<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

[X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 [Fee Required]

For the quarterly period ended SEPTEMBER 30, 2000

                                       OR

[ ]  Transition Report Pursuant to Section 13 Or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required]

For the transition period from                to

Commission file number: 0-1461

                          LIBERTY LIVEWIRE CORPORATION
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

         DELAWARE                                      13-1679856
------------------------------          ----------------------------------------
(State or other jurisdiction              (I.R.S. Employer Identification No.)
of incorporation)

        520 BROADWAY, SANTA MONICA, CA                     90401
  ------------------------------------------             ----------
    (Address of principal executive offices)             (Zip Code)

Registrant's telephone number, including area code: (310) 434-7000

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

The number of shares of common stock outstanding at October 31, 2000 was
5,302,449 Class A shares and 31,692,113 Class B shares.



<PAGE>


LIBERTY LIVEWIRE CORPORATION


Quarterly Report on Form 10-Q

September 30, 2000

Index
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>

PART I - FINANCIAL INFORMATION                                                              Page

  <S>                                                                                       <C>
  Item 1- Financial Statements (Unaudited)

     The following financial statements are filed herewith:

          Condensed Consolidated Balance Sheets, September 30, 2000
          and December 31, 1999                                                                3

          Condensed Consolidated Statements of Income and Retained Earnings for the
          Three Months Ended September 30, 2000 and August 31, 1999 and for the
          Five Months Ended May 31, 2000, the Four Months Ended September 30, 2000
          and the Nine Months Ended August 31, 1999                                            5

          Condensed Consolidated Statements of Cash Flows for the Five Months Ended
          May 31, 2000, the Four Months Ended September 30, 2000 and the Nine Months
          Ended August 31, 1999                                                                6

          Notes to Condensed Consolidated Financial Statements                                10


  Item 2 - Management's Discussion and Analysis of
           Financial Condition and Results of Operations                                      17

PART II - OTHER INFORMATION

  Item 1 - Legal Proceedings                                                                  22

  Item 6 - Exhibits and Reports on Form 8-K                                                   22

  Signature                                                                                   22

</TABLE>



                                       2


<PAGE>


                          LIBERTY LIVEWIRE CORPORATION

                CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                             (DOLLARS IN THOUSANDS)

                                     ASSETS

<TABLE>
<CAPTION>

                                                                                     LIVEWIRE    |       TODD-AO
                                                                                 --------------- |    -------------
                                                                                  SEPTEMBER 30,  |     DECEMBER 31,
                                                                                 --------------- |    -------------
                                                                                      2000       |        1999
                                                                                 --------------- |    -------------
                                                                                                 |
<S>                                                                              <C>                  <C>
Current assets:
Cash and cash equivalents..............................................               $   27,590 |       $   10,300
Marketable securities..................................................                      759 |              416
Trade receivables                                                                                |
   (net of allowance for doubtful accounts of $741 at                                            |
   September 30, 2000 and $1,388 at December 31, 1999) ................                   83,806 |           23,896
Income tax receivable..................................................                      262 |              675
Inventories (first-in first-out basis).................................                    4,410 |              786
Deferred income taxes..................................................                       -- |              573
Prepaid deposits and other.............................................                   11,017 |            2,925
                                                                                 --------------- |    -------------
Total current assets...................................................                  127,844 |           39,571
                                                                                 --------------- |    -------------
                                                                                                 |
Non current assets:                                                                              |
Property, plant and equipment - at cost:                                                 295,988 |          132,583
Accumulated depreciation and amortization..............................                  (21,190)|          (52,575)
                                                                                 --------------- |    -------------
Property, plant and equipment - net....................................                  274,798 |           80,008
                                                                                 --------------- |    -------------
Investments............................................................                   13,610 |            3,718
                                                                                                 |
Deferred income taxes..................................................                   29,238 |               --
                                                                                                 |
Long-term receivable...................................................                    2,662 |               --
                                                                                                 |
Due from parent - net..................................................                   11,262 |               --
Goodwill                                                                                         |
   (net of accumulated amortization of $10,651 at                                                |
   September 30, 2000 and $3,354 at December 31, 1999).................                  524,245 |           33,396
                                                                                                 |
Other assets (net of accumulated amortization of $753 at September 30,                           |
   2000)...............................................................                    9,319 |            2,958
                                                                                 --------------- |    -------------
Total..................................................................               $  992,978 |        $  159,651
                                                                                 =============== |    =============
                                                                                                 |
</TABLE>

                                        3




<PAGE>


                          LIBERTY LIVEWIRE CORPORATION

          CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (CONTINUED)
                             (DOLLARS IN THOUSANDS)

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                                                  LIVEWIRE      |        TODD-AO,
                                                                              ---------------   |    ---------------
                                                                               SEPTEMBER 30,    |      DECEMBER 31,
                                                                              ---------------   |    ---------------
                                                                                   2000         |         1999
                                                                              ---------------   |    ---------------
                                                                                                |
  <S>                                                                         <C>                    <C>
  Current liabilities:                                                                          |
  Accounts payable......................................................      $         32,561  |    $          5,039
  Accrued liabilities:                                                                          |
     Payroll and related taxes..........................................                12,524  |               2,649
     Interest...........................................................                 1,784  |               1,177
     SARs compensation payable..........................................                19,522  |                  --
     Other..............................................................                24,360  |               9,249
  Current maturities of long-term debt and capital lease obligations....                 9,604  |               1,181
  Deferred income taxes.................................................                 9,188  |                  --
                                                                              ----------------  |    ----------------
  Total current liabilities.............................................               109,543  |              19,295
                                                                              ----------------  |    ----------------
                                                                                                |
  Long-term debt and capital lease obligations..........................               344,107  |              63,016
  Other liabilities.....................................................                 4,624  |               5,143
  Deferred income taxes.................................................                    --  |               3,337
                                                                              ----------------  |    ----------------
                                                                                                |
  Total liabilities.....................................................               458,274  |              90,791
                                                                              ----------------  |    ----------------
                                                                                                |
                                                                                                |
  Commitments and contingencies                                                                 |
                                                                                                |
  Stockholders' equity:                                                                         |
  Common stock:                                                                                 |
     Class A; authorized 300,000,000 shares of $0.01 par value;                                 |
     issued 5,264,828 at September 30, 2000 and 8,951,404 at                                    |
     December 31, 1999..................................................                    52  |                  91
     Class B; authorized 100,000,000 shares of $0.01 par value;                                 |
     issued and outstanding 31,635,682 at September 30, 2000 and                                |
     1,747,178 at December 31, 1999.....................................                   316  |                  17
  Additional paid-in capital............................................               556,735  |              47,089
  Unearned stock compensation...........................................                (2,541) |                  --
  Treasury stock (shares at cost: 2,400 at September 30, 2000 and 6,000                         |
     at December 31, 1999)..............................................                   (19) |                 (47)
  Retained earnings.....................................................                (8,778) |              21,881
  Deferred tax asset to be utilized by parent...........................                (7,721) |                  --
  Accumulated other comprehensive income (loss) ........................                (3,340) |                (171)
                                                                              ----------------  |    ----------------
  Total stockholders' equity............................................               534,704  |              68,860
                                                                              ----------------  |    ----------------
  Total.................................................................            $  992,978  |         $   159,651
                                                                              ================  |    ================
</TABLE>

            See notes to condensed consolidated financial statements


                                       4
<PAGE>


                          LIBERTY LIVEWIRE CORPORATION

  CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (UNAUDITED)

                (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>

                                                 LIVEWIRE               |                     TODD-AO
                                      --------------------------------  | ------------------------------------------------
                                       THREE MONTHS     FOUR MONTHS     |  THREE MONTHS     FIVE MONTHS      NINE MONTHS
                                          ENDED            ENDED        |     ENDED            ENDED            ENDED
                                      SEPTEMBER 30,    SEPTEMBER 30,    |   AUGUST 31,        MAY 31,         AUGUST 31,
                                      ---------------  ---------------  | ---------------  ---------------  --------------
                                           2000             2000        |      1999             2000             1999
                                      ---------------  ---------------  | ---------------  ---------------  --------------
                                                                        |
<S>                                   <C>              <C>                <C>              <C>              <C>
Revenues ..........................   $       100,441  $       127,307  | $        28,089  $        53,243  $        84,570
Costs and expenses:                                                     |
Operating costs and other expenses             90,348          114,324  |          24,464           45,332           72,624
SARs compensation expense                                               |
  (income) ........................           (18,439)         (11,089) |              --               --               --
Depreciation and amortization .....            19,571           25,433  |           3,094            6,244           9,426
Interest ..........................             7,243            9,543  |           1,125            2,032           2,751
Other expense (income) - net ......              (997)            (911) |           2,096            1,070           1,057
                                      ---------------  ---------------  | ---------------  ---------------  --------------
Total costs and expenses ..........            97,726          137,300  |          30,779           54,678          85,858
                                      ---------------  ---------------  | ---------------  ---------------  --------------
Income (loss) before provision for                                      |
  income taxes ....................             2,715           (9,993) |          (2,690)          (1,435)         (1,288)
Provision for income taxes ........             3,473           (1,215) |            (868)            (441)           (426)
                                      ---------------  ---------------  | ---------------  ---------------  --------------
Net (loss) ........................   $          (758) $        (8,778) | $        (1,822) $          (994) $         (862)
                                      ===============                   | ===============
Retained earnings beginning of                                          |
  period ..........................                                 --  |                           21,881          22,573
Less: Dividends paid ..............                                 --  |                               --            (279)
                                                       ---------------  |                  ---------------  --------------
Retained earnings end of                                                |
  period ..........................                    $        (8,778) |                  $        20,887  $       21,432
                                                       ===============  |                  ===============  ==============
Net (loss) per common share:                                            |
Net (loss) available to common                                          |
  stockholders ....................   $          (758) $        (8,778) | $        (1,822) $          (994) $         (862)
                                      ===============  ===============  | ===============  ===============  ==============
Weighted average shares                                                 |
  outstanding - basic and diluted .        35,074,709       31,991,406  |       9,812,631       10,768,773      10,647,760
                                      ---------------  ---------------  | ---------------  ---------------  --------------
Net (loss) per common share:                                            |
   Net (loss) - basic and diluted .   $         (0.02) $         (0.27) | $         (0.19) $         (0.09) $        (0.09)
                                      ===============  ===============  | ===============  ===============  ==============
</TABLE>

            See notes to condensed consolidated financial statements

                                       5
<PAGE>


                          LIBERTY LIVEWIRE CORPORATION

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                             (DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                       LIVEWIRE         |                     TODD-AO
                                                                 ---------------------- | ------------------------------------------
                                                                      FOUR MONTHS       |      FIVE MONTHS          NINE MONTHS
                                                                         ENDED          |         ENDED                ENDED
                                                                     SEPTEMBER 30,      |        MAY 31,             AUGUST 31,
                                                                 ---------------------- | ---------------------  ------------------
                                                                         2000           |          2000                1999
                                                                 ---------------------- | ---------------------  ------------------
<S>                                                              <C>                      <C>                    <C>
Cash Flows From Operating Activities:
   Net income (loss) ............................................     $          (8,778)|   $              (994)   $           (862)
      Adjustments to reconcile net income to net cash provided by                       |
      operating activities:                                                             |
      Depreciation and amortization .............................                25,433 |                 6,244               9,426
      Deferred income taxes .....................................                 7,569 |                   565              (3,571)
      Allowance for doubtful accounts ...........................                  (741)|                    --                  --
      Amortization of unearned stock compensation ...............                   317 |                    --                  --
      (Gain) loss on disposition of fixed assets & other ........                   169 |                    --                (312)
      Changes in assets and liabilities (net of                                         |
      acquisitions):                                                                    |
          Trade receivables, net ................................                (2,775)                  2,469               5,363
          Inventories and other current assets ..................                  (924)|                  (115)                476
          Accounts payable and accrued liabilities ..............                 4,024 |                (1,513)                760
          SARs compensation payable .............................               (11,088)|                    --                  --
          Accrued equipment lease ...............................                    -- |                   525               1,025
          Income taxes payable, net .............................                  (568)|                (1,033)              1,417
          Other liabilities .....................................                  (559)|                (1,695)             (2,607)
                                                                 ---------------------- | ---------------------  ------------------
Net cash flows provided by operating activities .................                12,079 |                 4,453              11,115
                                                                 ---------------------- | ---------------------  ------------------
Cash Flows from Investing Activities:                                                   |
   Purchase of marketable securities and investments ............                (2,017)|                 1,951                (319)
   Proceeds from sale of marketable securities and investments ..                    -- |                    --                 154
   Proceeds from disposition of fixed assets ....................                    43 |                    --                 325
   Acquisition of Sound One .....................................                    -- |                    --             (12,315)
   Net cash acquired in 4MC contribution ........................                14,066 |                    --                  --
   Acquisition of Triumph, net of cash acquired .................                (8,488)|                    --                  --
   Acquisition of Soho, net of cash acquired ....................               (26,969)|                    --                  --
   Capital expenditures .........................................               (23,233)|                (4,038)            (18,628)
   Other assets .................................................                 2,338 |                (1,669)              1,850
                                                                 ---------------------- | ---------------------  ------------------
Net cash flows (used in) investing activities ...................     $         (44,260)|   $            (3,756)   $        (28,933)
                                                                 ---------------------- | ---------------------  ------------------
</TABLE>


                                       6


<PAGE>


                          LIBERTY LIVEWIRE CORPORATION

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                             (DOLLARS IN THOUSANDS)
                                   (CONTINUED)

<TABLE>
<CAPTION>

                                                LIVEWIRE          |                        TODD-AO
                                        ------------------------- |  ----------------------------------------------------
                                              FOUR MONTHS         |        FIVE MONTHS                NINE MONTHS
                                                 ENDED            |           ENDED                      ENDED
                                             SEPTEMBER 30,        |          MAY 31,                   AUGUST 31,
                                        ------------------------- |  -------------------------  -------------------------
                                                  2000            |            2000                       1999
                                        ------------------------- |  -------------------------  -------------------------
<S>                                     <C>                         <C>                        <C>
Cash Flows from Financing Activities:                             |
  Borrowings of long-term debt.........          $         65,144 |          $             400            $        33,777
  Payments of long-term debt...........                    (6,373)|                     (2,669)                   (21,290)
  Payments for SARs exercised..........                      (215)|                         --                         --
  Borrowings from parent company, net..                   (11,262)|                         --                         --
  Proceeds from sale/leaseback                                    |
     transaction.......................                        -- |                         --                      8,809
  Proceeds from exercise of stock                                 |
     options...........................                     3,425 |                        776                      1,099
  Treasury stock transactions..........                        -- |                         --                       (265)
  Dividends paid.......................                        -- |                         --                       (279)
                                        ------------------------- |  -------------------------  -------------------------
Net cash flows provided by (used in)                              |
  financing activities.................                    50,719 |                     (1,493)                    21,851
Effect of exchange rate changes on                                |
  cash ................................                      (385)|                        (67)                       (59)
                                        ------------------------- |  -------------------------  -------------------------
Net increase (decrease) in cash and                               |
  cash equivalents.....................                    18,153 |                       (863)                     3,974
 Cash and cash equivalents at                                     |
  beginning of period..................                     9,437 |                     10,300                      5,765
                                        ------------------------- |  -------------------------  -------------------------
Cash and cash equivalents at end of                               |
  period...............................          $         27,590 |          $           9,437            $         9,739
                                        ========================= |  =========================  =========================
Supplemental Disclosures of Cash Flow                             |
  Information:                                                    |
Cash paid during the period for:                                  |
                                                                  |
  Interest.............................          $          8,245 |          $           2,689            $         2,480
                                        ========================= |  =========================  =========================
                                                                  |
  Income taxes.........................          $          1,832 |          $               0            $           753
                                        ========================= |  =========================  =========================
</TABLE>



            See notes to condensed consolidated financial statements.


                                       7

<PAGE>


                          LIBERTY LIVEWIRE CORPORATION

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                             (DOLLARS IN THOUSANDS)
                                   (CONTINUED)

SUPPLEMENTAL DISCLOSURES OF NON CASH INVESTING AND FINANCING ACTIVITIES:
LIVEWIRE
--------
2000:

In June 2000 the Company acquired all of the outstanding shares of Four Media
Company from Liberty Media. In connection with the acquisition the Company
issued 16,614,952 shares of Class B Common Stock to Liberty Media.

<TABLE>

          <S>                                                                                        <C>
          Assets acquired:
                Cash...........................................................................      $       14,066
                Property, plant and equipment-net..............................................             166,956
                Trade and other receivables - net..............................................              51,184
                Deferred income taxes..........................................................              40,533
                Inventory......................................................................               1,821
                Prepaid deposits and other.....................................................               6,340
                Other assets...................................................................               9,902
                Goodwill - net.................................................................             292,288
          Liabilities assumed:
                Accounts payable and accrued liabilities - net.................................             (70,964)
                Long-Term debt and capital lease obligations...................................            (221,272)
          Deferred income taxes................................................................              (2,737)
          Foreign currency exchange rate accumulated loss......................................               2,614
          Common stock issued to Liberty Media.................................................            (279,662)
                                                                                                  -----------------
          Cash paid in acquisition.............................................................      $            0
                                                                                                  =================

</TABLE>


In July 2000, the Company acquired the post-production content and sound
editorial assets and certain of the liabilities of SounDelux Entertainment Group
of Delaware, Inc. from Liberty Media. In connection with this acquisition the
Company issued 8,181,818 shares of Class B Common Stock to Liberty Media.

<TABLE>

          <S>                                                                                        <C>
          Assets acquired:
                Property, plant and equipment..................................................      $        6,872
                Trade and other receivables - net..............................................               4,154
                Inventory......................................................................               1,588
                Goodwill.......................................................................              79,763
                Other assets...................................................................                 298
          Liabilities assumed:
                Accounts payable and accrued expenses..........................................              (2,675)
          Common stock issued to Liberty Media.................................................             (90,000)
                                                                                                  -----------------
          Cash paid in acquisition.............................................................      $            0
                                                                                                  =================

</TABLE>

In July 2000 the Company acquired substantially all of the outstanding shares of
Triumph Communications Group. In connection with the acquisition the Company
paid cash and issued 705,554 shares of Class A Common Stock.

<TABLE>

          <S>                                                                                        <C>
          Assets acquired:
                Cash...........................................................................      $        1,696
                Property, plant and equipment - net............................................               2,539
                Trade and other receivables - net..............................................                 218
                Inventory......................................................................                 230
                Prepaid deposits and other.....................................................                 439
                Deferred income taxes..........................................................                  40
                Goodwill.......................................................................              56,374
          Liabilities assumed:
                Accounts payable and accrued liabilities - net.................................              (6,450)
                Long-term debt and capital lease obligations...................................                (332)
          Common stock issued to Triumph.......................................................             (44,570)
          Cash advanced to Triumph.............................................................              (4,500)
                                                                                                  -----------------
          Cash paid in acquisition.............................................................      $        5,684
                                                                                                  =================
</TABLE>


                                       8
<PAGE>

                          LIBERTY LIVEWIRE CORPORATION

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)
                                   (CONTINUED)

In August 2000 the Company acquired substantially all of the outstanding shares
of Soho Group Limited. In connection with the acquisition the Company paid cash
as follows:

<TABLE>

          <S>                                                                                        <C>
          Assets acquired:
                Cash...........................................................................      $          247
                Property, plant and equipment - net............................................              16,316
                Trade and other receivables - net..............................................               4,470
                Prepaid deposits and other.....................................................                 223
                Goodwill.......................................................................               9,385
          Liabilities assumed:
                Accounts payable and accrued expenses..........................................              (2,577)
                Long-term debt and capital lease obligations...................................                (848)
                                                                                                  -----------------
          Cash paid in acquisition.............................................................      $       26,969
                                                                                                  =================

</TABLE>

On June 9, 2000 approximately 60% of the Company's outstanding common stock was
acquired by Liberty Media Corporation. In connection with this acquisition the
Company made the following purchase accounting adjustments:

<TABLE>

                <S>                                                                                  <C>
                Property, plant and equipment - net............................................      $            2
                Goodwill.......................................................................              63,466
                Other assets- net..............................................................                 443
                Accounts payable and accrued expenses..........................................              (1,761)
                Deferred income tax payable....................................................               2,683
                Additional paid in capital.....................................................             (91,473)
                Unearned compensation..........................................................               2,858
                Treasury stock.................................................................                 (28)
                Unearned gain /loss on marketable securities...................................               3,822
                Foreign exchange rate adjustment...............................................                (899)
                Retained earnings..............................................................              20,887
                                                                                                  -----------------
                Net............................................................................      $            0
                                                                                                  =================

</TABLE>


TODD-AO
1999:

In June 1999 the Company acquired substantially all of the outstanding shares of
Sound One Corporation. In connection with the acquisition the Company paid cash
as follows:

<TABLE>

          <S>                                                                                        <C>
          Assets acquired:
                Property, plant and equipment -net.............................................      $        4,069
                Trade and other receivables - net..............................................               1,304
                Inventory......................................................................                 108
                Deferred income taxes..........................................................               1,000
                Other assets...................................................................               1,811
                Goodwill.......................................................................               7,137
          Liabilities assumed:
                Accounts payable and accrued liabilities - net.................................                 270
                Long-term debt and capital lease obligations...................................                (833)
                Deferred income taxes..........................................................                (569)
          Common stock issued as compensation..................................................              (1,182)
          Non-compete agreements payable to sellers............................................                (800)
                                                                                                  -----------------
          Cash paid in acquisition.............................................................      $       12,315
                                                                                                  =================


</TABLE>


                                       9
<PAGE>


LIBERTY LIVEWIRE CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.   CHANGE IN CONTROL AND BASIS OF PRESENTATION

     CHANGE IN CONTROL

     On June 9, 2000 The Todd-AO Corporation ("Todd-AO") stockholders approved
     the acquisition by Liberty Media Corporation ("Liberty Media") of a
     controlling interest in Todd-AO and related merger proposals (collectively,
     the "Todd Merger"), voted in favor of certain post-merger business
     combinations as set forth in an Agreement between Todd-AO and Liberty
     Media, dated as of February 11, 2000, and approved the change of Todd-AO's
     name to Liberty Livewire Corporation ("Livewire" or the "Company"). In the
     Todd Merger, each issued and outstanding share of Todd-AO Common Stock was
     converted into the right to receive 0.4 of a share of Class A Livewire
     Common Stock and 0.5 of a share of AT&T Corp. ("AT&T") Class A Liberty
     Media Group tracking stock. Liberty Media's aggregate ownership interest in
     the Company as of September 30, 2000 consists of Class B Common Stock of
     Livewire representing approximately 85.7% of the Company's outstanding
     equity, which consists of Livewire's Class A and Class B Common Stock. All
     of Livewire's outstanding Class B Common Stock is currently held by Liberty
     Media. This ownership gives Liberty Media 98.4% voting control of the
     Company.

     The consideration paid by Liberty Media in the Todd Merger, consisting of
     5,501,256 shares of Liberty Media Group Class A (LMGA) stock valued at
     $101.5 million and conversion of vested options valued at $7.5 million, was
     allocated based on the preliminary fair values of the assets and
     liabilities acquired with the excess consideration of $63.5 million
     recorded as goodwill.

     Liberty Media is an indirect wholly owned subsidiary of AT&T. It's former
     parent, Tele-Communications, Inc ("TCI"), was acquired by AT&T by merger in
     March 1999. Liberty Media and its subsidiaries constitute substantially all
     of the businesses and assets of Liberty Media Group. Liberty Media Group
     Class A ("LMGA") and Class B ("LMGB") Common Stock are tracking stocks of
     AT&T that are intended to reflect the economic performance of the Liberty
     Media Group.

     BASIS OF PRESENTATION.

     Due to the level of ownership of the Company obtained by Liberty Media as a
     result of the merger as discussed above and the contribution of Four Media
     Company ("4MC") as discussed in note 2, Liberty Media has applied "push
     down" accounting and transferred to the Company the preliminary fair value
     adjustments relating to the assets of Todd-AO at June 9, 2000. The assets
     and liabilities of 4MC have been recorded at Liberty Media's historical
     value including preliminary fair value adjustments resulting from the
     acquisition of 4MC by Liberty Media.

     On August 10, 2000, the Board of Directors of Livewire approved the change
     of the Company's fiscal year end from August 31 to December 31. A
     transition report on Form 10-Q covering the transition period from
     September 1, 1999 through December 31, 1999 was filed with the Securities
     and Exchange Commission on September 22, 2000.


     The condensed consolidated financial statements include the Company and its
     wholly owned subsidiaries. All significant intercompany accounts and
     transactions have been eliminated in consolidation.

     Basic earnings per share ("EPS") excludes dilution and is computed by
     dividing income available to common shareholders by the weighted average
     number of common shares outstanding for the period. Diluted EPS reflects
     the potential dilution that could occur if securities or other contracts to
     issue common stock were exercised or converted into common stock. When
     dilutive, stock options are included as share equivalents in computing
     diluted earnings per share using the treasury stock method.

     The accompanying condensed consolidated balance sheets at September 30,
     2000 and December 31, 1999, condensed consolidated statements of income and
     retained earnings, and condensed statements of cash flows for the periods
     presented are unaudited. The condensed consolidated financial statements
     for the three and nine months ended August 31,1999 and the five months
     ended May 31, 2000, represent the consolidated financial condition and
     results of operations of Todd-AO before the acquisition by Liberty Media.
     The consolidated financial statements for the three and four months ended
     September 30, 2000 represent the consolidated financial condition and
     results of operations of the Company after giving effect to the Liberty
     Media merger. For financial statement purposes, the acquisition by Liberty
     Media is deemed to have occurred on June 1, 2000. In the opinion of
     management for the Company, all adjustments (which comprise only normal
     recurring accruals) necessary for


                                       10
<PAGE>

     a fair presentation of the results of operations have been included.

     Certain reclassifications have been made to the prior periods' condensed
     consolidated financial statements to conform with the current period's
     presentation.

2.   ACQUISITIONS

     In June 1999 all of the issued and outstanding shares of Sound One
     Corporation ("Sound One"), a New York corporation, were acquired by the
     Company through a Merger Agreement signed June 8, 1999. Todd-AO East, Inc.,
     an indirect wholly owned subsidiary of the Company, was merged into Sound
     One extinguishing all of the issued and outstanding shares of common stock
     of Sound One in exchange for a cash consideration of $11.50 per share. In
     consideration for this purchase, the Company paid $12.0 million in cash for
     the common stock and an additional $353,000 in cash for costs incurred in
     connection with the acquisition. In addition, $800,000 is represented by
     non-compete agreements. Sound One is the leading post production sound
     facility in New York City servicing the entertainment industry.

     On April 7, 2000, Liberty Media acquired 4MC for $123.3 million in cash
     plus 3,182,300 shares of LMGA stock valued at $137.7 million, converted
     4MC vested options into stock appreciation rights valued at $52.9 million,
     and issued a warrant valued at $7.8 million. The total consideration was
     allocated based on the preliminary fair values of the assets and
     liabilities acquired with the excess consideration of $276.8 million
     recorded as goodwill. On May 31, 2000, 4MC acquired six entities from the
     Virgin Media Group Limited ("Virgin") for $39.5 million in cash. The
     consideration was allocated based on the preliminary fair values of the
     assets and liabilities acquired with the excess consideration of $21.1
     million recorded as goodwill.

     On June 9, 2000 Liberty Media contributed all of the issued and outstanding
     shares of 4MC to the Company in exchange for 16,614,952 shares of the
     Livewire's Class B Common Stock, valued at $279.7 million pursuant to a
     Contribution Agreement dated February 11, 2000 between Liberty Media and
     the Company. 4MC provides technical and creative services to producers and
     distributors of television programming, television commercials, feature
     films and other entertainment content, as well as to owners of film and
     television libraries. 4MC's California facilities are located in Los
     Angeles, Culver City, Burbank and Santa Monica. It has international
     facilities in Mexico City, London and Singapore.

     In July 2000 a wholly owned subsidiary of Liberty Media ("Liberty Sub"),
     acquired the post-production content and sound editorial businesses of
     SounDelux Entertainment Group of Delaware, Inc. ("SounDelux") for $90.0
     million in cash. Immediately following the closing of this asset purchase,
     Liberty Media contributed 100% of its ownership interests in Liberty Sub to
     the Company in exchange for 8,181,818 shares of Livewire's Class B Common
     Stock pursuant to a previously negotiated contribution agreement between
     Liberty Media and Livewire. The contribution was allocated based on the
     preliminary fair values of the assets and liabilities acquired with the
     excess consideration of $79.8 million recorded as goodwill. SounDelux
     provides services to the motion picture sound design and sound editing
     industry and contributes to Livewire an audio post-production business
     encompassing a broad range of sound and music services for feature films,
     television, cable, advertising and new media. Services provided include
     sound supervision, design and editorial, music supervision, editorial and
     temporary scores and mixing, re-recording, scoring, ADR and Foley.
     SounDelux's content, technology development and distribution segment
     commercializes and markets its proprietary entertainment content and
     technologies which include audio books, sound effects and SounDelux
     Microphones. SounDelux is located in Los Angeles and San Francisco,
     California.

     In July 2000 the Company acquired Triumph Communications Group ("Triumph")
     for $5.7 million in cash and 705,554 shares of Livewire Class A common
     stock valued on the date of issuance at $44.6 million. The consideration
     was allocated based on the preliminary fair values of the assets and
     liabilities acquired with the excess consideration of $56.4 million
     recorded as goodwill. Triumph, located in New York City, designs, engineers
     and implements video transmission services for a range of clients including
     cable networks, broadcasters, news, sports, infomercials, and corporate
     organizations. Services provided include fiber optic, satellite,
     compression system, encoding and encryption, and IRD sales and
     authorization.

     In August 2000 a wholly owned subsidiary of Livewire, acquired all of the
     outstanding shares of Soho Group Limited ("Soho") for L17.2 million
     ($27.2 million), which includes real property in the Soho area of London.
     The consideration was allocated based on the preliminary fair values of the
     assets and liabilities acquired with excess consideration of $9.4 million
     recorded as goodwill. Soho is one of the oldest post-production companies
     in the U.K., providing services primarily to the commercial advertising
     industry. Services include commercial editing, film laboratory and negative
     cutting services using a proprietary computerized technology.


                                       11
<PAGE>

     The acquisitions are being accounted for under the purchase method of
     accounting. For all of the above acquisitions, with the exception of Sound
     One, the allocation of the purchase price has been recorded based on
     preliminary estimates. The Company is currently in the process of obtaining
     additional information, including appraisals in order to finalize the
     purchase price allocation. The following unaudited pro forma consolidated
     financial information for the nine months ended September 30, 2000 and
     August 31,1999 is presented as if the acquisition had occurred on January
     1, 1999. Pro forma adjustments are primarily for amortization of goodwill,
     depreciation adjustments, interest expense on borrowings in connection with
     the acquisitions, and income taxes. No pro forma adjustments have been
     included for the pre-acquisition time periods for potential fluctuations in
     the liability recorded for the stock appreciation rights granted in the 4MC
     acquisition, including effects for market fluctuations or estimates of
     exercises.

<TABLE>
<CAPTION>

(DOLLARS IN THOUSANDS)                                                       2000          1999
                                                                          ------------  -----------
<S>                                                                       <C>           <C>
Revenues..........................................................        $    338,469  $   337,727
                                                                          ============  ===========
Net income........................................................        $     18,924  $    16,393
                                                                          ============  ===========
Net income per common share - Basic...............................        $       0.59  $      0.47
                                                                          ============  ===========
Net income per common share - Diluted.............................        $       0.58  $      0.46
                                                                          ============  ===========

</TABLE>


3.   EQUITY

     On June 9, 2000, in connection with the Todd Merger, the Company amended
     and restated in its entirety its Certificate of Incorporation. Under the
     prior Certificate of Incorporation, the Company was authorized to issue
     37,000,000 shares of capital stock, consisting of 30,000,000 shares of
     Class A Common Stock ("Old Class A Stock"), 6,000,000 shares of Class B
     Common Stock ("Old Class B Stock") and 1,000,000 shares of preferred stock.
     Under the Restated Certificate of Incorporation, the total number of shares
     of capital stock authorized to be issued was increased to 405,000,000.
     400,000,000 of the authorized shares are designated common stock ("Common
     Stock") and 5,000,000 are designated preferred stock ("Preferred Stock").
     Of the total amount of authorized Common Stock, 300,000,000 shares have
     been designated as Class A Common Stock and 100,000,000 shares have been
     designated as Class B Common Stock. All the shares of Common Stock and
     Preferred Stock will have a par value of $.01 per share. Class A Common
     Stock shareholders are entitled to one vote per share and Class B Common
     Stock shareholders are entitled to ten votes per share. In all other
     respects, the Class A and B Common Stock are substantially identical and
     have equal rights and privileges.

     On June 9, 2000, pursuant to the Restated Certificate of Incorporation,
     each outstanding share of Old Class A Stock and Old Class B Stock was
     converted into or reconstituted as four-tenths (0.40) of a share of Class A
     Common Stock and six-tenths (0.60) of a share of Class B Common Stock.

4.   COMPREHENSIVE INCOME.

     In June 1997, the Financial Accounting Standards Board ("FASB") issued
     Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting
     Comprehensive Income." The Company adopted SFAS No. 130 beginning in
     September 1998. Comprehensive income is defined as all changes in
     shareholders' equity, except those resulting from investments by or
     distributions to shareholders.

     The Company's comprehensive income is as follows:

<TABLE>
<CAPTION>

       (DOLLARS IN THOUSANDS)
                                               LIVEWIRE               |                       TODD-AO
                                   ---------------------------------  |  --------------------------------------------------
                                    THREE MONTHS      FOUR MONTHS     |   THREE MONTHS     FIVE MONTHS       NINE MONTHS
                                       ENDED             ENDED        |      ENDED            ENDED             ENDED
                                   SEPTEMBER 30,     SEPTEMBER 30,    |    AUGUST 31,        MAY 31,         AUGUST 31,
                                   ---------------  ----------------  |  ---------------  ---------------  ----------------
                                        2000             2000         |       1999             2000             1999
                                   ---------------  ----------------  |  ---------------  ---------------  ----------------
                                                                      |
<S>                                <C>              <C>                 <C>              <C>              <C>
Net income (loss).................      $     (758)    $      (8,778) |    $      (1,822)    $       (994)     $       (862)
Unrealized gain (loss) on                                             |
marketable securities.............           4,683             2,367  |             (113)           6,082               (73)
Foreign currency translation                                          |
adjustments.......................          (4,632)           (5,483) |              718             (211)               94
                                   ---------------  ----------------  |  ---------------  ---------------  ----------------
Comprehensive income (loss).......      $     (707)    $     (11,894) |    $      (1,217)    $      4,877      $       (841)
                                   ===============  ================  |  ===============  ===============  ================
</TABLE>


                                       12
<PAGE>

5.   SEGMENT REPORTING.

     Since the change in control of the Company pursuant to the Todd Merger in
     June 2000, the Company's business units have been aggregated into four
     reportable operating segments: Content Preparation, Content Management,
     Content Distribution and Europe. The Audio Services, Entertainment
     Television and Commercial Television Divisions which make up the Content
     Preparation segment provide the technical and creative services necessary
     to conform original film or video principal photography into a final
     product suitable for the public. These are the more traditional
     post-production services such as creating music and sound effects, as
     well as visual effects. State-of-the-art facilities and equipment are used
     to digitally create or manipulate sounds and images in high resolution
     formats for integration into feature films, television shows and television
     commercials. The Content Management segment primarily consists of the
     Library Services Division which provides the formatting, archiving, storage
     and maintenance of master copies of original film and video tape. In
     addition, this segment restores damaged content, transfers and converts
     film to video (and vice versa), provides audio layback and standards
     conversion, and professional duplication. The segment facilitates the
     worldwide distribution of content in formats ranging from HDTV to streaming
     media. The Content Distribution segment consists of the Broadcast Services
     Division which provides the facilities and services necessary to assemble
     and distribute programming content for cable and broadcast networks via
     freight, fiber, satellite and the Internet to viewers in North America,
     Europe and Asia. These services principally include production, on-air
     promotion, language translation, assembly, origination and distribution,
     fiber transport, uplink and satellite transponder services, and video
     equipment rentals. The Company maintains a separate segment and management
     structure for its European/United Kingdom ("UK") activities because of the
     size and scope of these operations. The various operations are grouped
     according to function and client base, and are tightly linked to the
     Company's other major operating segments. The Other column includes
     corporate related items and income and expenses not allocated to reportable
     segments. The Company's reportable operating segments have been determined
     in accordance with the Company's internal management structure, which is
     organized based on operating activities. The Company evaluates performance
     based upon several factors, including segment income (loss) before income
     taxes, interest, depreciation and amortization of intangibles.

     Periods prior to June 2000 have been restated to conform to the current
     reportable operating segments.

     Summarized financial information concerning the Company's reportable
     segments is shown in the following tables:

<TABLE>
<CAPTION>

(DOLLARS IN THOUSANDS)
                                                 CONTENT        CONTENT        CONTENT
LIVEWIRE                                       PREPARATION    MANAGEMENT     DISTRIBUTION     EUROPE       OTHER         TOTAL
-------------------------------------------   -------------  ------------  ---------------  ----------   ----------   ----------
THREE MONTHS ENDED
   SEPTEMBER 30, 2000:

   <S>                                        <C>            <C>           <C>              <C>          <C>          <C>
   Revenues ...............................       $52,868       $13,066       $ 8,641       $24,203       $ 1,664       $100,441
   Income before income taxes, interest,
    depreciation and amortization .........         1,947         2,382         1,111         2,551        20,541         28,532
   Capital expenditures ...................         8,743           536         3,301           786           902         14,268
   Depreciation and amortization expense ..         9,170         1,807         1,491         3,442         3,660         19,571
FOUR MONTHS ENDED
   SEPTEMBER 30, 2000

   Revenues ...............................       $66,070       $16,833       $10,512       $31,476       $ 2,414       $127,307
    Income (loss) before income taxes,
    interest, depreciation and amortization         1,682         2,582         1,862         3,829        14,120         24,076
   Capital expenditures ...................        13,778           670         3,301         4,508           976         23,233
   Depreciation and amortization expense ..        11,676         2,444         1,910         4,466         4,936         25,433
--------------------------------------------------------------------------------------------------------------------------------

</TABLE>


                                       13
<PAGE>


<TABLE>
<CAPTION>

                                                 CONTENT          CONTENT          CONTENT
TODD-AO                                        PREPARATION      MANAGEMENT      DISTRIBUTION     EUROPE       OTHER        TOTAL
--------------------------------------------  --------------  ----------------  --------------  ----------  -----------  ----------
THREE MONTHS ENDED
   AUGUST 31, 1999:

<S>                                           <C>             <C>               <C>             <C>         <C>          <C>
   Revenues.................................      $   16,020       $     3,538              --    $  8,531     $     --    $ 28,089
    Income (loss) before income taxes,
    interest, depreciation and amortization.             963               732              --       1,414       (1,580)      1,529
   Capital expenditures.....................           2,821                --              --          --           --       2,821
   Depreciation and amortization expense....           1,603               280              --       1,211           --       3,094

FIVE MONTHS ENDED
   MAY 31, 2000:

   Revenues.................................      $   32,595       $     6,270              --    $ 14,378     $           $ 53,243
    Income before income taxes, interest,
    depreciation and amortization...........           3,692             1,389              --       2,725         (965)      6,841
   Capital expenditures.....................           2,262               161              --       1,615           --       4,038
   Depreciation and amortization expense....           3,452               557              --       2,235           --       6,244


NINE MONTHS ENDED
  AUGUST 31, 1999:
   Revenues.................................      $   45,867       $    10,591              --    $ 28,112     $     --    $
84,570
    Income before income taxes, interest,
    depreciation and amortization...........           2,441             2,640              --       6,559         (751)     10,889
   Capital expenditures.....................           9,414               934              --       8,280           --      18,628
   Depreciation and amortization expense....           4,627               935              --       3,864           --       9,426
LIVEWIRE
-------------------------------------------
SEPTEMBER 30, 2000:

   Identifiable assets......................      $  203,503       $    39,682      $   13,996    $ 55,530     $146,703    $459,414
   Intangible assets - net..................         170,211               523          35,110      56,116      271,763     533,723
-----------------------------------------------------------------------------------------------------------------------------------
TODD-AO
-------------------------------------------
DECEMBER 31, 1999

   Identifiable assets......................      $   76,431       $     9,143              --    $ 40,681           --    $126,255
   Intangible assets - net..................          22,934                --              --      10,462           --      33,396

</TABLE>


     The following table reconciles segment income before income taxes,
     interest, depreciation and amortization to the Company's consolidated
     net income:


<TABLE>
<CAPTION>

       (DOLLARS IN THOUSANDS)
                                               LIVEWIRE               |                      TODD-AO
                                   ---------------------------------  | --------------------------------------------------
                                    THREE MONTHS      FOUR MONTHS     |  THREE MONTHS     FIVE MONTHS       NINE MONTHS
                                       ENDED             ENDED        |     ENDED            ENDED             ENDED
                                   SEPTEMBER 30,     SEPTEMBER 30,    |   AUGUST 31,        MAY 31,         AUGUST 31,
                                        2000             2000         |      1999             2000             1999
                                   ---------------  ----------------  | ---------------  ---------------  ----------------
 <S>                               <C>              <C>                 <C>              <C>              <C>
 Income before income taxes,                                          |
   interest, depreciation and                                         |
   amortization...................    $     29,529      $     24,983  |    $      1,529     $      6,841      $     10,889
 Depreciation and amortization...          (19,571)          (25,433) |          (3,094)          (6,244)           (9,426)
 Interest expense.................          (7,243)           (9,543) |          (1,125)          (2,032)           (2,751)
 Provision for income taxes.......          (3,473)            1,215  |             868              441               426
                                   ---------------  ----------------  | ---------------  ---------------  ----------------
Net (loss)........................    $       (758)     $     (8,778) |    $     (1,822)    $       (994)     $       (862)
                                   ===============  ================  | ===============  ===============  ================
</TABLE>



                                       14

<PAGE>


6.   ACCOUNTING STANDARDS.

     In June 1998, the FASB issued SFAS No. 133 ("FAS 133"), "Accounting For
     Derivative Instruments and Hedging Activities". In July 1999 the FASB
     issued SFAS No. 137, "Deferral of the Effective Date of FASB Statement No.
     133" which deferred the effective date of FAS 133 to no later than January
     1, 2001 for the Company's financial statements. FAS 133 requires companies
     to record derivatives on the balance sheet at fair value. Changes in the
     fair values of those derivatives would be reported in the earnings or other
     comprehensive income depending on the use of the derivative and whether it
     qualifies for hedge accounting. The key criterion for hedge accounting is
     that the hedging relationship must be highly effective in achieving
     offsetting changes in fair value of assets or liabilities or cash flows
     from forecasted transactions. In June 2000, the FASB issued SFAS No. 138,
     "Accounting For Certain Derivative Instruments and Certain Hedging
     Activities", an amendment of FAS 133. The Company does not expect to
     implement FAS 133 before January 1, 2001 and is in the process of assessing
     the impact of the implementation on the financial statements.

7.   RELATED PARTY TRANSACTIONS

     Pursuant to the Todd Merger, Livewire and Liberty Media entered into a
     convertible debt facility agreement (the "debt agreement"). The debt
     agreement provides for aggregate credit commitments of $125 million,
     drawable at Livewire's option in whole or in part at any time during the
     4-year period following June 9, 2000 and maturing on June 9, 2004. The
     loans under the debt agreement will be unsecured senior subordinated
     obligations, ranking junior to Livewire's current bank facility. The
     convertible loans will bear interest at 4% per annum, payable quarterly in
     arrears in cash, and will be convertible at the option of Liberty Media
     into shares of Livewire's Class B Common Stock at a conversion price of
     $13.00 per share.

     The Company filed its own consolidated federal income tax return up to May
     31, 2000. Starting June 1, 2000, the Company is included in the
     consolidated tax return of AT&T pursuant to the terms of a Tax Liability
     Allocation and Indemnification Agreement to be entered into with its
     parent, Liberty Media (the "Tax Sharing Agreement"). The Tax Sharing
     Agreement is now at the final stage of documentation but remains subject to
     approval by the Company's Board of Directors.

     The income tax provision for the Company is calculated based on a
     hypothetical tax liability determined as if the Company filed a separate
     tax return.

     Under the Tax Sharing Agreement, the Company will record a current
     intercompany tax benefit from Liberty Media in periods when it generates
     taxable losses and such losses are utilized by Liberty Media to reduce its
     income tax liability. In periods when the Company generates taxable income,
     the Company will record current intercompany tax expense. Liberty Media
     will pay cash to the Company if the Company becomes disaffiliated for any
     reason from the combined group that files the joint return and when one of
     the following occurs: a tax refund is received by Liberty Media that is
     determined to relate to amounts paid by Livewire, or the Company has a tax
     liability under a separate return and had a net cumulative benefit for net
     operating losses or credits that were utilized by the Liberty Media Group
     to the extent of the separate return liability and which would not have
     expired at the time of the filing of the separate return. Additionally, if
     the Liberty Media Group does not own 20% of the voting power (loss of
     control) of Livewire, Liberty Media will pay Livewire an amount equal to
     the cumulative net tax benefit utilized by the Liberty Media Group which
     would not have expired at the time of loss of control.

8.   STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

     Pursuant to the acquisition of 4MC by Liberty Media each outstanding 4MC
     stock option was converted into a stock appreciation right ("SARs") at a
     ratio 0.32258 shares of LMGA stock for each 1.0 share of 4MC stock. Upon
     the election to exercise, holders of vested SARs have the option of
     receiving any net cash appreciation of LMGA stock over the exercise price
     or may exercise into shares of LMGA stock. The accrued expense for SARs
     recorded by Liberty Media at the acquisition of 4MC was $52.9 million. The
     accrued expense "pushed down" at June 9, 2000 under the Contribution
     Agreement between Liberty Media and the Company was $30.8 million. The
     accrued expense at September 30,2000 is $19.5 million. The condensed
     consolidated statement of income for the three months ended September 30,
     2000 reflects a credit adjustment of $18.4 million due to the decline in
     the stock price underlying the SARs. The condensed consolidated statement
     of income for the four months ended September 30, 2000 reflects a credit
     adjustment of $11.1 million, consisting of a debit adjustment of $7.4
     million due to the increase in the underlying stock price as of June 30,
     2000 and a credit adjustment of $18.4 million due to the decline in the
     underlying stock price as of September 30, 2000. Upon delivery of an
     exercise notice to the Company by a participant in the option plan, the
     Company forwards such notice to Liberty Media. Liberty Media processes the
     exercise notice. If the participant has elected a cash settlement for the
     options, Liberty Media will remit funds equivalent to the difference
     between the LMGA share price established by a ten day trailing average as
     of the day prior to the exercise and the exercise price for the
     participant's


                                       15
<PAGE>

     options multiplied by the number of shares exercised. If the participant
     elects to receive LMGA shares directly, the participant will remit to the
     Company a payment equivalent to the exercise price for the participant's
     options multiplied by the number of shares exercised. Liberty Media will
     issue shares directly to the participant equivalent to the number of shares
     exercised.

     Pursuant to the Todd Merger, each outstanding Todd-AO stock option became
     fully vested and was converted into a rollover option to purchase 0.5 of a
     LMGA share and 0.4 of a Todd-AO Class A stock. All of such rollover options
     automatically expires six months from the acquisition date of June 9, 2000.

     A Stock Option Fulfillment Agreement ("Agreement") was executed between
     Liberty Media and Livewire as of June 10, 2000 to create a mechanism for
     Livewire to fulfill its obligations under the rollover options as they
     pertain to shares of LMGA.

     Pursuant to the Agreement, Livewire purchases LMGA stock on the open market
     to fulfill the 0.5 LMGA share portion of the options elected for exercise.
     To fund such purchases, Liberty Media will contribute cash to Livewire
     equal to (i) the number of LMGA shares delivered pursuant to the rollover
     option elections TIMES (ii) the average of the high and low price per LMGA
     share during the day the rollover option is exercised. In consideration for
     such capital contributions, Livewire issues shares of Livewire's Class B
     Common Stock in an amount equal to (i) the number of LMGA shares
     deliverable upon exercise, TIMES (ii) 1.2.

     As of September 30, 2000, 212,700 shares of Livewire Class A shares have
     been issued for rollover option exercises valued at $3.4 million and
     319,000 shares of Livewire Class B shares have been issued to Liberty Media
     valued at $6.1 million as consideration for payments made to Livewire for
     the purchase of LMGA stock on the open market. A related receivable due
     from Liberty Media of $6.1 million has been recorded as of September 30,
     2000. A gain on investment of $652,000 has been included in the statement
     of income based on the decrease in LMGA stock price between the date of
     option exercises and the date the LMGA shares were purchased by Livewire on
     the open market.

9.   SUBSEQUENT EVENTS.

     On July 25, 2000 Liberty Media entered into a definitive merger
     agreement to acquire all of the outstanding capital stock of Video
     Services Corporation ("VSC"). Immediately following the merger, Liberty
     Media will contribute all of the capital stock of VSC to the Company.
     For each share of VSC common stock outstanding, shareholders of VSC will
     receive 0.104 of a share of LMGA Common Stock and $2.75 in cash, in a
     taxable exchange. An aggregate of approximately 1,400,000 shares of LMGA
     plus approximately $37 million in cash will be issued to VSC shareholders
     in the transaction. The merger is subject to the affirmative vote of
     VSC's stockholders as well as other customary closing conditions.
     Stockholders of VSC, controlling approximately 72% of the outstanding
     common stock, have entered into a voting agreement with Liberty Media to
     vote in favor of the merger agreement and the merger.

     Based on the closing price of LMGA stock on November 8, 2000, the
     transaction values VSC at approximately $127 million, including the
     assumption of certain indebtedness. Immediately after Liberty Media
     acquires VSC pursuant to such merger, Liberty Media will contribute 100%
     of VSC's outstanding stock to Livewire, subject to Livewire's Board of
     Directors approval, in exchange for approximately 4,600,000 shares of
     Livewire's Class B Common Stock. The Company will also assume VSC's
     existing indebtedness and outstanding options for up to 1,125,000 shares
     of VSC common stock (which will be converted in the merger to LMGA
     options). After that transaction, Liberty Media will hold approximately
     36,900,000 shares of Livewire's Class B Common Stock, representing
     approximately 89.4% of the Company's capital stock and approximately
     98.8% of its voting power.

     VSC provides engineering, production and distribution services for the
     video and broadcast industries, nationally and internationally. Generating
     annual revenues of approximately $100 million, it has ten divisions and
     over 500 employees, with offices in New York, New Jersey, Florida and
     California.

     In October 2000, the Company acquired all of the outstanding shares of
     privately held Visiontext Limited ("Visiontext") for L3.3 million
     (approximately $4.8 million). Visiontext, located in London, U.K.,
     primarily supplies Digital Versatile Disk ("DVD") multi-lingual subtitling
     services to clients including the Hollywood film studios and international
     distributors.

     On October 23, 2000 Livewire announced that it has agreed to acquire from
     Viacom, Inc. the U.S. and Singapore based operations of Viacom's Group W
     Network Services business unit ("GWNS") in a transaction valued at
     approximately $112 million. The purchase price is expected to consist of
     $95 million in cash and the assumption of approximately $17 million in
     debt, net of cash acquired. Under the terms of the transaction, Livewire
     will acquire GWNS' channel origination, studio production and
     post-production and satellite transmission facilities located in
     Connecticut, Minnesota and Singapore. The transaction is subject to the
     receipt of required regulatory approvals and other consents. GWNS provides
     technical facilities and distribution services for a client base of
     broadcasters in North America and Asia.


                                       16
<PAGE>

ITEM 2.

     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
     OPERATIONS.

     The following discussion and analysis provides information concerning our
     results of operations and financial condition and should be read in
     conjunction with the accompanying condensed consolidated financial
     statements and notes. Additionally, the following discussion and analysis
     should be read in conjunction with Management's Discussion and Analysis of
     Financial Condition and Results of Operations and financial statements
     included in Part IV of our Annual Report on Form 10-K for the year ended
     August 31, 1999. The following discussion focuses on material trends, risks
     and uncertainties affecting our results of operations and financial
     condition.

     When used in this document, the words "believes," "expects," "anticipates,"
     "intends" and similar expressions are intended to identify forward looking
     statements. Such statements are subject to a number of known risks and
     uncertainties. Actual results in the future could differ materially from
     those described in the forward looking statements. Such risks and
     uncertainties include, but are not limited to, industry-wide market factors
     such as the timing of, and spending on, feature film and television
     programming production, foreign and domestic television advertising, and
     foreign and domestic spending by broadcasters, cable companies and
     syndicators on first run and existing content libraries. In addition, our
     failure to maintain relationships with key customers and certain key
     personnel, more rapid than expected technological obsolescence, and failure
     to integrate acquired operations in expected time frames could also cause
     actual results to differ materially from those described in forward looking
     statements.

     OVERVIEW OF BUSINESS

     We are the world's leading independent provider of technical and creative
     services to the entertainment industry. We provide audio and video
     post-production, transmission, library services, Internet hosting, and
     audio/video distribution services via satellite and fiber for the major
     television producers, motion picture studios, cable and broadcast networks,
     advertising agencies, and other entertainment content companies. We also
     provide interactive television services. Our services integrate and apply a
     variety of systems and processes to enhance the creation and distribution
     of entertainment content.

     Livewire is the result of the combination of certain key companies with
     long standing track records and well respected brand names offering
     "cradle-to-grave" services. Key companies acquired include Todd-AO, 4MC,
     SounDelux and other smaller niche players. Livewire is under the
     direction of a management team, that has extensive experience in running
     worldwide operations in both traditional and new media Content
     Preparation (post-production sound and visual effects), Content
     Management (film, tape, and digital libraries), as well as Content
     Distribution (freight, fiber, satellite, and Internet) services.

     We believe that EBITDA is an important measure of our financial
     performance. "EBITDA" is defined as earnings before interest, taxes,
     depreciation and amortization, excluding gains and losses on asset sales
     and nonrecurring charges. Our investments in new infrastructure, machine
     capacity, technology and goodwill arising from our significant acquisition
     activity have produced a relatively high depreciation and amortization
     expense and will remain a significant non-cash charge to earnings. EBITDA
     is calculated before depreciation and amortization charges and, in
     businesses with significant non-cash expenses, is widely used as a measure
     of cash flow available to pay interest, repay debt, make acquisitions or
     invest in capital equipment and new technologies. As a result, we intend to
     report EBITDA as a measure of financial performance. EBITDA does not
     represent cash generated from operating activities in accordance with
     generally accepted accounting principles ("GAAP") and should not be
     considered in isolation or as a substitute for other measures of
     performance prepared in accordance with GAAP. EBITDA does not reflect that
     portion of our capital expenditures which may be required to maintain our
     market share, revenues and leadership position in our industry. Moreover,
     not all EBITDA will be available to pay interest or repay debt. Our
     presentation of EBITDA may not be comparable to similarly titled measures
     reported by other companies.

     MATERIAL CHANGES IN FINANCIAL CONDITION

     CREDIT AGREEMENTS

     Under a long-term credit agreement with a number of banks, including Bank
     of America ("BA"), dated June 30, 1999, amended on September 19, 2000, and
     expiring on May 31, 2004, we may borrow up to $100 million in revolving
     loans until May 31, 2002. On that date and thereafter, the revolving loan
     commitment will reduce incrementally to nil by the expiration of the
     agreement. Prior to May 31, 2002 we may request an automatic extension of
     the revolving period of the facility for one year


                                       17
<PAGE>

     that will also extend the term period and the expiration date of the
     agreement. In addition to the revolving loans, (but subject to the
     aggregate maximum credit commitment), we also have the availability of
     Standby Letters of Credit up to $20 million under the facility. The
     credit facility provides for borrowings based on the Bank's Reference,
     CD, and LIBOR rate and includes commitment fees on the unused balance of
     the facility. Material restrictive covenants and ratios, as defined,
     include minimum ratios of fixed charge coverage and maximum ratios of
     leverage, limitations on other indebtedness and minimum levels of net
     worth. As of September 30, 2000, we are in compliance with the covenants.

     Through September 30, 2000 we have signed three agreements with BA to
     implement the sale/leaseback of certain equipment. An aggregate of $28.5
     million of sound studio and video equipment has been sold and leased back.
     The agreements, as amended, terminate on December 30, 2000, December 1,
     2002 and December 30, 2005. All the agreements provide for interest based
     on LIBOR rates.

     On June 9, 2000 and in connection with the Todd Merger, we amended our bank
     credit facility and certain sale/leaseback agreements to allow Robert
     Naify, Marshall Naify, and Salah M. Hassanein to relinquish their aggregate
     control of more than 20% of the capital stock and more than 50% of the
     voting power of the Company to Liberty Media. In connection with the
     post-merger acquisition of 4MC, we also obtained a written waiver which
     allowed the exclusion of 4MC's existing indebtedness from certain covenants
     and restrictions under the credit agreement and confirmed the existing
     indebtedness of 4MC as non-recourse to the Company and its subsidiaries.

     The 4MC financing agreement, entered into on February 27, 1998, represents
     $200 million in credit facilities from a group of banks, including Canadian
     Imperial Bank of Commerce ("CIBC"). The facilities include two $75 million
     term loans ("Term A" and "Term B") and a $50 million revolver ("Revolver").
     Both Term A and the Revolver mature on January 31, 2004 and are reduced by
     quarterly amounts beginning April 30, 2000 as specified in the financing
     agreement. Term A and the Revolver bear interest at LIBOR plus a margin
     ranging from 1.5% to 2.5%, based upon leverage ratios. In addition, a
     commitment fee of 0.50% is imposed on the unused portions of the Term A and
     Revolver loans. Term B matures July 31, 2004 and is reduced quarterly
     beginning April 30, 1998. Term B bears interest at LIBOR plus a margin
     ranging from 1.75% to 2.75% based on leverage ratios. Borrowings under the
     agreement are collateralized by substantially all of the assets of 4MC. The
     agreement contains certain restrictive covenants and ratios, as defined,
     including minimum amounts of operating cash flow, limitations on capital
     expenditures, minimum ratios of interest coverage and fixed charge
     coverage, and maximum ratios of leverage.

     In May 2000, 4MC entered into an additional $75 million credit facility
     with CIBC primarily to fund the Virgin acquisition ("Virgin Facility").

     In addition to the bank facilities, Livewire has a convertible debt
     facility with Liberty Media as described in note 7 to the accompanying
     financial statements. Under the debt agreement Livewire can draw up to $125
     million in whole or in part until the expiration date of June 9, 2004. The
     loans bear interest at 4% per annum, payable quarterly in arrears in cash,
     and are convertible at the option of Liberty Media into shares of Livewire
     Class B Common Stock at a conversion price of $13.00 per share.

     The credit facilities are available for general corporate purposes, capital
     expenditures and acquisitions. Management believes that funds generated
     from operations, proceeds from the sale/leaseback agreements and the
     borrowings available under the credit facilities will be sufficient to meet
     the needs of the Company for the immediate future.

     We have used the BA credit facility principally for capital expenditures
     and to fund acquisitions. The CIBC credit facility was used to refinance
     debt outstanding at its inception, to fund acquisitions, capital
     expenditures and other working capital requirements.

     As of September 30, 2000, we had $79.4 million outstanding under the BA
     credit facility and $254.0 million outstanding under the CIBC credit
     facility. The CIBC outstanding debt at September 30, 2000 consists of $67.5
     million and $45.0 million under Term A and Revolver, respectively, and
     $73.1 million under Term B. We have $68.4 million outstanding under the
     Virgin Facility term loan. We have no outstanding debt under the Liberty
     Media convertible debt facility.

     We exercised an option to purchase for $5.7 million the equipment currently
     being leased under the sale/leaseback transaction maturing in December
     2000. The purchase will be funded by borrowings under credit facilities.


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<PAGE>


     CAPITAL EXPENDITURES

     We expect capital expenditures of approximately $85 million for our
     facilities in the next twelve months. These capital expenditures will be
     financed by internally generated funds and borrowings under credit
     facilities.

     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     INTEREST RATE RISKS
     In January 1998 the Company entered into a three-year interest rate swap
     agreement for a notional amount of $10 million to hedge the impact of
     fluctuations in interest rates on its floating rate credit facility. Under
     the agreement, we are obligated to pay 5.65% in exchange for receiving
     three-month LIBOR on the notional amount. Settlements are quarterly and the
     contract expires in March 2001.

     Prior to the acquisition and merger, 4MC entered into an interest rate swap
     agreement with a bank that fixed the interest rate on $75 million of the
     credit facilities debt at 5.74% plus 4MC's margin under the credit
     agreement. The swap agreement terminates in 2001, but is subject to
     extension through 2004 at the bank's option.

     FOREIGN EXCHANGE RATE RISKS
     We do not, at present, have a policy for managing foreign exchange rate
     risk beyond the utilization of local currency borrowings to fund foreign
     acquisitions whenever possible.

     Substantially all of our foreign transactions are denominated in foreign
     currencies, including the liabilities of our foreign subsidiaries.
     Although our foreign transactions are not generally subject to
     significant foreign exchange transactions gains or losses, the financial
     statements of our foreign subsidiaries are translated into United States
     dollars as part of our consolidated financial reporting. Fluctuations in
     the exchange rate therefore will affect our consolidated balance sheets
     and income statements. Until the current year, the British pound and the
     Singapore dollar have been stable relative to the United States dollar.
     However, during the nine months ended September 30, 2000, the British
     pound lost approximately 9.6% and the Singapore dollar lost
     approximately 4.6% of their value relative to the US dollar.

     MATERIAL CHANGES IN RESULTS OF OPERATIONS

     In the following analysis and discussion, Livewire's operations are
     compared with reference to the segments as described in note 5 to the
     accompanying financial statements as well as to the combination of key
     companies acquired through merger and acquisitions.

     The operations of Livewire prior to the acquisition and merger in June 2000
     are referred to as the operations of Todd-AO (the former name of Livewire
     prior to the acquisition) for the purpose of these analysis and discussion
     and include only a portion of the Sound Division and a very small
     proportion of the Entertainment and Commercial Television Divisions of our
     Content Preparation operating segment and a small portion of our Content
     Management segment. In addition, Todd-AO operations include a portion of
     the European operating segment.

     The nine months ended September 30, 2000 represents the operations of
     Todd-AO prior to the acquisition and merger for the five months ended May
     31, 2000 and the combined operations of Livewire for the four months ended
     September 30, 2000. The nine months and three months ended August 31, 1999
     represent only the operations of Todd-AO.

     In order to provide a meaningful basis for comparing the nine months ended
     September 30, 2000 and 1999, and for the purpose of the following
     discussion, the operating results of Livewire for the four month ended
     September 30, 2000 have been combined with the operating results of Todd-AO
     for the five months ended May 31, 2000, and the resulting nine-month
     operating results are compared to the operating results of Todd-AO for the
     nine months ended August 31, 1999. The operating results are not comparable
     between the nine month periods as the five months ended May 31, 2000 and
     the nine months ended August 31, 1999 do not include the effects of
     purchase accounting adjustments related to the Todd Merger, and the
     subsequent period representing the four months ended September 30, 2000
     does include the effects of the purchase accounting adjustments related to
     the Todd Merger.


                                       19
<PAGE>

     NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO NINE MONTHS ENDED AUGUST
     31, 1999

     Revenues increased $96.0 million or 113.5% from $84.6 million to $180.6
     million. Increases in Content Preparation ($55.2 million), Content
     Management ($12.5 million), Content Distribution ($10.5 million) and Europe
     Operations ($28.1 million) were primarily the result of the merger and post
     merger acquisitions of 4MC ($76.9 million), SounDelux ($5.3 million),
     Triumph ($3.1 million) and Soho ($3.3 million) which totaled $88.6 million
     of the increase. In addition, Sound One, acquired by Todd-AO in June 1999
     was responsible for an increase in revenue of approximately $6.4 million.

     Operating costs and other expenses increased $87.0 million or 119.8% from
     $72.6 million to $159.7 million. Increases in Content Preparation ($52.6
     million), Content Management ($11.5 million), Content Distribution ($9.4
     million), Europe Operations ($18.0 million) and a decrease in Other
     Corporate costs ($3.5 million) were primarily the result of the
     acquisitions described above. In connection with the acquisition of 4MC,
     Liberty Media SARs were recorded by the Company. Due to a net decline in
     the underlying stock price of Liberty Media, a credit adjustment of $11.1
     million is reflected in Other Corporate costs for the period.

     As a result of the above, EBITDA, as defined by the Company, increased
     $20.0 million or 167.7% from $11.9 million to $32.0 million for the newly
     combined Livewire.

     Depreciation and amortization increased $22.3 million or 236.1% primarily
     due to the equipment and goodwill acquired with respect to the acquisitions
     and to the increase in goodwill (approximately $64.7 million) as a result
     of the purchase accounting adjustments made in connection with the Todd
     Merger.

     Interest expense increased $8.8 million or 320.8% primarily due to
     financing for the acquisitions and the debts assumed in the acquisitions.

     Other expense decreased $898,000 primarily due to a loss on equipment lease
     commitments ($788,000) recorded by Todd-AO in August 1999.

     Income before taxes decreased $10.1 million from a loss of $1.3 million to
     a loss of $11.4 million primarily as a result of the increases in
     depreciation, goodwill amortization and interest costs incurred with the
     merger and acquisitions.

     As a result of the above, net loss increased $8.9 million from $862,000 to
     $9.8 million.

     THREE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO THREE MONTHS ENDED AUGUST
     31, 1999

     Revenues increased $72.4 million or 257.6% from $28.1 million to $100.4
     million. Increases in Content Preparation ($38.5 million), Content
     Management ($9.5 million), Content Distribution ($8.6 million) and Europe
     Operations ($15.7 million) were primarily the result of the merger and post
     merger acquisitions of 4MC ($60.2 million), SounDelux ($5.3 million),
     Triumph ($3.1 million) and Soho ($3.3 million) which totaled $71.9 million
     of the increase.

     Operating costs and other expenses increased $65.9 million or 269.3% from
     $24.5 million to $90.3 million. Increases in Content Preparation ($38.1
     million), Content Management ($8.2 million), Content Distribution ($8.3
     million), Europe Operations ($14.9 million) and a decrease in Other
     Corporate costs ($13.7 million) were primarily the result of the
     acquisitions described above. In connection with the acquisition of 4MC,
     Liberty Media SARs were recorded by the Company. Due to a decline in the
     underlying stock price of Liberty Media, a credit adjustment of $18.4
     million is reflected in Other Corporate costs for the period.

     As a result of the above, EBITDA, as defined by the Company, increased
     $24.9 million or 687.1% from $3.6 million to $28.5 million for the newly
     combined Livewire.

     Depreciation and amortization increased $16.5 million or 532.6% primarily
     due to the equipment and goodwill acquired with respect to the acquisitions
     and to the increase in goodwill (approximately $64.7 million) as a result
     of the purchase accounting adjustments made in connection with the Todd
     Merger.

     Interest expense increased $6.1 million or 543.8% primarily due to
     financing for the acquisitions and the debts assumed in the acquisitions.


                                       20
<PAGE>

     Other expense decreased $3.1 million primarily due to a loss on equipment
     lease commitments ($788,000), employment severence costs ($612,000), bad
     debt provisions ($260,000) and a provision for post retirement benefits in
     Todd-AO Filmatic ($370,000) recorded by Todd-AO in 1999 and a gain on
     investments ($650,000) recorded in the current period.

     Income before taxes increased $5.4 million from a loss of $2.7 million to
     income of $2.7 million primarily as a result of the mergers and
     acquisitions described above.

     As a result of the above, operating results improved by $1.1 million
     from a net loss of $1.8 million to a net loss of $758,000.

     MATERIAL CHANGES IN CASH FLOWS

     For the nine months ended September 30, 2000, the Company generated
     $16,532 in cash from operating activities compared to $11,115 in 1999. A
     net loss of $9,772 adjusted for depreciation and amortization of $31,994
     and for a decrease in SARs compensation provisions of $11,088 provided
     cash of $11,134 in 2000 compared to $8,564 in 1999 without SARs
     compensation provisions. Trade receivables remained flat in 2000
     compared to an increase of $5,363 in 1999. Accounts payable and accrued
     expenses remained relatively flat in both years. Cash provided by
     operations was utilized primarily to fund capital expenditures in 2000
     and to fund trade receivables and capital expenditures in 1999.

     Net borrowings from the Company's credit facilities and Liberty Media of
     $45,025 supplemented by cash generated from the exercise of stock options
     of $4,201 and cash acquired in the 4MC contribution of $14,066 were used to
     acquire Triumph and Soho and to reinvest in capital assets of the Company
     in 2000. Net borrowings from the Company's credit facility of $12,487
     supplemented by cash generated from the exercise of stock options of $1,099
     and cash acquired through the sale/leaseback of certain equipment in the
     amount of $8,809 were used to acquire Sound One and to reinvest in capital
     assets of the Company in 1999.



                                       21

<PAGE>



                           PART II - OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

     We are involved in litigation and similar claims incidental to the conduct
     of our business. None of the pending actions is likely to have a material
     adverse impact on our financial position or results of operations.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K


    (a).  (1)  A report on Form 8-K was filed on June 9, 2000 disclosing an
               announcement by Todd-AO Corporation and Liberty Media Group
               regarding changes in a previously announced transaction with
               SoundDelux Entertainment Group, Inc.
          (2)  A report on Form 8-K was filed on June 13, 2000 disclosing a
               change in control of Registrant, an announcement that Todd-AO
               Corporation had changed its name to Liberty Livewire Corporation,
               the completion of its previously announced transaction with
               Liberty Media Group and the acquisition of 100% of the capital
               stock of Four Media Company by Liberty Media Corporation.
          (3)  A report on Form 8-K was filed on August 3, 2000 disclosing
               the acquisition by Liberty Livewire Corporation from Liberty
               Media Corporation of 100% of the capital stock of Four Media
               Company.
          (4)  A report on Form 8-K was filed on August 9, 2000 disclosing
               the acquisition of certain assets and liabilities of SounDelux
               Entertainment Group of Delaware, Inc. by Liberty Livewire
               Corporation from Liberty Media Corporation.
          (5)  A report on Form 8-K was filed on August 17, 2000 disclosing
               the change of Liberty Livewire's Fiscal year end from August
               31 to December 31.
          (6)  Exhibit 27 Financial Data Schedule.



                                    SIGNATURE


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



                                         LIBERTY LIVEWIRE CORPORATION



  November 13, 2000                             /s/  JEFFERY J. MARCKETTA
----------------------                   ---------------------------------------
          Date                                       Jeffery J. Marcketta
                                                     Chief Financial Officer



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