Liberty Media Group Reports First Quarter Results

May 20, 1999, 01:00 ET from Liberty Media Group

    ENGLEWOOD, Colo., May 20 /PRNewswire/ -- Liberty Media Group
 (NYSE:   LMG.A, LMG.B) ("Liberty") today reported its financial results for the
 quarter ended March 31, 1999.  On March 9, 1999, AT&T Corp. ("AT&T") acquired
 Tele-Communications, Inc. ("TCI") by merger ("the AT&T Merger").  Also on
 March 9, 1999, the TCI Ventures Group ("TCI Ventures") and the Liberty Media
 Group of TCI were combined (the "Liberty/Ventures Combination").  Immediately
 prior to the closing of the AT&T Merger, in exchange for approximately
 $5.5 billion in cash, TCI Ventures transferred to TCI Group its interest in At
 Home Corporation, National Digital Television Center, Inc., Western Tele-
 Communications, Inc., and approximately 47 million shares of AT&T common stock
 (the "Asset Transfers").  Upon completion of the AT&T Merger and the
 Liberty/Ventures Combination, each share of TCI Liberty Media Group Series A
 and Series B Common Stock was exchanged on a one-for-one basis for shares of
 new Liberty Media Group Class A and Class B Common Stock which are tracking
 stocks of AT&T and which trade on the New York Stock Exchange under the
 symbols LMG.A and LMG.B.  Each share of TCI Ventures Group Series A and Series
 B Common Stock was exchanged for .52 of a share of the new Liberty Media Group
 Class A and Class B Common Stock.  The results of Liberty Media Group for
 quarter ended March 31, 1999 are included in the AT&T Form
 10-Q which was filed with the Securities and Exchange Commission on
 May 17, 1999.
     The selected unaudited results presented in this release assume that the
 Liberty/Ventures Combination and the Asset Transfers associated with the AT&T
 Merger were effective January 1, 1998.  A significant portion of Liberty's
 activities are conducted through its interests in public and non-public
 entities that are not consolidated subsidiaries.  These entities include:
     -- Time Warner Inc. ("Time Warner") (NYSE:   TWX)
     -- Sprint PCS Group ("Sprint PCS") (NYSE:   PCS)
     -- TV Guide, Inc. ("TV Guide") (Nasdaq:   TVGIA)
     -- USA Networks, Inc. ("USAI") (Nasdaq:   USAI)
     -- Telewest Communications plc ("Telewest") (Nasdaq:   TWSTY)
     -- General Instrument Corporation ("GI") (NYSE:   GIC)
     -- Flextech p.l.c. (LN: FLXT) ("Flextech")
     -- Antec Corporation (Nasdaq:   ANTC)
     -- Discovery Communications, Inc. ("DCI")
     -- QVC, Inc. ("QVC")
     -- Liberty's various interests in non-public international cable
        distribution and programming businesses
     -- BET Holdings II, Inc. ("BET")
     -- Telemundo Network Group, LLC ("Telemundo Network")
     -- Courtroom Television Network
     -- Odyssey Channel
     -- E! Entertainment Television, Inc.
     -- News Corporation Limited ("News Corp.") (NSYE: NWS.A) (pro forma for
        the transactions between Liberty and News Corp. ("the News Corp.
        Transactions") discussed below)
     As the combined results do not include the results of the above
 non-consolidated entities, except, in certain cases, as they affect Liberty's
 interest in the earnings of affiliates, Liberty's combined statements of
 operations are not necessarily indicative of the underlying results of all the
 businesses in which Liberty owns an economic interest.  As a supplement to the
 attached combined statements of operations, the following is a presentation of
 certain financial results of:
     -- Encore Media Group, LLC ("EMG"), which is a wholly owned subsidiary of
        Liberty and is not publicly traded;
     -- the largest of Liberty's affiliated companies that are not publicly
        traded (DCI and QVC);
     -- The assets of Liberty Media International, Inc. ("LMI" and formerly,
        Tele-Communications International, Inc. or TINTA) that are publicly
        traded.  LMI's attributed pro forma operating results are presented as
        though LMI's percentage ownership in each of its underlying non-public
        assets was held constant for all of the periods at the level in effect
        as of March 31, 1999.
     Transactions between Liberty and News Corp.
     1. News Corp. has agreed to acquire Liberty's 50% interest in Liberty's
        domestic sports businesses ("Fox/Liberty Sports") in exchange for
        approximately 51.8 million shares of non-voting News Corp American
        Depository Receipts ("ADRs") (NYSE:   NWS.A; ASX: NCPDP).
     2. Liberty has agreed to acquire an additional 28.1 million non-voting
        ADRs from News Corp. for $695 million (or approximately $24.73 per
     Both transactions are expected to close by the end of June upon
 fulfillment of certain customary conditions, including regulatory and
 shareholder approvals.  There can be no assurance that such approvals will be
 obtained or that the transactions will be consummated.  Assuming both
 transactions are consummated, Liberty will own approximately 79.9 million
 non-voting ADRs, or 8% of News Corp.'s diluted outstanding shares.  Because of
 the expected completion of these transactions, the attributed operating
 results of Fox/Liberty Sports are excluded from this presentation.
     Liberty's economic percentage ownership interest is provided for each
 company, so that Liberty's attributed interest in certain financial results
 for such selected affiliate can be calculated by multiplying each company's
 operating results by Liberty's economic percentage ownership interest.
     NOTE:  The following selected unaudited affiliate operating results and
 aggregate attributed results were not prepared in accordance with generally
 accepted accounting principles, and are intended solely to provide additional
 information to investors.  They should be reviewed in conjunction with
 Liberty's combined financial statements included in the AT&T Form 10-Q
 referenced above.  Liberty's economic interest in its equity affiliates does
 not necessarily represent control of such entities.  Accordingly, Liberty
 could not, among other things, cause any non-controlled affiliate to
 distribute to Liberty its attributed share of the revenue or earnings of such
     The following tables and comments compare operating results for the three
 months ending March 31, 1999 to the same period for 1998, unless otherwise
     Liberty owned 100% of EMG at March 31, 1999.  The principal services of
 EMG are the STARZ!, Encore and Thematic Multiplex premium movie services.
                                            Encore Media Group
                                         Summary Operating Results
                                              Q1 99     Q1 98
                                           amounts in millions
     Revenue                                   $153       122
     Operating expense                           98        97
       Cash flow                                $55        25
       Outstanding debt                        $260       288
     -- EMG revenue and operating income before depreciation, amortization
        and stock compensation ("cash flow") increased by 25% and 120%,
        respectively, because of increases in revenue from all forms of
        distribution combined with a 1% increase in operating expenses.
                                            Encore Media Group
                                   Revenue and Subscription Unit Trends
                                              Q1 99     Q1 98
                                           amounts in millions
       From AT&T Broadband                      $63        54
       Cable affiliates other
        than AT&T Broadband                      31        23
       Satellite providers and other             59        45
         Total revenue                         $153       122
     Subscription units:
       STARZ!                                   9.2       7.6
       Encore                                  13.2      11.4
       MOVIEplex                                7.4       9.5
       Thematic Multiplex                      19.8      12.3
         Total subscription units              49.6      40.8
     -- Revenue from AT&T Broadband increased pursuant to the terms of the
        AT&T/EMG affiliation agreement.  Under this agreement, the amount paid
        by AT&T Broadband does not vary with the number of EMG subscription
        units from AT&T Broadband.  However, the payment from AT&T Broadband is
        adjusted, in certain instances, if AT&T acquires or disposes of cable
        systems.  This category also includes revenue from cable systems that
        have been contributed by AT&T to joint ventures and are subject to the
        AT&T/EMG affiliation agreement.
     -- Revenue from cable affiliates other than AT&T Broadband increased by
        35% mainly due to 31% and 53% increases in subscription units for
        Encore and STARZ! services, respectively, combined with increases in
        rates charged.  MOVIEplex subscribers from cable affiliates other than
        AT&T Broadband increased by 1.8 million or 77%, contributing to the
        increase in revenue.
     -- Revenue from satellite providers and other distribution technologies
        increased by 31% due to 27%, 20% and 34% increases in STARZ!, Encore
        and Thematic Multiplex subscription units, respectively, combined with
        rate increases.
     -- Programming and operating expenses were comparable to the same period
        last year.
     -- Sales and marketing expenses increased by 5% because of an increase in
        spending on affiliate marketing efforts.  EMG's national consumer
        awareness campaign is scheduled for the second and third quarters of
        1999; therefore, operating expenses are expected to be substantially
        higher during these quarters in 1999.  The "New Encore" campaign will
        brand Encore as a full first-run premium pay service.
     Liberty owned approximately 49.3% of DCI as of March 31, 1999.  The
 following results include the pro forma effect of DCI's acquisition of the
 remaining 30% interest in Travel Channel in February 1999 exclude the results
 of YCTV due to the discontinuance of YCTV operations at the end of 1998, as if
 these events occurred on January 1, 1998.
     The equity in the assets included in the British Broadcasting Corporation
 ("BBC")/DCI joint venture is held 50/50 by DCI and BBC, with the exception of
 Animal Planet (US), which is held 60% by DCI, 20% by BBC, 10% by Liberty and
 10% by the other investors in DCI.  However, until such assets reach breakeven
 (including the recoupment of prior losses) 100% of the economic interest will
 be attributed to DCI.  After breakeven, the economic interests will match the
 equity interests.  Except as described above, the results are presented at
 DCI's attributed economic interest in its assets.
                                        Discovery Communications, Inc.
                                     Pro Forma Summary Operating Results
                                              Q1 99     Q1 98
                                            amounts in millions
     Developed Assets
       Developed Domestic Networks             $197       154
       Developed International Networks          29        26
         Total Developed Assets                 226       180
     Developing Assets *                         72        48
         Total revenue                          298       228
     Operating expense:
     Developed Assets
       Developed Domestic Networks               96        83
       Developed International Networks          27        19
         Total Developed Assets                 123       102
     Developing Assets *                        142       100
         Total operating expense                265       202
     Cash flow (deficit):
     Developed Assets
       Developed Domestic Networks              101        71
       Developed International Networks           2         7
         Total Developed Assets                 103        78
     Developing Assets *                        (70)      (52)
         Total cash flow                        $33        26
         Outstanding debt                    $1,166       724
     * Includes I/C eliminations & 100% of Travel Channel.
                                       Discovery Communications, Inc.
                                     Selected Statistical Information
                                               Q1 99 to Q1 98
                                                 % increase
     Average quarter-end subscribers:
       Discovery Channel ("DSC")                      4%
       The Learning Channel ("TLC")                   8%
       Animal Planet ("APL")                         36%
     Average total day rating:
       DSC                                            1%
       TLC                                            5%
       APL                                            9%
     Average prime-time rating:
       DSC                                            0%
       TLC                                            3%
       APL                                           29%
     Average prime-time audience delivery (25-54):
       DSC                                            4%
       TLC                                           13%
       APL                                           59%
     DCI's Program Library business unit, which licensed its acquired and
 originally produced programming to third parties as well as to other DCI
 networks, was discontinued, for reporting purposes, effective at the beginning
 of 1999.  Revenues and expenses previously credited and charged to this unit
 are now allocated directly to the networks that use or exploit acquired and
 originally produced programming.  As a result of this change in reporting,
 operating expense and cash flow of certain networks, primarily Developed
 International Networks, are expected to be adversely impacted in 1999.
     -- Revenue from Developed Domestic Networks increased by 28%.  These
        increases resulted from growth in affiliate and advertising revenue at
        both DSC and TLC.
     -- Advertising revenue increased by 34% because of the increase in
        subscribers combined with an increase in advertising spot rates,
        ratings, ad inventory sellout and audience delivery.
     -- Affiliate revenue increased by 18% due to increases in the number of
        subscribers receiving the services combined with an increase in average
        per subscriber affiliate fees.
     -- Cash flow from Developed Domestic Networks increased by 42%, which
        resulted from the 28% increase in revenue offset by a 16% increase in
        operating expense.  The increase in operating expense was due primarily
        to increases in revenue-related costs and programming costs.
     -- Developed International Networks includes the DSC-Europe and DSC-Latin
        America networks.  Revenue from Developed International Networks
        increased by 12%.  This increase was primarily due to a 16% increase in
        advertising revenue and a 6% increase in affiliate revenue.  The
        advertising revenue increase was due to subscriber growth combined with
        increases in advertising rates.  The increase in affiliate revenue was
        the result of a 14% increase in subscribers offset by lower average per
        subscriber rates.  The lower average per subscriber rates resulted from
        Eastern European subscribers, which have a lower per subscriber rate,
        representing a greater percentage of total DSC-Europe subscribers
        compared to last year.
     -- Cash flow from Developed International Networks decreased 71% primarily
        due to the 12% increase in revenue offset by a 42% increase in
        operating expense associated with programming and marketing costs.
        Over 50% of the increase in Developed International Networks'
        programming expense in 1999 was due to the aforementioned
        discontinuance of the Program Library business unit.  The increase in
        marketing costs was primarily due to the timing of DSC-Europe's 1999
        consumer campaign.
     The principal components of DCI's developing assets include new domestic
 networks, developing international networks, BBC/DCI joint venture networks,
 retail operations and other enterprises.
     -- New domestic networks include the following:  Animal Planet (US),
        Travel Channel, Discovery Science Channel, Discovery Civilization
        Channel, Discovery Home & Leisure Channel, Discovery Kids Channel,
        Discovery Health Channel and Discovery Wings Channel.  On
        December 29, 1998, DCI acquired 100% of the CBS Eye on People cable
        network (with approximately 11 million cable and satellite
        subscribers).  On January 11, 1999, the new network was renamed
        Discovery People.
     -- Developing International Networks include Discovery networks in the
        following areas:  Asia, India, Germany, Italy/Africa, Canada, Japan,
        Turkey and Kids-Latin America.
     -- The BBC/DCI joint venture has three principal components: global
        network development, program production and distribution and the
        launch of BBC-America.  The joint venture networks include the
        following:  Animal Planet Europe, Animal Planet Asia, Animal Planet
        Latin America, People & Arts Latin America, People & Arts Iberia and a
        portion of Animal Planet (US).  For purposes of the following
        discussion, references to BBC/DCI joint venture networks do not include
        Animal Planet (US), which is discussed separately.
     -- Currently, DCI's retail operations consist of 70 The Nature Company
        stores ("TNC Stores"), 38 Discovery Channel Stores, nine additional
        Discovery Channel Stores that were closed for conversion and one
        Discovery Destination flagship store which is housed in the MCI Center
        in Washington D.C.
     -- The 50% increase in Developing Asset revenue was primarily attributable
        to Animal Planet, Travel Channel, developing international networks and
        BBC/DCI joint venture networks.
     -- Animal Planet, which launched in October 1996, ended the first quarter
        of 1999 with approximately 48 million subscribers.  Animal Planet
        revenue increased by 120% to $17 million which was due primarily to a
        115% increase in advertising revenue resulting from increases in
        advertising spot rates, ratings, ad inventory sellout and audience
        delivery.  Affiliate fees increased by 132% primarily due to the
        increase in subscribers combined with an increase in the number of
        paying Animal Planet subscribers (in certain instances, affiliates
        pay no affiliation fee upon launching the service as part of the launch
        incentive).  Animal Planet's cash flow deficit improved by $4 million
        or 95%.  This improvement resulted mainly from the strong revenue
        growth offset by significant investments in marketing, programming and
        on-air look.
     -- Travel Channel, which was re-launched by DCI in 1998, ended the first
        quarter of 1999 with over 28.6 million subscribers representing an
        increase of over 50%.  Travel Channel revenue increased by 117% to
        $7 million.  The increase in revenue resulted primarily from an
        increase in advertising revenue that was caused by increases in
        advertising rates, ratings and audience delivery.  Travel Channel's
        cash flow deficit grew by $5 million because of significant investments
        in marketing, programming and personnel offset by the strong
        advertising revenue growth.
     -- BBC/DCI joint venture networks reach over 20.4 million aggregate
        subscribers.  First quarter revenue increased by $7 million or 246%.
        The cash flow deficit increased by $8 million or 100% primarily because
        the strong revenue growth was offset by increases in costs associated
        with programming, marketing and personnel as well as the launch of
        Animal Planet-Asia subsequent to the first quarter of 1998.
     -- DCI's retail stores' revenue decreased by $1 million or 4% due to the
        temporary closing of stores while TNC Stores were converted to
        Discovery Channel branded stores.  Approximately 8% fewer stores were
        open during the first quarter of 1999 due to conversions and permanent
        store closures during the period.  DCI's retail stores' cash flow
        deficit increased by $3 million or 23% primarily because of the loss of
        revenue and costs associated with the conversion of TNC stores to
        Discovery-branded stores.  As of March 1999, 25 converted stores had
        been opened.
     -- DCI's outstanding debt increased by $153 million and $442 million
        compared to December 31, 1998 and March 31, 1998, respectively,
        primarily due to the funding of developing asset businesses combined
        with payments made in support of the launch of Animal Planet, Travel
        Channel and the digital services.  These payments were capitalized as
        subscriber acquisition costs and are amortized over a 10-year period.
     QVC, INC.
     Liberty owned 42.6% of QVC as of March 31, 1999.  The following table
 includes operating results of QVC for the quarter ended March 31, 1999 as
 reported in Comcast Corporation's May 10, 1999 press release.  Please see such
 press release for additional information.
                                         Summary Operating Results
                                              Q1 99     Q1 98
                                           amounts in millions
     Revenue                                   $650       545
     Operating expense                          519       450
       Cash flow                               $131        95
     Outstanding debt                          $672       832
     -- QVC's revenue and cash flow increased by 19% and 38%, respectively.
        These increases were due primarily to an increase in the average number
        of homes receiving QVC services in the U.S., U.K. and Germany combined
        with increases in sales per home for QVC's core U.S. service and
        international services in the U.K. and Germany.
     -- QVC's results reflect the electronic retailer's expansion into
        international markets, including strong growth in the U.K. market,
        offset by upfront costs associated with the launch of the QVC service
        in Germany.  Excluding the impact of the German operations, QVC's
        revenue and cash flow in the quarters ended March 31, 1999 and 1998
        would have been $630 million and $135 million and $537 million and
        $101 million, respectively.
     Liberty Media International, Inc. ("LMI") (non-public assets only)
     -- Liberty owns 100% of LMI, which owns and operates programming services
        and communications networks outside the continental United States.  Its
        primary operations are located in the United Kingdom, Continental
        Europe, Argentina and Japan.  The table below reflects LMI's attributed
        pro forma operating results of assets other than Telewest and Flextech
        (which are publicly traded), presented as though LMI's percentage
        ownership in each of its underlying assets was held constant for all of
        the periods presented at the level in effect as of March 31, 1999.
                                    Liberty Media International, Inc.
                                             Non-Public Assets
                                    Summary Pro Forma Operating Results
                                              Q1 99     Q1 98
                                           amounts in millions
     Developed Assets                          $100        98
     Developing Assets                           27        19
         Total Revenue                          127       117
     Operating Expense:
     Developed Assets                            70        67
     Developing Assets                           43        35
         Total Operating Expense                113       102
     Cash Flow (Deficit):
     Developed Assets                            30        31
     Developing Assets                          (16)      (16)
         Total Cash flow (deficit)              $14        15
           Outstanding debt                    $527       464
     Developed LMI Assets:
     -- Developed LMI Assets include interests in Cablevision S.A.
        ("Cablevision") (LMI owns 28%), Pramer S.C.A. ("Pramer") (LMI owns
        100%), TCI Cablevision of Puerto Rico, Inc. ("Puerto Rico") (LMI
        owns 100%) and other Latin American and European distribution and
        programming assets.  Developed LMI revenue and cash flow remained
        relatively comparable.
     -- Puerto Rico revenue decreased to $8 million (a decrease of 30%), and
        cash flow decreased to $3 million (a decrease of 43%) due to damages
        sustained from Hurricane Georges which struck in the fall of 1998.  As
        a result of such damages, cable subscriber levels decreased by 14% to
        approximately 96,000 subscribers.  To date, Puerto Rico's plant has
        been substantially rebuilt, and substantially all of the rebuild costs
        are covered by insurance proceeds.  Puerto Rico's revenue loss was
        substantially offset by revenue gains in LMI's Latin America
        programming operations.  The decrease in Puerto Rico's cash flow was in
        turn offset by cash flow gains at Cablevision due to decreased
        programming costs and operating efficiencies from acquisitions in 1998.
     Developing LMI Assets:
     -- Developing LMI Assets include Jupiter Telecommunications Co., Ltd
        ("J-COM") (LMI owns 40%), Jupiter Programming Co., Ltd. ("JPC")
        (LMI owns 50%), non-French operations of MultiThematiques, S.A. ("MTh")
        (LMI owns 30%)  and other international programming partnerships.
        Developing LMI Assets revenue increased by 42% while the cash flow
        deficit remained the same.
     -- On an LMI attributed basis, J-COM and JPC's revenues were $7 million
        and $9 million, increases of 69% and 123%, respectively.  J-COM's
        growth was driven by 43% growth in managed subscriber and an 11%
        increase in revenue per subscriber.  JPC's shopping channel revenues
        increased 144% to $15 million while the remaining channels experienced
        moderate revenue gains due primarily to subscriber growth.  However,
        J-COM and JPC cash flow was approximately the same in both periods due
        to heavy programming start-up costs (particularly sports related
        programming), and increased costs at J-COM, which is still in the early
        phases of cable build.
     The following are aggregate attributed operating results for Liberty's
 privately-held assets.  The attributed statements of operations represent the
 aggregation of (i) Liberty's economic percentage ownership interest in each of
 its non-publicly traded affiliates that is accounted for either as a
 consolidated subsidiary or as an equity affiliate as of the end of each period
 multiplied by (ii) the individual revenue, operating expense and cash flow of
 the respective affiliate.  Investments accounted for under the cost method and
 investments that are publicly traded are excluded from the statements.
 Because of acquisitions and other transactional activity, the results are
 presented on a pro forma basis taking into account, among other transactions,
 the Asset Transfers, Liberty/Ventures Combination, News Corp. Transactions and
 various LMI transactions, as if the transactions occurred on January 1, 1998.
                                           Liberty Media Group
                               Pro Forma Attributed Statement of Operations
                                             Non-Public Assets
                                              Q1 99     Q1 98
                                           amounts in millions
     Encore Media Group                        $153       122
     Discovery Communications, Inc.             147       112
     QVC                                        277       232
     LMI (Non-publicly Traded)                  127       118
     Other (Non-publicly Traded)                 42        28
         Total attributed revenue               746       612
     Operating expenses
     Encore Media Group                          98        97
     Discovery Communications, Inc.             131       100
     QVC                                        221       192
     LMI (Non-publicly Traded)                  113       103
     Other (Non-publicly Traded)                 62        30
         Total attributed operating expenses    625       522
     Cash flow (deficit)
     Encore Media Group                          55        25
     Discovery Communications, Inc.              16        12
     QVC                                         56        40
     LMI (Non-publicly Traded)                   14        15
     Other (Non-publicly Traded)                (20)       (2)
         Total attributed cash flow            $121        90
     -- During the quarter ended March 31, 1999, the pro forma aggregate
        attributed cash flow of non-public entities that produced positive cash
        flow was $208 million compared to $147 million during the same period
        in 1998.  Pro forma aggregate attributed cash flow deficits of
        non-public entities that produced cash flow deficits equaled
        $87 million compared to $57 million during the same period in 1998.
     -- Cash flow deficit of other (Non-Publicly Traded) assets increased by
        $18 million primarily because of nonrecurring Liberty Corporate costs
        associated with the AT&T Merger and cash flow deficits at Telemundo
        Network (which was acquired in August of 1998).  Excluding these costs,
        the pro forma aggregate attributed cash flow would have been
        $141 million, an increase of 57%, compared to the same period in 1998.
     Total pro forma attributed outstanding debt of non-publicly traded
 companies equaled $4,244 million as of March 31, 1999 (including outstanding
 Liberty corporate debt of $1,689 million) compared to $2,349 million (on a pro
 forma  basis) as of March 31, 1998 (including outstanding Liberty corporate
 debt of $255).  For both periods, outstanding Liberty corporate debt excludes
 the $345 million of LMI's 4 / percent convertible subordinated debentures
 ("LMI Debentures") due February 15, 2006 that were redeemed on April 8, 1999.
 Liberty's corporate cash balance was approximately $5,100 million as of
 March 31, 1999 (excluding the cash effects of the News Corp. Transactions
 ($695 million), which are expected to close at the end of the second quarter
 of 1999 and the purchase of additional GI shares ($280 million) on
 April 5, 1999).
     A significant portion of the increase in attributed outstanding debt
 resulted from increased outstanding debt at DCI, BET, LMI and Liberty
 corporate.  The increase in outstanding Liberty corporate debt was primarily
 attributable to the following transactions:
     -- During August 1998, Liberty invested approximately $110 million to
        purchase its interests in  the Telemundo station and network groups.
        Liberty owns 25% and 50% of the equity in Telemundo's station and
        network groups, respectively.
     -- During August 1998, Liberty acquired approximately 7.6 million shares
        of TCI Music Series A Common Stock ("TCI Music Shares") at $8 per share
        pursuant to the exercise by certain TCI Music shareholders of put
        rights associated with certain TCI Music Shares.
     -- During the second and third quarters of 1998, Liberty acquired, at a
        per share price of $20, securities convertible into approximately
        27.6 million shares of USAI common stock in connection with the
        formation of USAI and the exercise of certain pre-emptive rights.
     -- During 1998, Liberty invested approximately $100 million in Fox/Liberty
        Sports to help fund Fox/Liberty Sports' investments in the Outdoor Life
        and Speedvision cable networks and in the Staples Center entertainment
        complex in Los Angeles.
     -- During the second and third quarters of 1998, Liberty contributed
        approximately $137 million to the Sprint PCS venture to fund capital
     -- During the third quarter of 1998, LMI subscribed to 84,688,960 Telewest
        ordinary shares (8,468,896 ADRs) at an aggregate cost of $133 million.
     -- During the third quarter of 1998, LMI acquired 100% of Pramer SCA for
        $32 million in cash plus the issuance of $54 million of notes payable.
     -- During the fourth quarter of 1998, LMI contributed approximately
        $43 million related to Cablevision's debt restructuring.
                     (in millions)       Share   (in millions)
     Ticker           Shares Held        Price       Market         Economic
     Symbol            5/14/99 (a)     5/14/99        Value         Ownership
     TWX                114.124        $73.75        $8,417            9%
     TUNE               203.213         43.00         8,738           94% (b)
     PCS                 98.564         47.31         4,663           24% (c)
     TVGIA               66.534         42.88         2,853           44%
     USAI                69.118         37.50         2,592           21%
     NWS.A               79.886         31.75         2,536            8% (d)
     TWSTY               46.344         45.75         2,120           22%
     GIC                 31.356         43.13         1,352           18% (e)
     FLXT                57.889         15.06           872           37%
     ANTC                 6.828         32.56           222           19%
     (a) Represents common share equivalents, assuming all applicable
         conversions and exchanges.
     (b) Includes 128.8 million additional shares of TCI Music Series B common
         stock that Liberty would receive in exchange for Liberty's
         contribution of substantially all of its internet and interactive
         television assets, including those held by its wholly owned subsidiary
         Liberty Digital, to TCI Music.
     (c) Excludes 6.3 million warrants exercisable at $24.02 per share that
         expire 11/13/03 and preferred convertible shares that convert into
         4.0 million common share equivalents.
     (d) Represents non-voting ADRs to be acquired from News Corp. for
         Liberty's 50% interest in Fox/Liberty Sports and $695 million at an
         average cost per share of $26.54.
     (e) Includes 10 million shares acquired at $28 per share on April 5, 1999
         but excludes warrants to purchase 21.4 million additional shares of GI
         common stock at $14.25 per share, subject to certain vesting
     Stock Repurchase Program/Outstanding Shares
     During the first quarter of 1999, no shares were repurchased.  At
 March 31, 1999, there were approximately 659.7 million shares of Liberty Media
 Group Class A Common Stock ("LMG.A") and Liberty Media Group Class B Common
 Stock ("LMG.B") outstanding and reserved for issuance pursuant to convertible
 securities and options.  The aggregate amount payable to exercise outstanding
 options to purchase LMG.A and LMG.B shares was approximately $924 million as
 of March 31, 1999.
     Redemption of LMI Debentures
     On April 8, 1999, substantially all of the LMI debentures were converted
 into LMG.A shares at a conversion price of $47.07, or 21.24 shares per
 $1,000 principal amount.  Since substantially all of the debenture holders
 elected to convert, no payment of interest and no adjustment in respect to
 interest was made.  Conversion of the debentures resulted in the issuance of
 approximately 7.3 million shares of LMG.A (with no change in fully diluted
     Liberty Media Group Class A and Class B Common Stock are traded on the New
 York Stock Exchange under symbols LMG.A and LMG.B, respectively.
                               "LIBERTY MEDIA GROUP"
                         (a combination of certain assets)
                              Combined Balance Sheets
                                               New Liberty    Old Liberty
                                                March 31,     December 31,
                                                  1999             1998
     Assets                                         amounts in millions
     Current assets:
       Cash and cash equivalents                  $1,973            407
       Marketable securities                       3,217            124
       Trade and other receivables, net              135            185
       Prepaid expenses and committed
        program rights                               287            263
         Total current assets                      5,612            979
     Investments in affiliates, accounted
      for under the equity method, and
      related receivables                         17,093          3,079
     Investment in Time Warner, Inc.               8,072          7,083
     Investment in AT&T Corp.                         --          3,556
     Investment in Sprint Corporation              4,663          2,446
     Other investments and related
      receivables                                  1,844          1,298
     Property and equipment, at cost                 127            935
       Less accumulated depreciation                   2            350
                                                     125            585
     Intangible assets                            10,325          1,139
       Less accumulated amortization                  43            164
                                                  10,282            975
     Other assets, at cost, net of
      accumulated amortization                       940            347
         Total assets                            $48,631         20,348
     Liabilities and Combined Equity
     Current liabilities:
       Accounts payable and accrued
        liabilities                                 $141            416
       Program rights payable                        178            156
       Current portion of debt                       652            578
         Total current liabilities                   971          1,150
     Debt                                          1,843          2,318
     Deferred income taxes                        10,525          4,458
     Other liabilities                               712            549
         Total liabilities                        14,051          8,475
     Minority interests in equity of
      attributed subsidiaries                         39            545
     Obligation to redeem common stock                 9             17
     Combined equity:
       Combined equity                            33,505          6,896
       Accumulated other comprehensive
        earnings, net of taxes                       906          3,718
                                                  34,411         10,614
       Due to related parties                        121            697
         Total combined equity                    34,532         11,311
     Commitments and contingencies
         Total liabilities and combined
          equity                                 $48,631         20,348
                               "LIBERTY MEDIA GROUP"
                         (a combination of certain assets)
            Combined Statements of Operations and Comprehensive Earnings
                                    New Liberty            Old Liberty
                                     One month      Two months    Three months
                                       ended           ended           ended
                                     March 31,      February 28,    March 31,
                                        1999            1999            1998
                                               amounts in millions
     Revenue                            $71             282             351
     Operating costs and expenses:
       Operating, selling, general
        and administrative               56             227             302
       Stock compensation               (41)            183             158
       Depreciation and amortization     53              47              54
                                         68             457             514
         Operating income (loss)          3            (175)           (163)
     Other income (expense):
       Interest expense                 (13)            (28)            (18)
       Dividend and interest income      24              12              17
       Share of losses of
        affiliates, net                 (80)            (66)           (257)
       Minority interests in losses
        of attributed subsidiaries       --               4              13
       Gain on dispositions, net         --              14             552
       Gains on issuance of equity
        by subsidiaries                  --             389              38
       Other, net                        --              --               2
                                        (69)            325             347
         Earnings (loss) before
          income taxes                  (66)            150             184
     Income tax benefit (expense)         8            (209)            (76)
         Net earnings (loss)           $(58)            (59)            108
     Other comprehensive earnings,
      net of taxes:
       Foreign currency translation
        adjustments                      12             (15)              1
       Unrealized holding gains
        arising during the period,
        net of reclassification
        adjustments                     894             971             348
       Other comprehensive earnings     906             956             349
     Comprehensive earnings            $848             897             457

SOURCE Liberty Media Group