertible 9% preferred stock of FKW with a stated value of $345
     million. As a result of the exchange, Liberty Media Group recognized a
     pre-tax gain of approximately $304 million during the third quarter of
     1997.

     Investments in available-for-sale securities are summarized as follows:

<TABLE>
<CAPTION>
                                                                                New Liberty        Old Liberty
                                                                                -----------        -----------
                                                                                          December 31,
                                                                                ------------------------------
                                                                                   1999                 1998
                                                                                -----------        -----------
                                                                                   amounts in millions
<S>                                                                          <C>                        <C>
         Equity securities:
             Fair value                                                      $       24,472               13,243
             Gross unrealized holding gains                                          11,457                4,875
             Gross unrealized holding losses                                           (646)                  --
         Debt securities:
             Fair value                                                      $        1,995                   --
             Gross unrealized holding losses                                            (22)                  --
</TABLE>



                                                                     (continued)
<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)


     Management of Liberty Media Group estimates the market value, calculated
     using a variety of approaches including multiple of cash flow, per
     subscriber value, a value of comparable public or private businesses or
     publicly quoted market prices, of all of Liberty Media Group's investments
     in available-for-sale securities and others aggregated $29.2 billion and
     $11.2 billion at December 31, 1999 and December 31, 1998, respectively. No
     independent appraisals were conducted for those assets.

(8)  Acquisitions and Dispositions

     During July 1997, the 10% minority interest in Encore Media Corporation
     ("EMC") was purchased by Liberty Media Group for approximately 2.4 million
     shares of TCI's then outstanding Liberty Media Group tracking stock. Such
     10% interest in EMC was accounted for as an acquisition of a minority
     interest and resulted in an increase of $30 million in combined equity.

     On January 12, 1998, Liberty Media Group acquired from a minority
     shareholder of TV Guide, formerly named United Video Satellite Group, Inc.
     ("UVSG"), 49.6 million shares of UVSG Class A common stock (as adjusted for
     a two-for-one stock split) in exchange for shares of TCI's then outstanding
     Liberty Media Group tracking stock. The aggregate value assigned to the
     shares issued by TCI was based upon the market value of such shares at the
     time the transaction was announced. Such transaction was accounted for as
     an acquisition of minority interest. As a result of such transaction,
     Liberty Media Group increased its ownership in the equity of UVSG to
     approximately 73% and the voting power increased to 93%. In connection with
     the issuance of TCI's then outstanding Liberty Media Group tracking stock
     in such transaction, Liberty Media Group recorded the total purchase price
     of $346 million as an increase to combined equity.

     Effective February 1, 1998, Turner-Vision, Inc. ("Turner Vision")
     contributed the assets, obligations and operations of its retail C-band
     satellite business to Superstar/Netlink Group LLC ("SNG") in exchange for
     an approximate 20% interest in SNG. As a result of such transaction,
     Liberty Media Group's ownership interest in SNG decreased to approximately
     80%. In connection with the increase in SNG's equity, net of the dilution
     of Liberty Media Group's ownership interest in SNG, that resulted from such
     transaction, Liberty Media Group recognized a gain of $38 million (before
     deducting deferred income taxes of $15 million). Turner Vision's
     contribution to SNG was accounted for as a purchase and the $61 million
     excess of the purchase price over the fair value of the net assets acquired
     was recorded as excess cost and is being amortized over five years.

     On August 24, 1998, Liberty Media Group purchased 100% of the issued and
     outstanding common stock of Pramer S.A. ("Pramer"), an Argentine
     programming company, for a total purchase price of $97 million, which was
     satisfied by $32 million in cash and the issuance of notes payable in the
     amount of $65 million. Such transaction was accounted for under the
     purchase method. Accordingly, the results of operations of Pramer have been
     included with those of Liberty Media Group since August 24, 1998. The $101
     million excess cost over acquired net assets is being amortized over ten
     years.


                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)


     On November 19, 1998, Liberty Media Group exchanged, in a merger
     transaction, 10.1 million shares of TCI's then outstanding Liberty Media
     Group tracking stock for shares of Tele-Communications International, Inc.
     ("TINTA") common stock not beneficially owned by Liberty Media Group. Such
     transaction was accounted for by Liberty Media Group as an acquisition of
     minority interest in equity of attributed subsidiaries. The aggregate value
     assigned to the shares issued by Liberty Media Group was based upon the
     market value of the Liberty Media Group Series A tracking stock at the time
     the merger was announced. In connection with the issuance of TCI's then
     outstanding Liberty Media Group tracking stock in such merger transaction,
     Liberty Media Group recorded the total purchase price of $426 million as an
     increase to combined equity.

     On March 1, 1999, UVSG and News Corp. completed a transaction whereby UVSG
     acquired News Corp.'s TV Guide properties, creating a broader platform for
     offering television guide services to consumers and advertisers, and UVSG
     was renamed TV Guide. News Corp. received total consideration of $1.9
     billion including $800 million in cash, 22.5 million shares of UVSG's Class
     A common stock and 37.5 million shares of UVSG's Class B common stock
     valued at an average of $18.65 per share. In addition, News Corp. purchased
     approximately 6.5 million additional shares of UVSG Class A common stock
     for $129 million in order to equalize its ownership with that of Liberty
     Media Group. As a result of these transactions, and another transaction
     completed on the same date, News Corp, Liberty Media Group and TV Guide's
     public stockholders own on an economic basis approximately 44%, 44% and
     12%, respectively, of TV Guide. Following such transactions, News Corp. and
     Liberty Media Group each have approximately 49% of the voting power of TV
     Guide's outstanding stock. In connection with the increase in TV Guide's
     equity, net of dilution of Liberty Media Group's ownership interest in TV
     Guide, Liberty Media Group recognized a gain of $372 million (before
     deducting deferred income taxes of $147 million). Upon consummation,
     Liberty Media Group began accounting for its interest in TV Guide under the
     equity method of accounting.

(9)  Liberty Digital, Inc.

     Effective July 11, 1997, a wholly-owned subsidiary of Liberty Digital (then
     named TCI Music) was merged with and into DMX, Inc. with DMX as the
     surviving corporation (the "DMX Merger"). As a result of the DMX Merger,
     stockholders of DMX became stockholders of TCI Music.

     In connection with the DMX Merger, TCI granted to each stockholder who
     became a stockholder of TCI Music pursuant to the DMX Merger, one right (a
     "Right") with respect to each whole share of TCI Music Series A common
     stock acquired by such stockholder in the DMX Merger pursuant to the terms
     of a Rights Agreement among TCI, TCI Music and the rights agent (the
     "Rights Agreement").

     Each Right entitled the holder to require TCI to purchase from such holder
     one share of TCI Music Series A common stock for $8.00 per share, subject
     to reduction by the aggregate amount per share of any dividend and certain
     other distributions, if any, made by TCI Music to its stockholders, and,
     payable at the election of TCI, in cash, a number of shares of TCI's then
     outstanding TCI Group Series A tracking stock, having an equivalent value
     or a combination thereof, if during the one-year period beginning on the
     effective date of the DMX Merger, the price of TCI Music Series A common
     stock did not equal or exceed $8.00 per share for a period of at least 20
     consecutive trading days.

                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)


     Effective with the DMX Merger, TCI beneficially owned approximately 45.7%
     of the outstanding shares of TCI Music Series A common stock and 100% of
     the outstanding shares of TCI Music Series B common stock, which
     represented 89.6% of the equity and 98.7% of the voting power of TCI Music.
     Simultaneously with the DMX Merger, Liberty Media Group acquired the
     TCI-owned TCI Music common stock by agreeing to reimburse TCI for any
     amounts required to be paid by TCI pursuant to TCI's contingent obligation
     under the Rights Agreement to purchase up to 15 million shares (7 million
     of which were owned by Liberty Media Group) of TCI Music Series A common
     stock and issuing an $80 million promissory note (the "Music Note") to TCI.
     Liberty Media Group recorded its contingent obligation to purchase such
     shares under the Rights Agreement as a component of minority interest in
     equity of attributed subsidiaries in the accompanying combined financial
     statements. TCI Music was included in the combined financial results of
     Liberty Media Group as of the date of the DMX Merger. Due to the related
     party nature of the transaction, the $86 million excess of the
     consideration paid over the carryover basis of the TCI Music common stock
     acquired by Liberty Media Group from TCI was reflected as a decrease in
     combined equity. The Music Note was repaid during 1999.

     Prior to the July 1998 expiration of the Rights, Liberty Media Group was
     notified of the tender of 4.9 million shares of TCI Music Series A common
     stock and associated Rights. On August 27, 1998, Liberty Media Group paid
     $39 million to satisfy TCI's obligation under the Rights Agreement. Such
     transaction was recorded as an acquisition of minority interest in equity
     of attributed subsidiaries.

     On September 9, 1999, Liberty Media Group and TCI Music completed a
     transaction (the "Liberty Digital Transaction") pursuant to which Liberty
     Media Group contributed to TCI Music substantially all of its directly held
     internet content and interactive television assets, its rights to provide
     interactive video services on AT&T's cable television systems and a
     combination of cash and notes receivable equal to $150 million. In
     exchange, TCI Music issued common stock and convertible preferred stock to
     Liberty Media Group and was renamed Liberty Digital, Inc.

     During 1999, Liberty Digital issued approximately 4.8 million shares of
     common stock in connection with the conversion of its preferred stock and
     approximately 2.8 million shares of common stock in connection with the
     exercise of certain employee stock options. In connection with the increase
     in Liberty Digital's equity, net of the dilution of Liberty Media Group's
     interest in Liberty Digital, that resulted from such stock issuances,
     Liberty Media Group recorded a $108 million increase to combined equity.

(10) At Home Corporation

     During 1998, @Home completed a public offering of @Home common stock and
     issued 1.2 million shares of common stock in certain acquisitions. As a
     result of the increase in @Home's equity in connection with these stock
     issuances, net of the dilution of Liberty Media Group's ownership interest
     in @Home, Liberty Media Group recognized a gain of $51 million.

                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)


     During 1997, @Home issued shares of convertible preferred stock and
     completed its initial public offering of @Home common stock. In connection
     with the increase in @Home's equity, net of the dilution of Liberty Media
     Group's ownership interest in @Home resulting from these stock issuances,
     Liberty Media Group recognized a gain of $60 million during the third
     quarter of 1997.

     In connection with exclusive distribution agreements entered into between
     @Home and certain cable operators, @Home issued warrants to such cable
     operators to purchase shares of @Home's common stock. Of these warrants,
     warrants to purchase 11.2 million shares were exercisable as of December
     31, 1998. During the year ended December 31, 1998, @Home recorded non-cash
     charges of $50 million to operations based on the fair value of 1 million
     shares which were underlying warrants which became exercisable during the
     period. Such charges are included in "cost of distribution agreements" in
     the accompanying combined statements of operations.

(11) Long-Term Debt

     Debt is summarized as follows:

<TABLE>
<CAPTION>

                                                                     Weighted
                                                                      average
                                                                     interest             December 31,
                                                                       rate            ------------------
                                                                       1999            1999          1998
                                                                     --------          ----          ----
                                                                                    amounts in millions
<S>                                                                 <C>             <C>              <C>
         Parent company debt:
             Bank credit facilities                                    5.7%         $       390            529
             Senior notes (a)                                          7.875%               741             --
             Senior debentures (a)                                     8.5%                 494             --
             Senior exchangeable debentures (b)                        4.0%               1,022             --
                                                                                         ------          -----
                                                                                          2,647            529
         Debt of subsidiaries:
             Bank credit facilities                                    6.2%                 573          1,500
             Convertible subordinated debentures (c)                    --                   --            574
             Other debt, at varying rates                                                    57            293
                                                                                         ------          -----
                                                                                            630          2,367
                                                                                         ------          -----
             Total debt                                                                   3,277          2,896
         Less current maturities                                                            554            578
                                                                                         ------          -----
             Total long-term debt                                                   $     2,723          2,318
                                                                                         ======          =====
</TABLE>


     (a)  On July 7, 1999, Liberty Media Group received net cash proceeds of
          approximately $741 million and $494 million from the issuance of
          7-7/8% Senior Notes due 2009 (the "Senior Notes ") and 8-1/2% Senior
          Debentures due 2029 (the "Senior Debentures "), respectively. The
          Senior Notes, which are stated net of unamortized discount of $9
          million, have an aggregate principal amount of $750 million and the
          Senior Debentures, which are stated net of unamortized discount of $6
          million, have an aggregate principal amount of $500 million. Interest
          on the Senior Notes and the Senior Debentures is payable on January 15
          and July 15 of each year. The proceeds were used to repay outstanding
          borrowings under certain of Liberty Media Group's credit facilities,
          which were subsequently canceled.

                                                                     (continued)
<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)


     (b)  On November 16, 1999, Liberty Media Group received net cash proceeds
          of $854 million from the issuance of 4% Senior Exchangeable Debentures
          due 2030. The exchangeable debentures have an aggregate principal
          amount of $869 million. Each debenture has a $1,000 face amount and is
          exchangeable at the holder's option for the value of 22.9486 shares of
          Sprint PCS Group Stock (as adjusted for a two-for-one stock split).
          This amount will be paid only in cash until the later of December 31,
          2001 and the date the direct and indirect ownership level of Sprint
          PCS Group Stock owned by Liberty Media Group falls below a designated
          level, after which, at Liberty Media Group's election, Liberty Media
          Group may pay the amount in cash, Sprint PCS Group Stock or a
          combination thereof. Interest on these exchangeable debentures is
          payable on May 15 and November 15 of each year. The carrying amount of
          the exchangeable debentures in excess of the principal amount (the
          "Contingent Portion) is based on the fair value of the underlying
          Sprint PCS Group Stock. The increase or decrease in the Contingent
          Portion is recorded as an increase or decrease to interest expense in
          the combined statement of operations and comprehensive earnings.

     (c)  On April 8, 1999, Liberty Media Group redeemed all of its outstanding
          4-1/2% Convertible Subordinated Debentures due February 15, 2005 with
          a principal amount of $345 million. The debentures were convertible
          into shares of AT&T Liberty Media Group Class A tracking stock at a
          conversion price of $23.54, or 42.48 shares per $1,000 principal
          amount. Certain holders of the debentures had exercised their rights
          to convert their debentures and 14.6 million shares of AT&T Liberty
          Media Group tracking stock were issued to such holders. In connection
          with such issuance of AT&T Liberty Media Group tracking stock, Liberty
          Media Group recorded a $354 million increase to combined equity.

     At December 31, 1999, Liberty Media Group had approximately $160 million in
     unused lines of credit under its bank credit facilities. The bank credit
     facilities of Liberty Media Group generally contain restrictive covenants
     which require, among other things, the maintenance of certain financial
     ratios, and include limitations on indebtedness, liens, encumbrances,
     acquisitions, dispositions, guarantees and dividends. Liberty Media Group
     was in compliance with its debt covenants at December 31, 1999.
     Additionally, Liberty Media Group pays fees ranging from .15% to .375% per
     annum on the average unborrowed portions of the total amounts available for
     borrowings under bank credit facilities.

     The U.S. dollar equivalent of the annual maturities of Liberty Media
     Group's debt for each of the next five years are as follows: 2000: $554
     million; 2001: $72 million; 2002: $80 million; 2003: $99 million and 2004:
     $145 million.

     Based on quoted market prices, the fair value of Liberty Media Group's debt
     at December 31, 1999 is as follows (amounts in millions):

<TABLE>
<CAPTION>
<S>                                                                 <C>
                 Senior Notes                                       $      742
                 Senior Debentures                                         506
                 4% Senior Exchangeable Debentures                       1,088
</TABLE>

     Liberty Media Group believes that the carrying amount of the remainder of
     its debt approximated its fair value at December 31, 1999.

                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)


(12) Income Taxes

     Subsequent to the AT&T Merger, Liberty Media Group is included in the
     consolidated federal income tax return of AT&T and party to a tax sharing
     agreement with AT&T (the "AT&T Tax Sharing Agreement"). Liberty Media Group
     calculates its respective tax liability on a separate return basis. The
     income tax provision for Liberty Media Group is calculated based on the
     increase or decrease in the tax liability of the AT&T consolidated group
     resulting from the inclusion of those items in the consolidated tax return
     of AT&T which are attributable to Liberty Media Group.

     Under the AT&T Tax Sharing Agreement, Liberty Media Group will receive a
     cash payment from AT&T in periods when it generates taxable losses and such
     taxable losses are utilized by AT&T to reduce the consolidated income tax
     liability. This utilization of taxable losses will be accounted for by
     Liberty Media Group as a current federal intercompany income tax benefit.
     To the extent such losses are not utilized by AT&T, such amounts will be
     available to reduce federal taxable income generated by Liberty Media Group
     in future periods, similar to a net operating loss carryforward, and will
     be accounted for as a deferred federal income tax benefit.

     In periods when Liberty Media Group generates federal taxable income, AT&T
     has agreed to satisfy such tax liability on Liberty Media Group's behalf up
     to a certain amount. The reduction of such computed tax liabilities will be
     accounted for by Liberty Media Group as an addition to combined equity. The
     total amount of future federal tax liabilities of Liberty Media Group which
     AT&T will satisfy under the AT&T Tax Sharing Agreement is approximately
     $512 million, which represents the tax effect of the net operating loss
     carryforward reflected in TCI's final federal income tax return, subject to
     IRS adjustments. Thereafter, Liberty Media Group is required to make cash
     payments to AT&T for federal tax liabilities of Liberty Media Group.

     To the extent AT&T utilizes existing net operating losses of Liberty Media
     Group, such amounts will be accounted for by Liberty Media Group as a
     reduction of combined equity. During the ten month period ending December
     31, 1999, AT&T utilized net operating losses of Liberty Media Group with a
     tax effected carrying value of $88 million.

     Liberty Media Group will generally make cash payments to AT&T related to
     states where it generates taxable income and receive cash payments from
     AT&T in states where it generates taxable losses.

     Prior to the AT&T Merger, Liberty Media Group was included in TCI's
     consolidated tax return and was a party to the TCI tax sharing agreements.

     Liberty Media Group's obligation under the 1995 TCI Tax Sharing Agreement
     of approximately $139 million (subject to adjustment), which is included in
     "due to related parties," shall be paid at the time, if ever, that Liberty
     Media Group deconsolidates from the AT&T income tax return. Liberty Media
     Group's receivable under the 1997 TCI Tax Sharing Agreement of
     approximately $220 million was forgiven in the AT&T Tax Sharing Agreement
     and recorded as an adjustment to combined equity by Liberty Media Group in
     connection with the AT&T Merger.

                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)


         Income tax benefit (expense) consists of:

<TABLE>
<CAPTION>
                                                                                  Current          Deferred            Total
                                                                                  -------          --------            -----
                                                                                              amounts in millions
<S>                                                                            <C>               <C>                  <C>
         Ten months ended December 31, 1999:
             State and local income tax (expense) benefit, including
                intercompany tax allocation                                      $    (3)              152               149
             Federal income tax benefit, including intercompany tax
                allocation                                                            75               873               948
                                                                                 -------           -------           -------
                                                                                 $    72             1,025             1,097
                                                                                 =======           =======           =======

         Two months ended February 28, 1999:
             State and local income tax expense, including intercompany
                tax allocation                                                   $    (1)              (36)              (37)
             Federal income tax expense, including intercompany tax
                allocation                                                            (3)             (169)             (172)
                                                                                 -------           -------           -------
                                                                                 $    (4)             (205)             (209)
                                                                                 =======           =======           =======
         Year ended December 31, 1998:
             State and local income tax expense, including intercompany
                tax allocation                                                   $    (2)             (200)             (202)
             Federal income tax expense, including intercompany tax
                allocation                                                            (1)           (1,190)           (1,191)
             Foreign income tax expense                                               (1)               (3)               (4)
                                                                                 -------           -------           -------
                                                                                 $    (4)           (1,393)           (1,397)
                                                                                 =======           =======           =======
         Year ended December 31, 1997:
             State and local income tax expense, including intercompany
                tax allocation                                                   $    (3)              (32)              (35)
             Federal income tax benefit, including intercompany tax
                allocation                                                           158                12               170
             Foreign income tax (expense) benefit                                     (9)                4                (5)
                                                                                 -------           -------           -------
                                                                                 $   146               (16)              130
                                                                                 =======           =======           =======
</TABLE>


                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)


     Income tax benefit (expense) differs from the amounts computed by applying
     the U.S. federal income tax rate of 35% as a result of the following:

<TABLE>
<CAPTION>
                                                           New Liberty                                Old Liberty
                                                         ---------------        ----------------------------------------------------
                                                          Ten months            Two months
                                                             ended                 ended                      Years ended
                                                           December 31,          February 28,                 December 31,
                                                         ---------------        --------------               --------------
                                                              1999                  1999                1998                1997
                                                         -------------          -------------      -------------       -------------
                                                                                        amounts in millions
<S>                                                      <C>                    <C>                    <C>                 <C>
Computed expected tax benefit
    (expense)                                                $ 1,092                  (53)              (1,244)                 189
Dividends excluded for income tax
    purposes                                                      11                    6                   16                    8
Minority interest in equity of
    attributed subsidiaries                                       16                    3                   33                    3
Amortization not deductible for
    income tax purposes                                         (122)                  (4)                 (21)                 (10)
State and local income taxes, net of
    federal income taxes                                         102                  (29)                (132)                 (23)
Recognition of difference in income
    tax basis of investments in
    attributed subsidiaries                                       --                 (133)                  (1)                 (10)
Increase in valuation allowance                                   --                   --                  (44)                 (26)
Gain on sale of attributed
    subsidiaries' stock                                           --                   --                   18                   21
Effect of deconsolidations on
    deferred tax expense                                          --                   --                   --                  (11)
Other, net                                                        (2)                   1                  (22)                 (11)
                                                            --------             --------             --------             --------
                                                             $ 1,097                 (209)              (1,397)                 130
                                                            ========             ========             ========             ========
</TABLE>


                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)


     The tax effects of temporary differences that give rise to significant
     portions of the deferred tax assets and deferred tax liabilities at
     December 31, 1999 and 1998 are presented below:

<TABLE>
<CAPTION>
                                                                              New Liberty       Old Liberty
                                                                              -----------       -----------
                                                                                        December 31,
                                                                              -----------------------------
                                                                                  1999               1998
                                                                                --------           --------
                                                                                  amounts in millions
<S>                                                                           <C>               <C>
Deferred tax assets:
    Net operating and capital loss carryforwards                                 $    43              188
    Future deductible amount attributable to accrued stock
       compensation and deferred compensation                                        749              215
    Recognized gain on sale of assets                                                 --              147
    Other future deductible amounts due principally to
       non-deductible accruals                                                        37               16
                                                                                --------         --------
    Deferred tax assets                                                              829              566
       Less valuation allowance                                                       50              139
                                                                                --------         --------
    Net deferred tax assets                                                          779              427
                                                                                --------         --------

Deferred tax liabilities:
    Investments in affiliates, due principally to the application of
       purchase accounting and losses of affiliates recognized for
       income tax purposes in excess of losses recognized for financial
       statement purposes                                                         13,915            4,825
    Intangibles, principally due to differences in
       amortization                                                                  200               --
    Other, net                                                                        21               60
                                                                                --------         --------
    Deferred tax liabilities                                                      14,136            4,885
                                                                                --------         --------

Net deferred tax liabilities                                                     $13,357            4,458
                                                                                ========         ========
</TABLE>


     At December 31, 1999, Liberty Media Group had net operating and capital
     loss carryforwards for income tax purposes aggregating approximately $94
     million which, if not utilized to reduce taxable income in future periods,
     will expire as follows: 2004: $18 million; 2005: $14 million; 2006: $14
     million; 2007: $13 million; 2008: $12 million; and $23 million between 2009
     and 2010. These net operating losses are subject to certain rules limiting
     their usage.

(13) Combined Equity

     Stock Repurchase and Issuances

     In conjunction with a stock repurchase program or similar transaction, the
     issuer may elect to sell put options on its own common stock. Proceeds from
     any sales of puts with respect to TCI's then outstanding TCI Ventures Group
     tracking stock and TCI's then outstanding Liberty Media Group tracking
     stock have been reflected as an increase to combined equity, and an amount
     equal to the maximum redemption amount under unexpired put options with
     respect to such tracking stocks was reflected as an "obligation to redeem
     common stock" in the accompanying combined balance sheets. At December 31,
     1999 no amounts were outstanding under such arrangements.

                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)


     During the year ended December 31, 1998, pursuant to a stock repurchase
     program, Liberty Media Group repurchased 239,450 shares of TCI's then
     outstanding TCI Ventures Group tracking stock and 766,783 shares of TCI's
     then outstanding Liberty Media Group tracking stock at an aggregate cost of
     approximately $30 million.

     During the year ended December 31, 1997, pursuant to a stock repurchase
     program, Liberty Media Group repurchased 916,500 shares of TCI's then
     outstanding Liberty Media Group tracking stock and 338,196 shares of TCI's
     then outstanding TCI Ventures Group tracking stock in open market
     transactions and 219,937 shares of TCI's then outstanding Liberty Media
     Group tracking stock from the spouse of an officer and director of TCI at
     an aggregate cost of $22 million.

     Effective July 31, 1997, TCI merged Kearns-Tribune Corporation into a
     wholly-owned TCI subsidiary attributed to TCI Group. TCI exchanged 47.2
     million shares of TCI's then outstanding TCI Group Series A tracking stock
     for shares of Kearns-Tribune Corporation which held 17.9 million shares of
     TCI's then outstanding TCI Group tracking stock and 10.1 million shares of
     TCI's then outstanding Liberty Media Group tracking stock. Liberty Media
     Group purchased from TCI Group the 10.1 million shares of TCI's then
     outstanding Liberty Media Group tracking stock that were acquired in such
     transaction for $168 million.

     During the third quarter of 1997, Liberty Media Group commenced a tender
     offer (the "Liberty Tender Offer") to purchase up to an aggregate of 22.5
     million shares of TCI's then outstanding Liberty Media Group tracking stock
     at a price of $20 per share through October 3, 1997. During the fourth
     quarter of 1997, Liberty Media Group repurchased 21.7 million shares of
     TCI's then outstanding Liberty Media Group Series A tracking stock and
     82,074 shares of TCI's then outstanding Liberty Media Group Series B
     tracking stock at an aggregate cost of approximately $435 million pursuant
     to the Liberty Tender Offer. All of the above described purchases are
     reflected as a reduction of combined equity in the accompanying combined
     financial statements.

     Transactions with Officers and Directors

     Prior to the AT&T Merger, a limited liability company owned by Dr. John C.
     Malone (Liberty Media Corporation's Chairman) acquired, from certain
     attributed subsidiaries of Liberty Media Group, for $17 million, working
     cattle ranches located in Wyoming. No gain or loss was recognized on such
     acquisition. The purchase price was paid by such limited liability company
     in the form of a 12-month note in the amount of $17 million having an
     interest rate of 7%. Such note was repaid in March 2000.

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


                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)


     On February 9, 1998, in connection with the settlement of certain legal
     proceedings relative to the Estate of Bob Magness (the "Magness Estate"),
     the late founder and former Chairman of the Board of TCI, TCI entered into
     a call agreement with Dr. Malone and Dr. Malone's wife (together with Dr.
     Malone, the "Malones"), and a call agreement with the Estate of Bob
     Magness, the Estate of Betsy Magness, Gary Magness (individually and in
     certain representative capacities) and Kim Magness (individually and in
     certain representative capacities) (collectively, the "Magness Group").
     Under these call agreements, each of the Magness Group and the Malones
     granted to TCI the right to acquire all of the shares of TCI's common stock
     owned by them that entitle the holder to cast more than one vote per share
     (the "High-Voting Shares") upon Dr. Malone's death or upon a contemplated
     sale of the High-Voting Shares (other than a minimal amount) to third
     parties. In either such event, TCI had the right to acquire such shares at
     a price equal to the then market price of shares of TCI's common stock of
     the corresponding series that entitled the holder to cast no more than one
     vote per share (the "Low-Voting Stock"), plus a 10% premium, or in the case
     of a sale, the lesser of such price and the price offered by the third
     party. In addition, each call agreement provides that if TCI were ever to
     be sold to a third party, then the maximum premium that the Magness Group
     or the Malones would receive for their High-Voting Shares would be the
     price paid for shares of the relevant series of Low-Voting Stock by the
     third party, plus a 10% premium. Each call agreement also prohibits any
     member of the Magness Group or the Malones from disposing of their
     High-Voting Shares, except for certain exempt transfers (such as transfers
     to related parties or to the other group or public sales of up to an
     aggregate of 5% of their High-Voting Shares after conversion to the
     respective series of Low-Voting Stock) and except for a transfer made in
     compliance with TCI's purchase right described above. TCI paid $150 million
     to the Malones and $124 million to the Magness Group in consideration of
     their entering into the call agreements, of which an aggregate of $140
     million was allocated to and paid by Liberty Media Group.

     Transactions with AT&T (formerly transactions with TCI), and Other Related
     Parties

     Certain AT&T corporate general and administrative costs are charged to
     Liberty Media Group at rates set at the beginning of the year based on
     projected utilization for that year. Management believes this allocation
     method is reasonable. During the ten months ended December 31, 1999, the
     two months ended February 28, 1999 and the years ended December 31, 1998
     and 1997 Liberty Media Group was allocated less than $1 million, $2
     million, $13 million and $13 million, respectively, in corporate general
     and administrative costs by AT&T. These costs are included in charges from
     related parties in the accompanying combined statements of operations and
     comprehensive earnings.

     Subsidiaries of Liberty Media Group lease satellite transponder facilities
     from a subsidiary of AT&T. Charges for such arrangements and other related
     operating expenses for the ten months ended December 31, 1999 aggregated
     $20 million and are included in charges from related parties in the
     accompanying combined statements of operations and comprehensive earnings.


                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)


     During 1999, 1998 and 1997, Liberty Media Group made marketing support
     payments to AT&T. Charges by AT&T for such arrangements for the ten months
     ended December 31, 1999, the two months ended February 28, 1999 and the
     years ended December 31, 1998 and 1997 aggregated $4 million, less than $1
     million, $5 million and $19 million, respectively, and are included in
     charges from related parties in the accompanying combined statements of
     operations and comprehensive earnings.

     The Puerto Rico Subsidiary purchases programming services from AT&T. The
     charges, which approximate AT&T's cost and are based on the aggregate
     number of subscribers served by the Puerto Rico Subsidiary, aggregated $6
     million and $1 million during the ten months ended December 31, 1999, the
     two months ended February 28, 1999, respectively, and $6 million for each
     of the years ended December 31, 1998 and 1997, and are included in
     operating expenses in the accompanying combined statements of operations
     and comprehensive earnings.

     In connection with the AT&T Merger, warrants to buy 3 million shares of
     common stock of CSG Systems International, Inc. ("CSG") and related
     registration rights were transferred to Liberty Media Group. On April 13,
     1999, AT&T purchased these warrants from Liberty Media Group for an
     aggregate purchase price of $75 million along with the related registration
     rights. The vesting of the CSG warrants is contingent on AT&T meeting
     certain subscriber commitments to CSG. If any warrants do not vest, Liberty
     Media Group must repurchase the unvested warrants from AT&T, with interest
     at 6% from April 12, 1999. Accordingly, Liberty Media Group has recorded
     the unvested CSG warrants as deferred income until such time as the CSG
     warrants vest.

     During September 1998, TCI assigned its obligation under an option contract
     to Liberty Media Group. As a result of such assignment, Liberty Media Group
     recorded a $16 million reduction to the intercompany amount due to TCI and
     a corresponding increase to combined equity.

     Cablevision purchases programming services from certain Liberty Media Group
     affiliates. The related charges generally are based upon the number of
     Cablevision's subscribers that receive the respective services. During the
     year ended December 31, 1997, such charges aggregated $12 million.
     Additionally, certain of Cablevision's general and administrative functions
     are provided by Liberty Media Group. The related charges, which generally
     are based upon the respective affiliate's cost of providing such functions,
     aggregated $2 million during the year ended December 31, 1997. The
     above-described programming and general and administrative charges were
     included in operating costs in the accompanying combined statements of
     operations and comprehensive earnings.

     During July 1997, AT&T entered into a 25 year affiliation agreement with
     Starz Encore Group (the "EMG Affiliation Agreement") pursuant to which AT&T
     will pay monthly fixed amounts in exchange for unlimited access to all of
     the existing Encore and STARZ! services.

     Liberty Digital and AT&T entered into an Amended and Restated Contribution
     Agreement to be effective as of July 11, 1997 which provides, among other
     things, for AT&T to deliver, or cause certain of its subsidiaries to
     deliver to Liberty Digital fixed monthly payments (subject to inflation and
     other adjustments) through 2017.


                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)


     During the third quarter of 1997, Liberty Media Group sold certain assets
     (the "SUMMITrak Assets") to CSG for cash consideration of $106 million,
     plus five-year warrants to purchase up to 1.5 million shares of CSG common
     stock at $24 per share and $12 million in cash, once certain numbers of TCI
     affiliated customers are being processed on a CSG billing system. In
     connection with the sale of the SUMMITrak Assets, TCI committed to purchase
     billing services from CSG through 2012. In light of such commitment,
     Liberty Media Group has reflected the $30 million excess (after deducting
     deferred income taxes of $17 million) of the cash received over the book
     value of the SUMMITrak Assets as an increase to combined equity.

     During the fourth quarter of 1997, Liberty Media Group's remaining assets
     in TCI SUMMITrak of Texas, Inc. and TCI SUMMITrak L.L.C. were transferred
     to TCI in exchange for a $19 million reduction of the amount owed by
     Liberty Media Group to TCI. Such transfer was accounted for at historical
     cost due to the related party nature of the transaction.

     Due to Related Parties

     The components of "Due to related parties" are as follows:

<TABLE>
<CAPTION>
                                                                      New Liberty        Old Liberty
                                                                      -----------        -----------
                                                                              December 31,
                                                                      ------------------------------
                                                                         1999                 1998
                                                                      -----------        -----------
                                                                           amounts in millions
<S>                                                                 <C>                      <C>
         Notes payable to TCI, including accrued interest
                                                                          $  --                   141
         Intercompany account                                                27                   556
                                                                          -----                ------
                                                                          $  27                   697
                                                                          =====                ======
</TABLE>


     The non-interest bearing intercompany account includes certain stock
     compensation allocations (in Old Liberty) and income tax allocations that
     are to be settled at some future date. Stock compensation liabilities of
     New Liberty are classified as a separate component of current liabilities.
     All other amounts included in the intercompany account are to be settled
     within thirty days following notification.

     Amounts outstanding at December 31, 1998 under notes payable to TCI had
     varying rates of interest. During the second quarter of 1998, TCI made a
     contribution to Liberty Media Group of $5 million, which was used to reduce
     the amount due under the Music Note.


                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)


(14) Other Comprehensive Earnings

     Accumulated other comprehensive earnings included in Liberty Media Group's
     combined balance sheets and combined statements of equity reflect the
     aggregate of foreign currency translation adjustments and unrealized
     holding gains and losses on securities classified as available-for-sale.
     The change in the components of accumulated other comprehensive earnings,
     net of taxes, is summarized as follows:

<TABLE>
<CAPTION>
                                                                                                       Accumulated
                                                                 Foreign                                  other
                                                                currency         Unrealized           comprehensive
                                                               translation        gains  on           earnings, net
                                                               adjustments       securities             of taxes
                                                               -----------       ----------           -------------
                                                                              amounts in millions
<S>                                                          <C>              <C>                      <C>
         Balance at January 1, 1997                           $         25               16                    41
         Other comprehensive earnings (loss)                           (22)             749                   727
                                                              ------------    -------------            ----------
         Balance at December 31, 1997                                    3              765                   768
         Other comprehensive earnings                                    3            2,947                 2,950
                                                              ------------    -------------            ----------
         Balance at December 31, 1998                                    6            3,712                 3,718
         Other comprehensive earnings (loss)                           (15)             971                   956
                                                              ------------    -------------            ----------
         Balance at February 28, 1999                         $         (9)           4,683                 4,674
                                                              ============    =============            ==========


         Balance at March 1, 1999                             $         --               --                    --
         Other comprehensive earnings                                   60            6,497                 6,557
                                                              ------------    -------------            ----------
         Balance at December 31, 1999                         $         60            6,497                 6,557
                                                              ============    =============            ==========
</TABLE>




                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)


     The components of other comprehensive earnings are reflected in Liberty
     Media Group's combined statements of operations and comprehensive earnings,
     net of taxes and reclassification adjustments for gains realized in net
     earnings (loss). The following table summarizes the tax effects and
     reclassification adjustments related to each component of other
     comprehensive earnings.

<TABLE>
<CAPTION>
                                                                                              Tax
                                                                           Before-tax      (expense)      Net-of-tax
                                                                             amount         benefit         amount
                                                                           ----------      ---------      ----------
                                                                                       amounts in millions
<S>                                                                       <C>                 <C>         <C>
         Ten months ended December 31, 1999:
         Foreign currency translation adjustments                         $          99           (39)              60
                                                                          -------------       --------    ------------

         Unrealized gains on securities:
              Unrealized holding gains arising during period
                                                                                 10,736        (4,246)           6,490
              Less: reclassification adjustment for losses realized in
                  net loss                                                           12            (5)               7
                                                                          -------------       --------    ------------
              Net unrealized gains                                               10,748        (4,251)           6,497
                                                                          -------------       --------    ------------
         Other comprehensive earnings                                     $      10,847        (4,290)           6,557
                                                                          =============       ========    ============

         Two months ended February 28, 1999:
         Foreign currency translation adjustments                         $         (25)           10              (15)
         Unrealized gains on securities:
              Unrealized holding gains arising during period
                                                                                  1,606          (635)             971
                                                                          -------------       --------    ------------
         Other comprehensive earnings                                     $       1,581          (625)             956
                                                                          =============       ========    ============
         Year ended December 31, 1998:
         Foreign currency translation adjustments                         $           5            (2)               3
         Unrealized gains on securities:
              Unrealized holding gains arising during period
                                                                                  4,875        (1,928)           2,947
                                                                          -------------       --------    ------------
         Other comprehensive earnings                                     $       4,880        (1,930)           2,950
                                                                          =============       ========    ============

         Year ended December 31, 1997:
         Foreign currency translation adjustments                         $         (36)           14              (22)
         Unrealized gains on securities:
              Unrealized holding gains arising during period
                                                                                  1,239          (490)             749
                                                                          -------------       --------    ------------
         Other comprehensive earnings                                     $       1,203          (476)             727
                                                                          =============       ========    ============
</TABLE>



                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)


(15) Commitments and Contingencies

     Starz Encore Group provides premium programming distributed by cable,
     direct satellite, TVRO and other distributors throughout the United States.
     Starz Encore Group is obligated to pay fees for the rights to exhibit
     certain films that are released by various producers through 2017 (the
     "Film Licensing Obligations"). Based on customer levels at December 31,
     1999, these agreements require minimum payments aggregating approximately
     $900 million. The aggregate amount of the Film Licensing Obligations under
     these license agreements is not currently estimable because such amount is
     dependent upon the number of qualifying films released theatrically by
     certain motion picture studios as well as the domestic theatrical
     exhibition receipts upon the release of such qualifying films.
     Nevertheless, required aggregate payments under the Film Licensing
     Obligations could prove to be significant.

     Flextech has undertaken to finance the working capital requirements of a
     joint venture (the "Principal Joint Venture") formed with BBC Worldwide,
     and is obligated to provide the Principal Joint Venture with a primary
     credit facility of (pound sterling)88 million and, subject to certain
     restrictions, a standby credit facility of (pound sterling)30 million. As
     of December 31, 1999, the Principal Joint Venture had borrowed (pound
     sterling)53 million under the primary credit facility. If Flextech defaults
     in its funding obligation to the Principal Joint Venture and fails to cure
     within 42 days after receipt of notice from BBC Worldwide, BBC Worldwide is
     entitled, within the following 90 days, to require that Liberty Media Group
     assume all of Flextech's funding obligations to the Principal Joint
     Venture.

     Liberty Media Group has guaranteed various loans, notes payable, letters of
     credit and other obligations (the "Guaranteed Obligations") of certain
     affiliates. At December 31, 1999, the Guaranteed Obligations aggregated
     approximately $655 million. Currently, Liberty Media Group is not certain
     of the likelihood of being required to perform under such guarantees.

     Liberty Media Group leases business offices, has entered into pole rental
     and transponder lease agreements and uses certain equipment under lease
     arrangements. Rental expense under such arrangements amounts to $30
     million, $18 million, $98 million and $84 million for the ten months ended
     December 31, 1999, the two months ended February 28, 1999 and the years
     ended December 31, 1998 and 1997, respectively.

     A summary of future minimum lease payments under noncancelable operating
     leases as of December 31, 1999 follows (amounts in millions):

<TABLE>
<CAPTION>
                  Years ending December 31:
<S>                                                       <C>
                        2000                              $      21
                        2001                                     18
                        2002                                     16
                        2003                                     16
                        2004                                     13
                        Thereafter                               21
</TABLE>

                                                                     (continued)

<PAGE>

                              "LIBERTY MEDIA GROUP"
         (a combination of certain assets, as defined in notes 1 and 2)


     It is expected that in the normal course of business, leases that expire
     generally will be renewed or replaced by leases on other properties; thus,
     it is anticipated that future minimum lease commitments will not be less
     than the amount shown for 2000.

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