Important Notice: Liberty Media Corporation ("Liberty") (NYSE: L,
LMCB) CEO, John Malone, and President, Robert Bennett, will discuss
Liberty's earnings release in a conference call which will begin at
11:00 a.m. (ET) August 5, 2005. The call can be accessed by dialing
(913) 981-4901 or (800) 811-0667 at least 10 minutes prior to the
start time. Replays of the conference call can be accessed from
2:00 p.m. (ET) on August 5, 2005 through 5:00 p.m. (ET) August 12,
2005, by dialing (719) 457-0820 or (888) 203-1112 plus the pass
code 8048426#. The call will also be broadcast live across the
Internet. To access the web cast go to
http://www.libertymedia.com/investor_relations/default.htm. Links
to this press release will also be available on the Liberty Media
web site. ENGLEWOOD, Colo., Aug. 4 /PRNewswire-FirstCall/ -- On
August 5, 2005, Liberty will file its Form 10-Q with the Securities
and Exchange Commission for the three months ended June 30, 2005.
The following release is being provided to supplement the
information provided to investors in Liberty's Form 10-Q as filed
with the SEC. Liberty is a holding company which, through its
ownership of interests in subsidiaries and other companies, is
primarily engaged in the electronic retailing, media,
communications and entertainment industries. In 2004, Liberty had
organized its businesses into three groups -- Interactive Group,
Networks Group and Corporate and Other. On July 21, 2005, Liberty
spun off its newly formed subsidiary, Discovery Holding Company
(DHC). DHC's assets are comprised of Liberty's 100% ownership
interest in Ascent Media Group, Inc., which was included in its
Interactive Group, its 50% ownership interest in Discovery
Communications, Inc. (DCI), which was included in its Networks
Group and $200 million in cash. After completion of this spin off,
Liberty now operates and analyzes its businesses individually,
rather than combining them with other businesses into groups. As a
supplement to Liberty's consolidated statements of operations, the
following is a presentation of financial information on a
stand-alone basis for the following privately held assets owned by
or in which Liberty held an interest at June 30, 2005: * QVC, Inc.,
a consolidated, 98.5% owned subsidiary; * Starz Entertainment Group
LLC (SEG), a consolidated, wholly-owned subsidiary; and * DCI, a
privately held equity affiliate included among the assets spun off
with DHC. Unless otherwise noted, the following discussion compares
financial information for the three months ended June 30, 2005 to
the same period in 2004. Please see page 9 of this press release
for the definition of operating cash flow and a discussion of
management's use of this performance measure. Schedule 1 to this
press release provides a reconciliation of Liberty's consolidated
segment operating cash flow for its operating segments to
consolidated earnings from continuing operations before income
taxes and minority interests. Schedule 2 to this press release
provides a reconciliation of the operating cash flow for each
privately held asset presented herein to that asset's operating
income for the same period, as determined under GAAP. Certain prior
period amounts have been reclassified for comparability with the
2005 presentation. QVC QVC's revenue and operating cash flow
increased 15% and 17%, respectively. QVC's domestic revenue and
operating cash flow increased 11% and 12%, respectively. The
domestic revenue increase was primarily attributed to increased
sales to existing subscribers principally in the areas of apparel
and accessories. The domestic operations shipped approximately 26.4
million units during the quarter, an increase of 9%. The average
selling price increased 5% from $40.58 to $42.42. QVC.com sales as
a percentage of domestic sales grew from 14.9% in the second
quarter of 2004 to 17.5% in 2005. The domestic operating cash flow
margins increased 20 basis points from the prior period due to a
higher gross profit margin. The gross margin increased during the
quarter primarily due to a shift in the product mix from home to
higher margin apparel and accessories products and due to
improvements in warehouse and distribution operations. QVC's
international operations experienced positive results for the
quarter due to a combination of greater sales to existing
subscribers, new subscriber growth and favorable foreign currency
exchange rates. Revenue from international operations increased 24%
as a result of a strong performance from each of the international
divisions. Excluding the effect of exchange rates, international
revenue increased 20%. Primarily as a result of the sales increase,
operating cash flow of the international operations increased from
$57 million to $76 million, or 33%. While the gross profit margin
declined by approximately 30 basis points, the international cash
flow margin increased from 15.9% to 17.1% due to greater operating
leverage of fixed expenses. The decrease in gross margins was due
to changes in initial margins, product mix, and inventory
obsolescence methodology. Excluding the effect of exchange rates,
QVC's international operating cash flow increased 30%. Effective
May 20, 2005, QVC entered into a $2 billion bank credit facility.
The credit facility is comprised of an $800 million term loan that
was drawn at closing, an $800 million term loan that can be drawn
at any time before September 30, 2006, and a $400 million revolving
loan. All loans are due and payable on May 20, 2010. QVC's
outstanding debt balance was $800 million at June 30, 2005. SEG
SEG's revenue increased 8% to $258 million while operating cash
flow decreased 24% to $47 million. The increase in revenue was
primarily due to an increase of 15.1 million subscription units, or
9%, from the second quarter of 2004. While SEG experienced a 10%
increase in Thematic Multiplex subscription units, which have lower
subscription rates than other SEG services, SEG also saw increases
of 6% in both Starz and Encore units. The increases in subscription
units were due in part to increased participation with distributors
in national marketing campaigns in the second half of 2004,
increased digital penetration and other marketing strategies. SEG's
operating expenses increased 20%. The increases were due primarily
to higher programming costs, which increased from $133 million for
the three months ended June 30, 2004 to $167 million in 2005, and
increases in S,G&A expenses. The programming increases were due
to higher costs per title as a result of new rate cards for movie
titles under certain of its license agreements that were effective
for movies made available to SEG beginning in 2004. While the
higher rate card took effect at the beginning of 2004, programming
expense in the second quarter of 2004 also included the
amortization of programming costs related to movies under the lower
rate card in effect prior to 2004 as SEG's first run exhibition
window typically runs 15 to 18 months. Amortization of programming
costs under these lower rate cards was substantially complete at
the end of March 2005. An increase in the percentage of first-run
movie exhibitions utilized (which have a relatively higher cost per
title) as compared to the number of library product exhibitions
utilized in the second quarter of 2005 also contributed to higher
programming costs. S,G&A expenses increased primarily due to an
$8 million credit recorded by SEG in 2004 related to the recovery
of certain accounts receivable from Adelphia Communications. These
increases were partially offset by lower sales and marketing
expenses as national marketing campaigns in the second quarter of
2005 were scaled back compared to those during the same period in
2004. In the second quarter of 2005, SEG and Comcast renegotiated
their affiliation agreement. The new agreement eliminates Comcast's
packaging commitment for the Encore and Thematic Multiplex channels
(EMP) and provides for a fixed fee payment structure, with certain
CPI adjustments, for EMP through 2009. The agreement also provides
for a guaranteed payment structure for Comcast's carriage of Starz
through 2012 with contractual increases for 2006 and 2007 and
annual CPI adjustments for the remainder of the term. The foregoing
payment structure for EMP and Starz may be adjusted in the event
Comcast acquires or disposes of cable systems. Finally, Comcast has
agreed to the elimination of certain future marketing support
commitments from SEG. As a result of this new agreement, SEG's
future revenue from Comcast for its EMP and Starz products will not
be impacted by any increases or decreases in actual subscribers,
except in the case of acquisitions or dispositions noted above. The
terms of the EMP and Starz payment structures can be extended by
Comcast, at its option, for a total of six years and five years,
respectively. Discovery DCI's revenue of $660 million and operating
cash flow of $184 million are 12% and less than 1% ahead of the
same period a year ago, respectively. DCI's affiliated networks
reach more than 1.3 billion cumulative worldwide subscribers. U.S.
Networks revenue increased by 8% due to increases in affiliate
revenue. U.S. Networks had a 12% increase in paying subscribers
which, when combined with lower launch support amortization, led to
a 23% increase in net affiliate revenue. Lower launch support
amortization, a contra-revenue item, is the result of extensions to
certain affiliation agreements. Net advertising revenue was flat as
increases in CPM's were offset by lower ratings and audience
delivery at certain networks. Operating expenses increased 8% due
to increases in programming related expenses, partially offset by
sales related expenses. Operating cash flow increased by 9% to $183
million. International Networks revenue increased 23% due to
increases in both affiliate and advertising revenue and favorable
exchange rates. Net advertising revenue increased 28% driven by
audience impact growth in the UK combined with advertising revenue
generated by new channels launched in Europe. Net affiliate revenue
increased by 23% due to increases in paying subscription units in
Europe and Asia and international joint venture channels combined
with contractual rate increases in certain markets. Subscription
units increased 42% due to increases in nearly all regions.
Subscription units grew at a faster rate than revenue primarily due
to a disproportionate increase in subscribers in China which have
free carriage. Operating expenses increased 38% due to the
previously announced investment in its Lifestyles category designed
to highlight and strengthen that category. Operating cash flow
decreased 32% due to the increased expenses. Excluding the effects
of exchange rates, revenue increased 20% and operating cash flow
decreased 42%. Revenue in the Commerce, Education and Other
division increased by 27%, principally as a result of a 6% increase
in same store sales and a $3 million, or 59%, increase in revenue
at Discovery Education. Discovery Education revenue increased due
to acquisitions that were made over the past year and an increase
in the number of schools purchasing its products and services.
Operating cash flow decreased 25% primarily due to additional
expenses related to Discovery Education. DCI's outstanding debt
balance was $2.5 billion at June 30, 2005. Fair Value of Public
Holdings and Derivatives June 30, March 31, June 30, (amounts in
millions and include the value of derivatives) 2005 2005 2004 News
Corporation 8,374 8,689 8,401 InterActiveCorp 3,325 3,083 4,173 Non
Strategic Public Holdings 8,441 8,315 8,473 Cash and Debt The
following presentation is provided to separately identify cash and
liquid investments and debt information. June 30, March 31, June
30, (amounts in millions) 2005 2005 2004 Cash and Cash Related
Investments: Consolidated Cash (GAAP) $1,387 1,347 1,931
Consolidated Short-Term Investments (1) 6 4 38 Consolidated
Long-Term Marketable Securities (2) 109 240 380 Total Consolidated
Cash and Liquid Investments $1,502 1,591 2,349 Debt: Senior Notes
and Debentures (3) $4,833 5,895 6,998 Senior Exchangeable
Debentures (4) 4,588 4,588 4,628 Other 910 177 97 Total Debt
$10,331 10,660 11,723 Less: Unamortized Discount Attributable To
Call Option (2,246) (2,268) (2,363) Obligations Unamortized
Discount (18) (19) (22) Consolidated Debt (GAAP) $8,067 8,373 9,338
(1) Represents short-term marketable debt securities which are
included in other current assets in Liberty's consolidated balance
sheet. (2) Represents long-term marketable debt securities which
are included in investments in available-for-sale securities and
other cost investments in Liberty's consolidated balance sheet. (3)
Represents face amount of Senior Notes and Debentures with no
reduction for the unamortized discount. (4) Represents face amount
of Senior Exchangeable Debentures with no reduction for the
unamortized discount attributable to the embedded call option
obligation. Liberty's Total Consolidated Cash and Liquid
Investments decreased $89 million and Total Debt decreased by $329
million from March 31, 2005. The decrease in Total Debt was due to
the tender offer executed in April 2005, repayments of short term
borrowings, and repayments of corporate debt as part of the debt
reduction plan announced in the fourth quarter of 2003, offset
partially by borrowings against the QVC bank credit facility. Total
Consolidated Cash and Liquid Investments decreased as cash flow
from operations of Liberty's subsidiaries were more than offset by
the debt repayments and interest expense. 2005 OUTLOOK QVC -- 2005
Guidance Unchanged The following estimates assume primarily, among
other factors, that product mix, foreign currency exchange rates
and domestic growth rates are consistent with the first six months
of 2005, and international growth rates experience a slight
slowdown compared to prior years. For full year 2005 versus 2004,
QVC operating results are expected to increase as follows: *
Revenue by low double digits %. * Operating cash flow by mid teens
%. * Operating income by mid teens %. SEG -- 2005 Guidance
Unchanged The following estimates assume, among other factors, that
SEG continues to experience positive trends under its affiliation
agreements, SEG's distributors continue to see growth in digital
subscribers consistent with that experienced in 2004, the quantity
and the timing of receipt of output product from the studios does
not materially change from that experienced in 2004, and Starz
subscription units continue to increase. These estimates further
assume that SEG's 2005 programming costs increase between $100
million and $120 million over amounts expensed in 2004. For full
year 2005, SEG operating results are expected as follows: * Revenue
between $1,000 and $1,050 million. * Operating cash flow between
$150 and $170 million. * Operating income between $64 and $84
million. DCI -- 2005 Guidance Unchanged The following estimates
assume, among other factors, continued increase in the amount of
advertising dollars spent with cable networks as compared to
broadcast networks, stabilized ratings at the domestic networks,
investment in the international lifestyles and education
initiatives, and a stable national retail environment. For full
year 2005 versus 2004, DCI consolidated operating results are
expected to increase as follows: * Revenue by mid teens %. *
Operating cash flow by low double digits %. * Operating income by
approximately 10%. OUTSTANDING SHARES At June 30, 2005, there were
approximately 2.802 billion outstanding shares of L and LMC.B and
74 million shares of L and LMC.B reserved for issuance pursuant to
warrants and employee stock options. At June 30, 2005, there were
22 million options that had a strike price that was lower than the
closing stock price. Exercise of these options would result in
aggregate proceeds of approximately $126 million. OTHER EVENTS:
Liberty Completes Spin-Off of Discovery Holding Company On July 21,
2005, Liberty announced that it had successfully completed the spin
off of Discovery Holding Company through the distribution of all of
the outstanding shares of DHC common stock to Liberty stockholders
of record on July 15, 2005. Liberty no longer has any ownership
interest in DHC and DHC now trades on the NASDAQ National Market
under the symbols DISCA and DISCB. In the spin off, each share of
Liberty Series A and Series B common stock received 0.10 shares of
DHC Series A and Series B common stock, respectively. DHC is a
holding company for its wholly-owned subsidiary, Ascent Media
Group, and 50%-owned Discovery Communications, Inc. President and
CEO Robert Bennett Announces Intention to Retire On August 3, 2005,
Liberty announced that its President and CEO, Robert R. Bennett,
has informed the Board of Directors of his intention to retire as
of April 1, 2006. Mr. Bennett will remain a director of Liberty and
will continue to work with the company on special projects. In
addition, he will continue in his position as President and a
director of Discovery Holding Company, the former Liberty
subsidiary that was distributed to shareholders on July 21 of this
year. Liberty's Chairman, John Malone, has been elected to serve as
CEO until a successor has been identified. Certain statements in
this press release may constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown
risks, uncertainties and other important factors that could cause
the actual results, performance or achievements of the operating
businesses of Liberty included herein or industry results, to
differ materially from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Such risks, uncertainties and other factors include,
among others: the risks and factors described in the publicly filed
documents of Liberty, including the most recently filed Form 10-Q
of Liberty; general economic and business conditions and industry
trends including in the advertising and retail markets; spending on
domestic and foreign advertising; the continued strength of the
industries in which such businesses operate; continued
consolidation of the broadband distribution and movie studio
industries; uncertainties inherent in proposed business strategies
and development plans; changes in distribution and viewing of
television programming, including the expected deployment of
personal video recorders and IP television and their impact on
television advertising revenue and home shopping networks;
increased digital television penetration and the impact on channel
positioning of our networks; rapid technological changes; future
financial performance, including availability, terms and deployment
of capital; availability of qualified personnel; the development
and provision of programming for new television and
telecommunications technologies; changes in, or the failure or the
inability to comply with, government regulation, including, without
limitation, regulations of the Federal Communications Commission,
and adverse outcomes from regulatory proceedings; adverse outcomes
in pending litigation; changes in the nature of key strategic
relationships with partners and joint ventures; competitor
responses to such operating businesses' products and services, and
the overall market acceptance of such products and services,
including acceptance of the pricing of such products and services;
and threatened terrorist attacks and ongoing military action,
including armed conflict in the Middle East and other parts of the
world. These forward-looking statements speak only as of the date
of this Release. Liberty expressly disclaims any obligation or
undertaking to disseminate any updates or revisions to any
forward-looking statement contained herein to reflect any change in
Liberty's expectations with regard thereto or any change in events,
conditions or circumstances on which any such statement is based.
SUPPLEMENTAL INFORMATION As a supplement to Liberty's consolidated
statements of operations, the following is a presentation of
quarterly financial information and operating metrics on a
stand-alone basis for the three largest privately held businesses
(QVC, Inc., Starz Entertainment Group LLC and Discovery
Communications, Inc.) owned by or in which Liberty held an interest
at June 30, 2005. Please see page 8 for the definition of operating
cash flow (OCF) and Schedule 2 at the end of this document for
reconciliations for the applicable periods in 2005 and 2004 of
operating cash flow to operating income, as determined under GAAP,
for each identified entity. The selected financial information
presented for DCI was obtained directly from DCI. Liberty does not
control the decision-making processes or business management
practices of DCI. Accordingly, Liberty relies on DCI's management
to provide accurate financial information prepared in accordance
with generally accepted accounting principles that Liberty uses in
the application of the equity method. Liberty is not aware,
however, of any errors in or possible misstatements of the
financial information provided to it by DCI that would have a
material effect on Liberty's consolidated financial statements.
Further, Liberty could not, among other things, cause DCI to
distribute to Liberty its proportionate share of the revenue or OCF
of DCI. QUARTERLY SUMMARY (amounts in millions) 2Q05 1Q05 4Q04 3Q04
2Q04 QVC, INC. (98.5%) Revenue - Domestic $1,034 1,025 1,347 932
930 Revenue - International 445 439 476 360 359 Revenue - Total
$1,479 1,464 1,823 1,292 1,289 OCF - Domestic $248 241 334 210 221
OCF - International 76 82 77 61 57 OCF - Total $324 323 411 271 278
Operating Income $193 200 290 153 164 Gross Margin - Domestic 38.0%
37.3% 36.8% 36.8% 37.8% Gross Margin - International 36.7% 38.2%
34.0% 37.6% 37.0% Homes Reached - Domestic 89.9 89.1 88.4 87.8 87.3
Homes Reached - International 69.8 68.2 66.0 64.8 63.4 STARZ
ENTERTAINMENT GROUP LLC (100%) Revenue $258 254 248 245 238 OCF $47
48 46 62 62 Operating Income (Loss) $36 36 1 46 48 Subscription
Units - Starz! 14.1 14.0 14.1 13.7 13.3 Subscription Units - Encore
24.9 24.5 24.5 23.9 23.4 Subscription Units - Thematic 140.0 135.3
134.2 129.7 127.2 Multiplex & Other Subscription Units -
Total(1) 179.0 173.8 172.8 167.3 163.9 DISCOVERY COMMUNICATIONS,
INC. (50.0%)(2) Revenue - U.S. Networks (3) $455 416 413 385 421
Revenue - International Networks(4),(5) 177 159 171 146 144 Revenue
- Commerce, Education & Other(6) 28 26 109 26 22 Revenue -
Total $660 601 693 557 587 OCF - U.S. Networks (3) $183 147 140 151
168 OCF - International Networks (4),(5) 21 25 26 26 31 OCF -
Commerce, Education & Other(6) (20) (24) 16 (16) (16) OCF -
Total $184 148 182 161 183 Operating Income $130 97 159 129 118
Subscription Units - U.S. Networks(3),(7) 676 666 667 663 648
Subscription Units - International Networks (4),(5) 646 576 565 548
455 Subscription Units - Total (8) 1,322 1,242 1,232 1,211 1,103
(1) SEG - Subscription Units: Total subscription units represent
the number of SEG services which are purchased by cable, DTH and
other distribution media customers. (2) DCI - Certain prior period
amounts have been reclassified to conform to the current period
presentation. (3) DCI - Discovery Networks U.S.: Discovery Channel,
TLC, Animal Planet, Travel Channel, Discovery Health Channel, Fit
TV, Discovery Kids Channel, BBC-America Representation, The Science
Channel, Discovery Times Channel, Discovery Home (f/k/a Discovery
Home & Leisure Channel), Military Channel (f/k/a Discovery
Wings Channel), Discovery HD Theater and online initiatives.
Discovery Networks U.S. Joint Ventures - Discovery Times, Animal
Planet (US) - Consolidated: DCI owns a 50% interest in Discovery
Times and a 60% interest in Animal Planet (US). These ventures are
controlled by DCI and consolidated into the results of Discovery
Networks U.S. Due to certain contractual redemption rights of the
outside partners in the ventures, no losses of these ventures are
allocated to the outside partners. (4) DCI - Discovery Networks
International: Discovery Channels in UK, Europe, Latin America,
Asia, India, Africa, Middle East; Discovery Kids in UK, Latin
America; Discovery Travel & Living in UK, Europe, Latin
America, Asia, Middle East, Africa, India; Discovery Home &
Health in UK, Latin America, Asia; Discovery Real Time in UK, Asia;
Discovery Civilization in UK, Europe, Middle East, Africa; The
Science Channel in UK, Europe, Asia, Middle East, Africa; Discovery
Wings in UK; Animal Planet in UK, Germany, Italy, Discovery en
Espanol, Discovery Geschichte in Europe, and consolidated BBC/DCI
joint venture networks (Animal Planet networks in Europe, Latin
America, Japan, Asia, Africa; People + Arts in Latin America and
Spain). Discovery Networks International Joint Ventures -
Consolidated Discovery Networks International joint venture
networks (Animal Planet networks in Europe, Latin America, Japan,
Asia, Africa; People + Arts in Latin America and Spain) are
composed of joint ventures with British Broadcasting Corporation.
These ventures are controlled by DCI and consolidated into the
results of Discovery Networks International. The equity in the
assets of these joint ventures is predominantly held 50/50 by DCI
and BBC. Exceptions involve participants related to the local
market in which a specific network operates. (5) DCI - Discovery
Networks International - Equity Affiliates: DCI accounts for its
interests in joint ventures it does not control as equity method
investments. The operating results of joint ventures that DCI does
not control, including Discovery Channel Canada, Discovery Channel
Japan, Discovery Kids Canada, Discovery Home & Health Canada,
Discovery Civilization Canada, and Animal Planet Canada are not
consolidated and are not reflected in the results presented above.
(6) DCI - Commerce, Education and Other: Commerce, Education &
Other is comprised of a North American chain of 112 Discovery
Channel retail stores, mail-order catalog business, an on-line
shopping site, a global licensing and strategic partnerships
business, and an educational business that reaches many students in
the U.S. through the sale of supplemental hardcopy products and the
delivery of streaming video-on-demand through its digital internet
enabled platforms. (7) DCI - Discovery Networks U.S. - Subscription
Units: Includes 7.1 million, 7.1 million, 6.9 million, 6.9 million
and 6.8 million subscription units associated with the U.S. feed of
TLC into certain markets in Canada. Also includes 42.7 million,
41.9 million, 40.9 million, 40.5 million and 39.7 million
subscription units for BBC America, a service in which Discovery
does not have an ownership interest but is responsible for
distribution and advertising sales services in the United States.
(8) DCI - Subscription Units: Subscription units include (1)
multiple networks received in the same household that subscribe to
more than one network, (2) subscribers to joint venture networks,
(3) subscribers that are reached through branded programming
blocks, which are provided without charge, and (4) households that
receive DCI programming networks without charge pursuant to various
pricing plans that include free periods and/or free carriage.
NON-GAAP FINANCIAL MEASURES This press release includes a
presentation of operating cash flow, which is a non-GAAP financial
measure, for each of the privately held assets of Liberty included
herein together with a reconciliation of that non-GAAP measure to
the privately held asset's operating income, determined under GAAP.
Liberty defines operating cash flow as revenue less cost of sales,
operating expenses, and selling, general and administrative
expenses (excluding stock and other equity-based compensation).
Operating cash flow, as defined by Liberty, excludes depreciation
and amortization, stock and other equity-based compensation and
restructuring and impairment charges that are included in the
measurement of operating income pursuant to GAAP. Liberty believes
operating cash flow is an important indicator of the operational
strength and performance of its businesses, including the ability
to service debt and fund capital expenditures. In addition, this
measure allows management to view operating results and perform
analytical comparisons and benchmarking between businesses and
identify strategies to improve performance. Because operating cash
flow is used as a measure of operating performance, Liberty views
operating income as the most directly comparable GAAP measure.
Operating cash flow is not meant to replace or supercede operating
income or any other GAAP measure, but rather to supplement the
information to present investors with the same information as
Liberty's management considers in assessing the results of
operations and performance of its assets. Please see the attached
schedules for a reconciliation of consolidated segment operating
cash flow to consolidated earnings from continuing operations
before income taxes and minority interest (Schedule 1) and a
reconciliation, for our two largest consolidated subsidiaries and
our largest equity affiliate, of each identified entity's operating
cash flow to its operating income calculated in accordance with
GAAP (Schedule 2). LIBERTY MEDIA CORPORATION SCHEDULE 1 The
following table provides a reconciliation of consolidated segment
operating cash flow to earnings from continuing operations before
income taxes and minority interest for the three months ended June
30, 2005 and 2004. (amounts in millions) 2Q05 2Q04 QVC $324 278 SEG
47 62 Ascent Media, Corporate & Other 16 33 Consolidated
segment operating cash flow $387 373 Consolidated segment operating
cash flow 387 373 Stock compensation (23) (10) Depreciation and
amortization (181) (179) Interest expense (146) (149) Realized and
unrealized gains (losses) on financial instruments, net (288) (374)
Gains (losses) on dispositions of assets, net 17 14 Nontemporary
declines in fair value of investments -- (128) Other, net 20 60
Earnings from continuing operations before income $(214) (393)
taxes and minority interest LIBERTY MEDIA CORPORATION SCHEDULE 2
The following tables provide reconciliation, for our two largest
consolidated subsidiaries and our largest equity affiliate, of
operating cash flow to operating income calculated in accordance
with GAAP for the three months ended June 30, 2005, March 31, 2005,
December 31, 2004, September 30, 2004, and June 30, 2004,
respectively. (amounts in millions) 2Q05 1Q05 4Q04 3Q04 2Q04 QVC,
INC. (98.5%) Operating Cash Flow $324 323 411 271 278 Depreciation
and Amortization (114) (115) (113) (110) (106) Stock Compensation
Expense (17) (8) (8) (8) (8) Other -- -- -- -- -- Operating Income
$193 $200 290 153 164 STARZ ENTERTAINMENT GROUP LLC (100%)
Operating Cash Flow $47 48 46 62 62 Depreciation and Amortization
(11) (12) (22) (14) (14) Stock Compensation Expense -- -- (23) (2)
-- Other -- -- -- -- -- Operating Income $36 36 1 46 48 DISCOVERY
COMMUNICATIONS, INC. (50.0%) Operating Cash Flow $184 148 182 161
183 Depreciation and Amortization (31) (29) (32) (28) (38)
Long-Term Incentive Plans (23) (22) 9 (26) (27) Other -- -- -- 22
-- Operating Income $130 97 159 129 118 DATASOURCE: Liberty Media
Corporation CONTACT: Mike Erickson, or John Orr, both of Liberty
Media Corporation +1-877-772-1518
Copyright