As the attached Combined Statements of Operations and Comprehensive

Earnings do not include the results of the above non-consolidated entities,

except, in certain cases, as they affect Liberty’s interest in the earnings or

losses of affiliates, such combined statements 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 and comprehensive earnings, the following is a presentation of

operating results for Liberty’s privately held assets including:

Liberty’s Corporate Cash and Liquid Investments and Corporate Debt

balances increased compared to December 31, 2000 due primarily to proceeds

from the issuances during the first quarter of 2001 of the Motorola 3.5%

Senior Exchangeable Debentures due 2031 and the Viacom 3.25% Senior

Exchangeable Debentures due 2031. These increases were offset primarily by

other investment activity.

Starz Encore Developed revenue and cash flow increased by 19% and 22%,

respectively. Operating expense increased by 17%. Total subscription

units increased by 54% due to a 17% increase in STARZ! units and a

68% increase in Encore/Thematic Multiplex units, respectively.

The increase in revenue was due to increases in subscription units from

all forms of distribution. Subscription units grew at a faster rate

than revenue primarily due to the following: (1) AT&T units, which

represent 20% of total units, increased by 32% and are covered by the

AT&T Broadband contract discussed below; and (2) contractual incentives

associated with growth in Encore and Thematic Multiplex distribution.

Under its affiliation agreement with AT&T Broadband, Starz Encore

receives fixed monthly payments in exchange for unlimited access to all

of the existing Encore and STARZ! services through 2022. The amount of

the payments is adjusted under certain circumstances in the event of

acquisitions and dispositions.

As a result of AT&T’s acquisition of MediaOne Group, Inc., the contracted payment amount increased by approximately 20% as of June 15, 2000. After adjusting for the elimination of the former MediaOne contract, the net payment amount from the combined AT&T companies increased by approximately 10%.

The 17% increase in operating expense was primarily due to an increase in affiliate marketing support, national branding and programming license fees related to improved performance at the box office of output product played during the first quarter of 2001 compared to last year.