<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 FEBRUARY 29, 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

                             THE TODD-AO 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)

        900 N. SEWARD STREET, HOLLYWOOD, CALIFORNIA                    90038
             (Address of principal executive offices)                (Zip Code)

Registrant's telephone number, including area code: (323) 962-5304

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 April 4, 2000 was: 9,040,218
Class A Shares and 1,747,178 Class B Shares.

<PAGE>

THE TODD-AO CORPORATION

QUARTERLY REPORT ON FORM 10-Q

FEBRUARY 29, 2000

<TABLE>
<CAPTION>

INDEX
---------------------------------------------------------------------------------------------------------
PART I - FINANCIAL INFORMATION                                                                       Page
------------------------------
<S>                                                                                                  <C>
  Item 1- FINANCIAL STATEMENTS

     The following financial statements are filed herewith:

          Condensed Consolidated Balance Sheets, February 29, 2000
                 (Unaudited) and August 31, 1999                                                        3

          Condensed Consolidated Statements of Income and Retained Earnings for the
                 Six and Three Months Ended February 28, 1999 and February 29, 2000 (Unaudited)         5

          Condensed Consolidated Statements of Cash Flows for the Six Months Ended
                 February 28, 1999 and February 29, 2000 (Unaudited)                                    6

          Notes to Condensed Consolidated Financial Statements for the Six Months
                 Ended February 29, 2000 (Unaudited)                                                    8

  Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS                                               12



PART II - OTHER INFORMATION

  Item 1 - Legal Proceedings                                                                           15

  Item 6 - Exhibits and Reports on Form 8-K                                                            15

           Signature                                                                                   15
</TABLE>

                                               2

<PAGE>

                             THE TODD-AO CORPORATION

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)

                                     ASSETS

<TABLE>
<CAPTION>
                                                                                    AUGUST 31,    FEBRUARY 29,
                                                                                  -------------  -------------
                                                                                      1999           2000
                                                                                                  (UNAUDITED)
                                                                                  -------------  -------------
<S>                                                                               <C>            <C>
CURRENT ASSETS:
Cash and cash equivalents..............................................               $   9,739      $   9,652
Marketable securities..................................................                   1,317            412
Trade receivables
   (net of allowance for doubtful accounts of $1,215 at
   August 31, 1999 and $1,275 at February 29, 2000) ...................                  18,169         22,828
Income tax receivable..................................................                     634            493
Inventories (first-in first-out basis).................................                     856            744
Deferred income taxes..................................................                     755            755
Prepaid deposits and other.............................................                   3,005          3,013
                                                                                  -------------  -------------
Total current assets...................................................                  34,475         37,897
                                                                                  -------------  -------------
INVESTMENTS............................................................                     892          4,365
                                                                                  -------------  -------------
PROPERTY AND EQUIPMENT - At Cost:
Land...................................................................                   4,270          4,270
Buildings..............................................................                  17,688         17,650
Leasehold improvements.................................................                  18,603         19,384
Lease acquisition costs................................................                   2,187          2,187
Equipment..............................................................                  79,651         86,649
Equipment under capital leases.........................................                   1,151          1,151
Construction in progress...............................................                   4,803          2,954
                                                                                  -------------  -------------
Total..................................................................                 128,353        134,245
Accumulated depreciation and amortization..............................                 (48,305)       (54,708)
                                                                                  -------------  -------------
Property and equipment - net...........................................                  80,048         79,537
                                                                                  -------------  -------------
GOODWILL
   (net of accumulated amortization of $2,875 at
   August 31, 1999 and $3,565 at February 29, 2000)....................                  33,875         33,185
                                                                                  -------------  -------------
OTHER ASSETS...........................................................                   3,890          2,740
                                                                                  -------------  -------------
TOTAL..................................................................               $ 153,180     $  157,724
                                                                                  =============  =============
</TABLE>

           See notes to condensed consolidated financial statements.

                                             3

<PAGE>

                             THE TODD-AO CORPORATION

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


                      LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                                                    AUGUST 31,     FEBRUARY 29,
                                                                                  --------------  -------------
                                                                                      1999            2000
                                                                                                   (UNAUDITED)
                                                                                  --------------   -------------
<S>                                                                               <C>              <C>
  CURRENT LIABILITIES:
  Accounts payable.......................................................              $   5,465       $   5,127
  Accrued liabilities:
     Payroll and related taxes...........................................                  3,089           3,714
     Interest............................................................                    762             503
     Equipment lease.....................................................                  1,588           1,404
     Other...............................................................                  4,706           3,641
       Income taxes payable..............................................                  2,247           1,674
  Current maturities of long-term debt...................................                    979             800
  Capitalized lease obligations - current................................                    336             324
  Deferred income........................................................                    914           1,053
                                                                                   -------------   -------------
  Total current liabilities..............................................                 20,086          18,240
                                                                                   -------------   -------------


  LONG-TERM DEBT.........................................................                 65,520          61,866
  DEFERRED COMPENSATION AND OTHER........................................                  1,439           1,303
  DEFERRED GAIN ON SALE/LEASEBACK TRANSACTIONS...........................                  4,046           3,674
  DEFERRED INCOME TAXES..................................................                  3,254           3,254
                                                                                   -------------   -------------
  Total liabilities......................................................                 94,345          88,337
                                                                                   -------------   -------------
  COMMITMENTS AND CONTINGENCIES

  STOCKHOLDERS' EQUITY:
  Common Stock:
     Class A; authorized 30,000,000 shares of $0.01 par value; issued 8,124,333
     at August 31, 1999 and 9,008,180 at
     February 29, 2000...................................................                     82              91
     Class B; authorized 6,000,000 shares of $0.01 par value;
     issued and outstanding 1,747,178....................................                     17              17
  Additional capital.....................................................                 37,887          47,306
  Treasury stock (6,000 shares at cost as of August 31, 1999
      and February 29, 2000).............................................                    (47)            (47)
  Retained earnings......................................................                 21,432          21,997
  Accumulated other comprehensive income (loss) .........................                   (536)             23
                                                                                   -------------   -------------
  Total stockholders' equity.............................................                 58,835          69,387
                                                                                   -------------   -------------
  TOTAL..................................................................              $ 153,180       $ 157,724
                                                                                   =============   =============
</TABLE>

           See notes to condensed consolidated financial statements.

                                          4

<PAGE>

                             THE TODD-AO CORPORATION

        CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
   FOR THE SIX AND THREE MONTHS ENDED FEBRUARY 28, 1999 AND FEBRUARY 29, 2000
                                   (UNAUDITED)
                (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                              SIX MONTHS                THREE MONTHS
                                                                     -------------------------- --------------------------
                                                                        1999          2000          1999          2000
                                                                     ------------  ------------  ------------  ------------
                                                                       RESTATED
<S>                                                                  <C>           <C>           <C>           <C>
REVENUES.....................................................           $  62,335     $  64,675     $  28,388     $  31,119
                                                                     ------------  ------------  ------------  ------------
COSTS AND EXPENSES:
Operating costs and other expenses...........................              49,701        52,344        23,920        26,092
Depreciation and amortization................................               6,371         7,298         2,968         3,718
Interest.....................................................               1,618         2,498           752         1,239
Equipment lease expense - net................................                 420         1,409           365           480
Other expense (income) - net.................................                (811)          277          (879)          175
                                                                     ------------  ------------  ------------  ------------
Total costs and expenses.....................................              57,299        63,826        27,126        31,704
                                                                     ------------  ------------  ------------  ------------
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES AND CHANGE IN
  ACCOUNTING PRINCIPLE                                                      5,036           849         1,262          (585)
PROVISION FOR INCOME TAXES...................................               1,671           284           365          (142)
                                                                     ------------  ------------  ------------  ------------
INCOME (LOSS) BEFORE CHANGE IN
   ACCOUNTING PRINCIPLE......................................               3,365           565           897          (443)
CHANGE IN ACCOUNTING PRINCIPLE,
   NET OF INCOME TAXES OF $150...............................                (293)           --            --            --
                                                                     ------------  ------------  ------------  ------------
NET INCOME (LOSS)............................................               3,072           565       $   897      $   (443)
                                                                                                 ============  ============
RETAINED EARNINGS BEGINNING OF PERIOD........................              20,538        21,432
LESS: DIVIDENDS PAID                                                         (280)           --
                                                                     ------------  ------------
RETAINED EARNINGS END OF PERIOD..............................           $  23,330     $  21,997
                                                                     ============  ============
NET INCOME (LOSS) PER COMMON SHARE:
Net income (loss) available to common stockholders...........            $  3,072       $   565       $   897      $   (443)
Effect of dilutive securities:  5% convertible debentures....                 129            --            62            --
                                                                     ------------  ------------  ------------  ------------
Net income (loss) available to common stockholders
   plus assumed conversions..................................            $  3,201       $   565       $   959      $   (443)
                                                                     ============  ============  ============  ============
WEIGHTED AVERAGE SHARES
   OUTSTANDING - BASIC.......................................           9,506,418    10,166,543     9,477,070    10,450,259
Effect of dilutive securities:
   Stock options.............................................             380,694       341,549       429,850            --
   5% convertible debentures.................................             670,509            --       643,341            --
                                                                     ------------  ------------  ------------  ------------
WEIGHTED AVERAGE SHARES
   OUTSTANDING - DILUTED.....................................          10,557,621    10,508,092    10,550,261    10,450,259
                                                                     ------------  ------------  ------------  ------------
NET INCOME (LOSS) PER COMMON SHARE:
   Income (loss) before change in
      accounting principle - Basic...........................            $   0.35      $   0.06      $   0.10      $  (0.04)
   Change in accounting principle............................               (0.03)           --            --            --
                                                                     ------------  ------------  ------------  ------------
   Net income (loss) - Basic.................................            $   0.32      $   0.06      $   0.10      $  (0.04)
                                                                     ============  ============  ============  ============
   Income (loss) before change in
      accounting principle - Diluted.........................            $   0.33      $   0.05      $   0.09      $  (0.04)
   Change in accounting principle............................               (0.03)           --            --            --
                                                                     ------------  ------------  ------------  ------------
   Net income (loss) - Diluted...............................            $   0.30      $   0.05      $   0.09      $  (0.04)
                                                                     ============  ============  ============  ============
</TABLE>

           See notes to condensed consolidated financial statements.

                                        5

<PAGE>



                           THE TODD-AO CORPORATION

               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
   FOR THE SIX MONTHS ENDED FEBRUARY 28, 1999 AND FEBRUARY 29, 2000 (UNAUDITED)
                            (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                    1999           2000
                                                                                -------------  -------------
                                                                                  RESTATED
<S>                                                                             <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income.........................................................               $   3,072       $    565
  Adjustments to reconcile net income to net cash
     provided by operating activities:
     Depreciation and amortization...................................                   6,371          7,298
     Deferred income taxes...........................................                     (56)            --
     Deferred compensation and other.................................                     (93)          (110)
     Foreign currency exchange rate..................................                      --           (241)
     Amortization of deferred gain on
         sale/leaseback transaction..................................                  (1,230)          (372)
     (Gain) on sale of marketable securities
         and investments.............................................                      --           (391)
     (Gain) on disposition of fixed assets...........................                    (190)            (4)
     Changes in assets and liabilities (net of acquisitions):
        Trade receivables, net.......................................                  (2,824)        (4,659)
        Inventories and other current assets.........................                     557            353
        Accounts payable and accrued liabilities.....................                    (651)        (1,037)
        Accrued equipment lease......................................                     181           (184)
        Income taxes payable, net....................................                   1,178           (681)
        Provision for liabilities....................................                    (559)           (26)
        Deferred income..............................................                     109            139
                                                                                -------------  -------------
Net cash flows provided by operating activities .....................                   5,865            650
                                                                                -------------  -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of marketable securities and investments..................                     (92)          (674)
  Proceeds from sale of marketable securities
     and investments.................................................                      --          1,381
  Proceeds from disposition of fixed assets..........................                     136             23
  Capital expenditures...............................................                  (8,640)        (6,116)
  Purchase of 50% investment in 103 Estudio, S.L.....................                      --         (2,084)
  Other assets.......................................................                     237          1,150
                                                                                -------------  -------------
Net cash flows (used in) investing activities........................               $  (8,359)     $  (6,320)
                                                                                -------------  -------------
</TABLE>

                                        6

<PAGE>



                             THE TODD-AO CORPORATION

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  FOR THE SIX MONTHS ENDED FEBRUARY 28, 1999 AND FEBRUARY 29, 2000 (UNAUDITED)
                             (DOLLARS IN THOUSANDS)
                                   (CONTINUED)

<TABLE>
<CAPTION>
                                                                                   1999          2000
                                                                               -------------  ------------
                                                                                 RESTATED
<S>                                                                            <C>            <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
  Borrowings of long-term debt.........................................            $  10,846     $   4,848
  Payments of long-term debt...........................................              (10,068)       (1,082)
  Payments on capital lease obligations................................                  (52)          (12)
  Proceeds from sale/leaseback transaction.............................                8,809            --
  Proceeds from issuance of common stock...............................                    4         1,829
  Treasury stock transactions..........................................               (2,989)           --
  Dividends paid.......................................................                 (280)           --
                                                                               -------------  ------------

Net cash flows provided by financing activities........................                6,270         5,583
   Effect of exchange rate changes on cash ............................                   --            --
                                                                               -------------  ------------
NET INCREASE (DECREASE) IN CASH
   AND CASH EQUIVALENTS................................................                3,776           (87)
CASH AND CASH EQUIVALENTS AT
   BEGINNING OF PERIOD.................................................                3,997         9,739
                                                                               -------------  ------------
CASH AND CASH EQUIVALENTS AT
   END OF PERIOD.......................................................            $   7,773     $   9,652
                                                                               =============  ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:

  Interest.............................................................            $   1,392     $   2,706
                                                                               =============  ============

  Income taxes.........................................................             $    240       $     0
                                                                               =============  ============
</TABLE>

           See notes to condensed consolidated financial statements.

                                     7

<PAGE>

THE TODD-AO CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED FEBRUARY 29, 2000 (UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
-------------------------------------------------------------------------------

If complete notes were to accompany these statements they would be
substantially in the same form as those to the Company's Financial Statements
for the Year Ended August 31, 1999. In addition the following notes are
applicable:

1.   In the opinion of management for the Company, all adjustments (which
     comprise only normal recurring accruals) necessary for a fair presentation
     of the results of operations have been included.

2.   The condensed consolidated financial statements include the Company and its
     wholly owned subsidiaries.

3.   During fiscal year 1999, the Company adopted the Statements of Position
     (SOP) No. 98-5, "Reporting on the Costs of Start-Up Activities". The effect
     of the adoption was to record an expense, net of tax, of $293 in 1999. The
     quarter ended November 30, 1998 has been restated to reflect this change.
     The restatement had no impact on previously reported income before change
     in accounting principle.

4.   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.

5.   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 of the purchase, the Company paid $11,962 in cash for the
     common stock and an additional $353 in cash for costs incurred in
     connection with the acquisition. In addition, $800 is represented by
     non-compete agreements. Sound One is the leading post production sound
     facility in New York servicing the entertainment industry.

     The acquisition is being accounted for under the purchase method of
     accounting. The following unaudited pro forma consolidated financial
     information for the six months ended February 28, 1999 is presented as if
     the acquisition had occurred on September 1, 1998. Pro forma adjustments
     for Sound One are primarily for amortization of goodwill and non-compete
     agreements, changes in executive compensation, depreciation adjustments,
     interest expense on borrowings in connection with the acquisition, and
     income taxes.

                                            8

<PAGE>

<TABLE>
<CAPTION>
                                                                              1998
                                                                           ----------
    <S>                                                                    <C>
    Revenues..........................................................        $69,158
                                                                             ========
    Net income before change in accounting principle..................        $ 3,821
                                                                             ========
    Net income........................................................        $ 3,528
                                                                             ========
    Net income per common share - before change in
       accounting principle - Basic...................................        $  0.40
                                                                             ========
    Net income per common share - Basic...............................        $  0.37
                                                                             ========
    Net income per common share - before change in
       accounting principle - Diluted.................................        $  0.37
                                                                             ========
    Net income per common share - Diluted.............................        $  0.35
                                                                             ========
</TABLE>

6.     In December 1998, November 1997 and December 1994 the Company signed
       agreements with its bank to implement the sale/leaseback of certain
       equipment. The agreements, as amended, terminate on December 30, 2005,
       December 1, 2002 and June 30, 2000, respectively, and are being treated
       as operating leases for financial statement purposes. On December 30,
       1998, November 3, 1997 and December 30, 1994 an aggregate of $8,809,
       $8,500 and $11,218, respectively, of sound studio and video equipment was
       sold and leased back. The total deferred gain on the transactions to be
       amortized over five to seven years is $12,525. The annual lease cost
       currently is approximately $3,350.

       The net equipment lease expense is as follows for the six months ended:

<TABLE>
<CAPTION>
                                                                 FEBRUARY 28,    FEBRUARY 29,
                                                                -------------- ---------------
                                                                     1999           2000
                                                                --------------  --------------
<S>                                                             <C>             <C>
Equipment lease costs.........................................       $   1,650       $   1,781
Amortization of deferred gain on sale of equipment............          (1,230)           (372)
                                                                 -------------  --------------
Equipment lease expense, net..................................        $    420       $   1,409
                                                                 =============  ==============
</TABLE>


       In June 2000, one of the Company's sale/leaseback agreements is maturing.
       In fiscal year 1999, the Company exercised its option to purchase for
       $5,699 the equipment currently being leased under this agreement. The
       purchase price exceeds the equipment's estimated fair value, as
       determined by an independent valuation, by approximately $788. The
       Company recorded a pre-tax loss on equipment lease commitments in this
       amount during the fiscal year ended August 31, 1999.

7.     In September 1998, the Company adopted a stock repurchase program under
       which 2,300,000 shares could be purchased from time to time in the open
       market or in private transactions. As of February 29, 2000, 1,621,756
       shares had been repurchased. 1,555,303 of these shares have been
       cancelled and returned to authorized but unissued status. 60,453 of these
       shares were transferred to the Company's 401(k) plan.
       Purchases under this program were discontinued in April 1999.

       In connection with the acquisition of Hollywood Digital, the Company
       issued convertible subordinated notes. In November 1999, the Company
       exercised its right to convert the existing Hollywood Digital notes
       (totalling $7,599) and in December 1999 converted the notes to 643,327
       shares of Todd-AO Class A common stock.

                                       9

<PAGE>

8.     In June 1997, the Financial Accounting Standards Board issued SFAS No.
       130, "Reporting Comprehensive Income." The Company adopted SFAS No. 130
       beginning in the first quarter of fiscal 1999. 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 for the six months ended:

<TABLE>
<CAPTION>
                                                         FEBRUARY 28,   FEBRUARY 29,
                                                        -------------- --------------
                                                             1999            2000
                                                        -------------- --------------
<S>                                                     <C>            <C>
Net income.....................................            $   3,072       $    565
Unrealized gain on marketable securities
   and long-term investments...................                   50          1,177
Less: Classification adjustment for gains
   included in net income......................                   --           (224)
Foreign currency translation adjustments.......                  (31  )        (241)
Tax effect on other comprehensive income.......                  (79  )        (346)
                                                      --------------  -------------
Comprehensive income...........................            $   3,012       $    931
                                                      ==============  =============
</TABLE>

9.   The Company adopted SFAS No. 131, "Disclosures About Segments of an
     Enterprise and Related Information," for its fiscal year ended August 31,
     1999, which changed the way the Company reports information about its
     operating segments. The Company's business units have been aggregated into
     two reportable operating segments: sound and video services. 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.

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

<TABLE>
<CAPTION>
                                               SOUND        VIDEO
                                              SERVICES     SERVICES     OTHER       TOTAL
                                             ----------  -----------  ----------  -----------
<S>                                          <C>         <C>          <C>         <C>
SIX MONTHS ENDED
   FEBRUARY 28, 1999:

   Revenues.............................       $ 22,181     $ 40,154       $  --     $ 62,335
   Income before income taxes,
      interest, depreciation and
      amortization of intangibles.......          3,208        9,688         129       13,025
   Identifiable assets..................         30,795       73,132       2,796      106,723
   Intangible assets, net...............             --       28,680          --       28,680
   Capital expenditures.................          1,536        7,104          --        8,640
   Depreciation expense.................          1,173        4,588          --        5,761

SIX MONTHS ENDED
   FEBRUARY 29, 2000:

   Revenues.............................       $ 23,843     $ 40,832       $  --     $ 64,675
   Income (loss) before income taxes,
      interest, depreciation and
      amortization of intangibles.......             88       10,764        (207)      10,645
   Identifiable assets..................         41,315       77,611       5,613      124,539
   Intangible assets, net...............          7,017       26,168          --       33,185
   Capital expenditures.................          2,353        3,763          --        6,116
   Depreciation expense.................          1,412        5,196          --        6,608
</TABLE>

                                       10

<PAGE>

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

<TABLE>
<CAPTION>
                                                                     SIX MONTHS ENDED
                                                               ------------------------------
                                                               FEBRUARY 28,    FEBRUARY 29,
                                                               --------------  --------------
                                                                   1999            2000
                                                               --------------  --------------
<S>                                                            <C>             <C>
Income before income taxes, interest,
   depreciation and amortization of intangibles...........         $   13,025      $   10,645
Amortization of intangibles...............................               (610)           (690)
Interest expense..........................................             (1,618)         (2,498)
Depreciation..............................................             (5,761)         (6,608)
Provision for income taxes................................             (1,671)           (284)
                                                               --------------  --------------
Net income before change in accounting principle..........              3,365             565
Change in accounting principle, net.......................               (293)             --
                                                               --------------  --------------
Net income................................................          $   3,072        $    565
                                                               ==============  ==============
</TABLE>


10.  On December 10, 1999, the Company entered into an Agreement and Plan of
     Merger (the "Agreement") with Liberty Media Corporation (subject to
     stockholder approval) in which Liberty Media shall acquire 60% of the
     outstanding equity and more than 90% of the outstanding voting power of
     Todd-AO in a tax-free transaction. On March 6, 2000, the Agreement was
     amended to allow the merger closing to occur no later than June 9, 2000, to
     adopt the Amended and Restated Certificate of Incorporation which increases
     the authorized stock of the Company after the merger, and to provide for
     stockholder approval of the terms and conditions of the post-merger
     business combinations of Soundelux Entertainment Group and Four Media
     Company with Todd-AO. A special meeting of Todd-AO stockholders shall occur
     in May 2000.

                                      11

<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
         (DOLLARS IN THOUSANDS, EXCEPT AMOUNTS PER SHARE)

1.     Material Changes in Financial Condition

       Under a new long-term credit agreement dated June 30, 1999 and expiring
       on May 31, 2004, the Company may borrow up to $80,000 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 the Company may request an automatic
       extension of the revolving period of the facility for one year that will
       also extend the term period and the expiration date of the agreement.
       Prior to December 31, 2000 the Company may make a one-time request to
       increase the credit line by up to $20,000. Such increase is at the sole
       discretion of the Banks; however, the Company has the option to bring a
       new bank to the syndicate, thereby avoiding the Banks' discretion. The
       Company also has the availability of Standby Letters of Credit up to
       $20,000 under the facility. The credit facility provides for borrowings
       based on the Bank's Reference, CD, and LIBOR rates. The facility includes
       commitment fees on the unused balance of the credit facility. Other
       material restrictions include: the Fixed Charge Coverage Ratio may not be
       less than 1.25:1; Other Indebtedness (excluding up to $35,000 in Capital
       or Off Balance Sheet Leases, the convertible subordinated notes issued in
       the Hollywood Digital acquisition, non-recourse debt up to $50,000 of
       less than 100% owned Joint Ventures, $5,000 in purchase money mortgage
       financing and the existing TeleCine mortgage debt for the Charlotte
       Street property) may not exceed $10,000; Leverage Ratio is not to exceed
       4:1 through May 31, 2001 (decreasing thereafter); Net Worth is not to be
       less than $54,000 plus net proceeds from issuance of equity plus 50% of
       consolidated net income subsequent to May 31, 1998 (excluding the effect
       of stock repurchases up to $3,000 from the closing date through the
       fiscal year ending August 31, 2000).

       In January 1998 the Company entered into a three-year interest rate swap
       agreement for a notional amount of $10,000 to hedge the impact of
       fluctuations in interest rates on its floating rate credit facility.
       Under the agreement, the Company is 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.

       Through August 31, 1999 the Company has signed three agreements with its
       bank to implement the sale/leaseback of certain equipment. An aggregate
       of $28,527 of sound studio and video equipment has been sold and leased
       back. The agreements, as amended, terminate on June 30, 2000, December 1,
       2002 and December 30, 2005. All the agreements provide for interest based
       on LIBOR rates.

       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 restated credit facility will be
       sufficient to meet the needs of the Company at least through the end of
       2000.

       In June 1997, the Company used $15,760 under its credit facility to
       acquire the assets of Hollywood Digital. In May 1998, the Company used
       $14,000 to fund a substantial portion of the TeleCine acquisition. In
       June 1999, $11,962 was used to fund the Sound One acquisition. In
       September 1999, $2,084 was used to acquire a 50% interest in a
       Barcelona-based sound facility named 103 Estudio, S.L. As of February 29,
       2000, the Company had $55,874 outstanding under the credit facility,
       which has been used principally to fund the acquisitions described and
       for capital expenditures.

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       The Company has exercised its option to purchase for $5,699 the equipment
       currently being leased under the sale/leaseback transaction maturing in
       June 2000. The purchase will be funded by borrowings under credit
       facilities.

       In December 1999, the Company converted subordinated notes totalling
       $7,599 issued in connection with the Hollywood Digital acquisition into
       643,327 shares of Todd-AO Class A common stock.

       The Company expects capital expenditures of approximately $14,000 for its
       Los Angeles, Santa Monica, New York City, Atlanta and London facilities
       in fiscal 2000. These capital expenditures will be financed by internally
       generated funds and borrowings under credit facilities.

       The Company does not believe that it is currently exposed to any material
       foreign exchange rate risk and, at present, does not have a policy for
       managing such risk beyond the utilization of local currency borrowings to
       fund foreign acquisitions whenever possible.

2.     Material Changes in Results of Operations

       SIX MONTHS ENDED FEBRUARY 29, 2000 COMPARED TO SIX MONTHS ENDED FEBRUARY
       28, 1999

       Revenues increased $2,340 or 3.75% from $62,335 to $64,675. Increases in
       revenue due to the acquisition of Sound One in June 1999 ($5,807) were
       offset by lower utilization and activity in the Company's other sound
       services divisions ($4,145) while the Company's video services divisions
       remained flat, increasing revenues by $678.

       Operating costs and other expenses increased $2,643 or 5.32% from $49,701
       to $52,344. Cost increases related to the acquisition of Sound One
       ($4,619) were offset by cost decreases in the Company's other sound and
       video divisions as a result of the revenue decreases described above.

       Depreciation and amortization increased $927 or 14.55% primarily due to
       the equipment and goodwill acquired with the Sound One acquisition.

       Interest expense increased $880 or 54.39% primarily due to the Sound One
       acquisition financing.

       Net equipment lease expense increased $989 primarily as a result of the
       sale/leaseback to the Company's financial institution of certain
       equipment in December 1998.

       Net other expense increased $1,088 primarily due to costs incurred to
       date in connection with the Liberty Media Corporation merger ($810). The
       Company expects to incur additional costs in connection with the Liberty
       merger.

       As a result of the above, income before taxes and net change in
       accounting principle decreased $4,187 from $5,036 to $849 and net income
       before change in accounting principle decreased $2,800 from $3,365 to
       $565.

       The Company elected early adoption of Statement of Position No. 98-5,
       "Reporting on the Costs of Start-Up Activities" in the prior year and
       reported the cumulative effect of a change in accounting principle, as
       described in Accounting Principles Board Opinion No. 20, in the amount of
       $293, net of income tax benefit in the amount of $150.

       As a result of the above, net income after net change in accounting
       principle decreased $2,507 from $3,072 to $565.

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       THREE MONTHS ENDED FEBRUARY 29, 2000 COMPARED TO THREE MONTHS ENDED
       FEBRUARY 28, 1999

       Revenues increased $2,731 or 9.62% from $28,388 to $31,119. Increases in
       revenue due to the acquisition of Sound One in June 1999 ($3,384) were
       offset by lower utilization and activity in the Company's other sound
       services divisions ($1,079) while the Company's video services divisions
       remained flat, increasing revenues by $426.

       Operating costs and other expenses increased $2,172 or 9.08% from $23,920
       to $26,092. Cost increases related to the acquisition of Sound One
       ($2,553) were offset by cost decreases in the Company's other sound and
       video divisions as a result of the revenue decreases described above.

       Depreciation and amortization increased $750 or 25.27% primarily due to
       the equipment and goodwill acquired with the Sound One acquisition.

       Interest expense increased $487 or 64.76% primarily due to the Sound One
       acquisition financing.

       Net equipment lease expense increased $115 primarily as a result of the
       sale/leaseback to the Company's financial institution of certain
       equipment in December 1998.

       Net other expense increased $1,054 due to costs incurred in the current
       quarter in connection with the Liberty Media Corporation merger ($250)
       and to the reduction of expenses in connection with the Company's
       development projects reported in the prior period. The Company expects to
       incur additional costs in connection with the Liberty merger.

       As a result of the above, income before taxes decreased $1,847 from
       $1,262 to a loss before taxes of $585 and net income decreased $1,340
       from $897 to a net loss of $443.

       MATERIAL CHANGES IN CASH FLOWS

       For the six months ended February 29, 2000, the Company generated $650 in
       cash from operating activities compared to $5,865 in 1999. Net income of
       $565 adjusted for depreciation and net amortization of $6,926 provided
       cash of $7,491 in 2000 compared to $8,213 in 1999. Trade receivables
       increased $4,659 in 2000 compared to $2,824 in 1999. Decreases in
       accounts payable and other liabilities were $1,789 in 2000 compared to an
       increase of $258 in 1999. Cash provided by operations supplemented by
       borrowings from the Company's credit facility were used to pay down
       accounts payable and other liabilities and to fund trade receivables in
       2000 and cash provided by operations was utilized primarily to fund
       capital expenditures in 1999.

       Borrowings from the Company's credit facility of $4,848 supplemented by
       net cash generated from the sale of marketable securities, other assets
       and the cash proceeds from issuing common stock totalling $3,709 were
       also used to acquire a 50% interest in a Barcelona-based sound facility
       named 103 Estudio, S.L. for $2,084 and to reinvest in capital assets of
       the Company.

       FORWARD LOOKING STATEMENTS

       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, the failure of the company 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.

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                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

        The Company is involved in litigation and similar claims incidental to
        the conduct of its business. None of the pending actions is likely to
        have a material adverse impact on the Company's financial position or
        results of operations.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

        (a).        (1)      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.

                                        THE TODD-AO CORPORATION



     APRIL 14, 2000                         /s/  Silas R. Cross
---------------------                   ----------------------------------
            Date                                 Silas R. Cross
                                              Chief Accounting Officer

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