Starz Acquisition LLC - FORM 10-Q - EX-99.1

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Exhibit 99.1

Attributed Financial Information for Tracking Stock Groups

Our Liberty CapStarz Starz common stock is intended to reflect the separate performance of our Starz Group which primarily includes our wholly-owned subsidiary Starz, LLC. Our Liberty CapStarz Capital common stock is intended to reflect the separate performance of our Capital Group which is comprised of all of our assets and businesses not attributed to the Starz Group.

The following tables present our assets and liabilities as of June 30, 2011 and our revenue, expenses and cash flows as of and for the three and six months ended June 30, 2011 and 2010. The tables further present our assets, liabilities, revenue, expenses and cash flows that are attributed to the Starz Group and the Capital Group, respectively. The financial information should be read in conjunction with our unaudited condensed combined financial statements for the six months ended June 30, 2011 included in this Quarterly Report on Form 10-Q.

Notwithstanding the following attribution of assets, liabilities, revenue, expenses and cash flows to the Starz Group and the Capital Group, our tracking stock structure does not affect the ownership or the respective legal title to our assets or responsibility for our liabilities. We and our subsidiaries are each responsible for our respective liabilities. Holders of Liberty CapStarz Starz common stock and Liberty CapStarz Capital common stock are holders of our common stock and are subject to risks associated with an investment in our company and all of our businesses, assets and liabilities. The issuance of Liberty CapStarz Starz common stock and Liberty CapStarz Capital common stock does not affect the rights of our creditors or creditors of our subsidiaries.

SUMMARY ATTRIBUTED FINANCIAL DATA

Starz Group

	June 30, 2011

	amounts in millions
Summary balance sheet data:
Current assets	$	1,965	1,746
Total assets	$	2,787	2,539
Long-term debt, including current portion	$	42	68
Attributed net assets	$	2,374	2,246

		Three months ended June 30,						Six months ended June 30,

		2011			2010			2011			2010
		amounts in millions
Summary operations data:
Revenue		$	403			311			795			618
Operating expenses			(234	)		(172	)		(429	)		(337	)
Selling, general and administrative expenses(1)			(56	)		(39	)		(132	)		(84	)
Depreciation and amortization			(5	)		(4	)		(10	)		(9	)

	Operating income		108			96			224			188
Other expense, net			—			(1	)		(2	)		—
Income tax expense			(41	)		(34	)		(102	)		(70	)

	Net earnings		67			61			120			118
Less net earnings attributable to noncontrolling interests			—			—			1			—

	Net earnings attributable to Liberty CapStarz stockholders	$	67			61			119			118

(1): Includes stock-based compensation of $4 million and $3 million for the three months ended June 30, 2011 and 2010, respectively, and $9 million and $9 million for the six months ended June 30, 2011 and 2010, respectively.

SUMMARY ATTRIBUTED FINANCIAL DATA

Capital Group

	June 30, 2011

	amounts in millions
Summary balance sheet data:
Current assets	$	2,007	1,721
Investments in available-for-sale securities and other cost investments	$	2,918	4,483
Total assets	$	6,515	8,189
Long-term debt, including current portion	$	750	2,033
Attributed net assets	$	2,916	2,780

		Three months ended June 30,						Six months ended June 30,

		2011			2010			2011			2010
		amounts in millions
Summary operations data:
Revenue		$	135			200			716			366
Operating expenses			(98	)		(196	)		(296	)		(301	)
Selling, general and administrative expenses(1)			(36	)		(66	)		(67	)		(181	)
Legal settlement			—			—			7			—
Depreciation and amortization			(15	)		(21	)		(31	)		(37	)

	Operating income (loss)		(14	)		(83	)		329			(153	)
Interest expense			(1	)		(10	)		(7	)		(33	)
Share of losses of affiliates, net (note 3)			(22	)		—			(50	)		—
Realized and unrealized gains (losses) on financial instruments, net			54			(88	)		175			55
Other income, net			24			50			49			57
Income tax (expense) benefit			(20	)		46			(196	)		11

	Net earnings (loss)		21			(85	)		300			(63	)
Less net earnings attributable to noncontrolling interests			(1	)		(3	)		(1	)		(3	)

	Net earnings (loss) attributable to Liberty CapStarz stockholders	$	22			(82	)		301			(60	)

(1): Includes stock-based compensation of $6 million and $3 million for the three months ended June 30, 2011 and 2010, respectively, and $12 million and $14 million for the six months ended June 30, 2011 and 2010, respectively.

BALANCE SHEET INFORMATION
June 30, 2011
(unaudited)

			Attributed (note 1)

			Starz Group			Capital Group			Inter-group eliminations			Combined Liberty CapStarz
			amounts in millions
Assets
Current assets:
	Cash and cash equivalents		$	1,035			1,067			—			2,102
	Trade and other receivables, net			223			59			—			282
	Program rights			471			—			—			471
	Short term marketable securities			132			192			—			324
	Restricted cash			39			662			—			701
	Receivable from Liberty			26			—			—			26
	Other current assets			39			27			(24	)		42

		Total current assets		1,965			2,007			(24	)		3,948

Investments in available-for-sale securities and other cost investments (note 2)				65			2,918			—			2,983
Investments in affiliates, accounted for using the equity method (note 3)				—			460			—			460
Property and equipment, net				99			132			—			231
Intangible assets not subject to amortization				132			354			—			486
Intangible assets subject to amortization, net				17			126			—			143
Program rights				342			—			—			342
Deferred costs				—			244			—			244
Deferred tax assets				—			243			(51	)		192
Other assets, at cost, net of accumulated amortization				167			31			—			198

		Total assets	$	2,787			6,515			(75	)		9,227

Liabilities and Equity
Current liabilities:
	Accounts payable		$	6			10			—			16
	Accrued liabilities			240			42			—			282
	Financial instruments			—			1,166			—			1,166
	Current portion of debt (note 4)			4			750			—			754
	Current deferred tax liabilities			—			736			(24	)		712
	Deferred revenue			24			81			—			105
	Other current liabilities			9			31			—			40

		Total current liabilities		283			2,816			(24	)		3,075

Long-term debt (note 4)				38			—			—			38
Deferred income tax liabilities				51			—			(51	)		—
Deferred revenue				—			535			—			535
Other liabilities				45			249			—			294

		Total liabilities		417			3,600			(75	)		3,942
Equity/Attributed net assets				2,374			2,916			—			5,290
Noncontrolling interests in equity of subsidiaries				(4	)		(1	)		—			(5	)

		Total liabilities and equity	$	2,787			6,515			(75	)		9,227

STATEMENT OF OPERATIONS AND COMPREHENSIVE EARNINGS (LOSS) INFORMATION
Three months ended June 30, 2011
(unaudited)

				Attributed (note 1)

				Starz Group			Capital Group			Combined Liberty CapStarz
				amounts in millions
Revenue:
	Communications and programming services			$	403			135			538

					403			135			538

Operating costs and expenses:
	Operating				234			98			332
	Selling, general and administrative, including stock-based compensation (note 5)				56			36			92
	Depreciation and amortization				5			15			20

					295			149			444

		Operating income			108			(14	)		94
Other income (expense):
	Interest expense				(2	)		(1	)		(3	)
	Share of losses of affiliates, net (note 3)				—			(22	)		(22	)
	Realized and unrealized gains on financial instruments, net				—			54			54
	Other, net				2			24			26

					—			55			55

		Earnings before income taxes			108			41			149
Income tax expense					(41	)		(20	)		(61	)

		Net earnings			67			21			88
Less net losses attributable to noncontrolling interests					—			(1	)		(1	)

Net earnings attributable to Liberty CapStarz stockholders				$	67			22			89

Net earnings				$	67			21			88

Other comprehensive earnings (loss), net of taxes:
	Foreign currency translation adjustments				—			2			2
	Unrealized holding losses arising during the period				—			(3	)		(3	)
	Recognition of previously unrealized (gains) losses on available-for-sale securities, net				(1	)		9			8
	Share of other comprehensive earnings of equity affiliates				—			4			4

		Other comprehensive earnings (loss)			(1	)		12			11

			Comprehensive earnings		66			33			99
Less comprehensive losses attributable to the noncontrolling interests					—			(1	)		(1	)

Comprehensive earnings attributable to Liberty CapStarz stockholders				$	66			34			100

STATEMENT OF OPERATIONS AND COMPREHENSIVE EARNINGS (LOSS) INFORMATION
Three months ended June 30, 2010
(unaudited)

				Attributed (note 1)

				Starz Group			Capital Group			Combined Liberty CapStarz
				amounts in millions
Revenue:
	Communications and programming services			$	311			200			511

					311			200			511

Operating costs and expenses:
	Operating				172			196			368
	Selling, general and administrative, including stock-based compensation (note 5)				39			66			105
	Depreciation and amortization				4			21			25

					215			283			498

		Operating income (loss)			96			(83	)		13
Other income (expense):
	Interest expense				(1	)		(10	)		(11	)
	Intergroup interest expense				—			(1	)		(1	)
	Share of earnings of affiliates, net (note 3)				—			3			3
	Realized and unrealized losses on financial instruments, net				—			(88	)		(88	)
	Gains on dispositions, net				—			25			25
	Other, net				—			23			23

					(1	)		(48	)		(49	)

		Earnings (loss) before income taxes			95			(131	)		(36	)
Income tax (expense) benefit					(34	)		46			12

		Net earnings (loss)			61			(85	)		(24	)
Less net loss attributable to the noncontrolling interests					—			(3	)		(3	)

Net earnings (loss) attributable to Liberty CapStarz stockholders				$	61			(82	)		(21	)

Net earnings (loss)				$	61			(85	)		(24	)

Other comprehensive loss, net of taxes:
	Unrealized holding losses arising during the period				—			(61	)		(61	)
	Recognition of previously unrealized gains on available-for-sale securities, net				—			(13	)		(13	)

		Other comprehensive loss			—			(74	)		(74	)

			Comprehensive earnings (loss)		61			(159	)		(98	)
Less comprehensive loss attributable to the noncontrolling interests					—			(3	)		(3	)

Comprehensive earnings (loss) attributable to Liberty CapStarz stockholders				$	61			(156	)		(95	)

STATEMENT OF OPERATIONS AND COMPREHENSIVE EARNINGS INFORMATION
Six months ended June 30, 2011
(unaudited)

					Attributed (note 1)

					Starz Group			Capital Group			Combined Liberty CapStarz
					amounts in millions
Revenue:
	Communications and programming services				$	795			716			1,511

						795			716			1,511

Operating costs and expenses:
	Operating					429			296			725
	Selling, general and administrative including stock-based compensation (notes 1 and 5)					132			67			199
	Legal Settlement					—			(7	)		(7	)
	Depreciation and amortization					10			31			41

						571			387			958

		Operating income				224			329			553
Other income (expense):
	Interest expense					(3	)		(7	)		(10	)
	Share of losses of affiliates, net					—			(50	)		(50	)
	Realized and unrealized gains on financial instruments, net					1			175			176
	Losses on dispositions, net					(2	)		—			(2	)
	Other, net					2			49			51

						(2	)		167			165

		Earnings before income taxes				222			496			718
Income tax expense (note 6)						(102	)		(196	)		(298	)

		Net earnings				120			300			420
Less net earnings (loss) attributable to the noncontrolling interests						1			(1	)		—

Net earnings (loss) attributable to Liberty CapStarz stockholders					$	119			301			420

		Net earnings			$	120			300			420

Other comprehensive loss, net of taxes:
	Foreign currency translation adjustments					—			2			2
	Unrealized holding gains (loss) arising during the period					—			(27	)		(27	)
	Recognition of previously unrealized gains on available-for-sale securities, net					(7	)		9			2
	Share of other comprehensive loss of equity affiliates					—			4			4
	Other					1			—			1

			Other comprehensive loss			(6	)		(12	)		(18	)

				Comprehensive earnings		114			288			402
Less comprehensive earnings (loss) attributable to the noncontrolling interests						1			(1	)		—

Comprehensive earnings (loss) attributable to Liberty CapStarz stockholders					$	113			289			402

STATEMENT OF OPERATIONS AND COMPREHENSIVE EARNINGS INFORMATION
Six months ended June 30, 2010
(unaudited)

					Attributed (note 1)

					Starz Group			Capital Group			Combined Liberty CapStarz
					amounts in millions
Revenue:
	Communications and programming services				$	618			366			984

						618			366			984

Operating costs and expenses:
	Operating					337			301			638
	Selling, general and administrative including stock-based compensation (notes 1 and 5)					84			181			265
	Depreciation and amortization					9			37			46

						430			519			949

		Operating income (loss)				188			(153	)		35
Other income (expense):
	Interest expense					(1	)		(33	)		(34	)
	Intergroup interest income					2			1			3
	Share of losses of affiliates, net					—			(11	)		(11	)
	Realized and unrealized gains (losses) on financial instruments, net					(1	)		55			54
	Gains on dispositions, net					—			24			24
	Other, net					—			43			43

						—			79			79

		Earnings (loss) before income taxes				188			(74	)		114
Income tax (expense) benefit (note 6)						(70	)		11			(59	)

		Net earnings (loss)				118			(63	)		55
Less net loss attributable to the noncontrolling interests						—			(3	)		(3	)

Net earnings (loss) attributable to Liberty CapStarz stockholders					$	118			(60	)		58

		Net earnings (loss)			$	118			(63	)		55

Other comprehensive earnings (loss), net of taxes:
	Unrealized holding gains (loss) arising during the period					—			(31	)		(31	)
	Recognition of previously unrealized gains on available-for-sale securities, net					—			(13	)		(13	)
	Reattribution of other comprehensive income between tracking stocks					—			30			30

			Other comprehensive loss			—			(14	)		(14	)

				Comprehensive earnings (loss)		118			(77	)		41
Less comprehensive loss attributable to the noncontrolling interests						—			(3	)		(3	)

Comprehensive earnings (loss) attributable to Liberty CapStarz stockholders					$	118			(74	)		44

STATEMENT OF CASH FLOWS INFORMATION
Six months ended June 30, 2011
(unaudited)

				Attributed (note 1)

				Starz Group			Capital Group			Combined Liberty CapStarz
				amounts in millions
Cash flows from operating activities:
	Net earnings			$	120			300			420
	Adjustments to reconcile net earnings to net cash provided by operating activities:
		Depreciation and amortization			10			31			41
		Amortization of program rights			295			—			295
		Stock-based compensation			9			12			21
		Cash payments for stock based compensation			(6	)		(3	)		(9	)
		Noncash interest expense (income)			2			(1	)		1
		Share of losses of affiliates, net			—			50			50
		Realized and unrealized losses on financial instruments, net			(1	)		(175	)		(176	)
		Losses on disposition of assets, net			2			—			2
		Intergroup tax allocation			60			(156	)		(96	)
		Intergroup tax payments			(4	)		142			138
		Deferred income tax expense			37			180			217
		Other noncash charges (credits), net			55			(383	)		(328	)
		Changes in operating assets and liabilities
			Current and other assets		(468	)		(42	)		(510	)
			Payables and other current liabilities		70			142			212

Net cash provided by operating activities					181			97			278

Cash flows from investing activities:
	Investments in and loans to cost and equity investees				—			(82	)		(82	)
	Repayment of loan by cost and equity investees				—			189			189
	Capital expended for property and equipment				(2	)		(4	)		(6	)
	Net sales of short term investments				46			143			189
	Net increase in restricted cash				(11	)		(134	)		(145	)
	Reattribution of cash				—			(264	)		(264	)
	Other investing activities, net				(1	)		—			(1	)

Net cash provided (used) by investing activities					32			(152	)		(120	)

Cash flows from financing activities:
	Borrowings of debt				1			—			1
	Repayments of debt				(57	)		(1	)		(58	)
	Repurchases of Liberty common stock				—			(96	)		(96	)
	Other financing activities, net				—			7			7

Net cash used by financing activities					(56	)		(90	)		(146	)

	Net increase (decrease) in cash and cash equivalents				157			(145	)		12
	Cash and cash equivalents at beginning of period				878			1,212			2,090

	Cash and cash equivalents at end period			$	1,035			1,067			2,102

STATEMENT OF CASH FLOWS INFORMATION
Six months ended June 30, 2010
(unaudited)

				Attributed (note 1)

				Starz Group			Capital Group			Combined Liberty CapStarz
				amounts in millions
Cash flows from operating activities:
	Net earnings			$	118			(63	)		55
	Adjustments to reconcile net earnings to net cash provided by operating activities:
		Depreciation and amortization			9			37			46
		Amortization of program rights			287			—			287
		Stock-based compensation			9			14			23
		Cash payments for stock based compensation			(29	)		—			(29	)
		Noncash interest expense			—			1			1
		Share of losses of affiliates, net			—			11			11
		Realized and unrealized gains (losses) on financial instruments, net			1			(55	)		(54	)
		Gains on disposition of assets, net			—			(24	)		(24	)
		Intergroup tax allocation			57			(156	)		(99	)
		Intergroup tax payments			17			173			190
		Deferred income tax expense			12			28			40
		Other noncash charges, net			12			69			81
		Changes in operating assets and liabilities
			Current and other assets		(359	)		(81	)		(440	)
			Payables and other current liabilities		70			173			243

Net cash provided by operating activities					204			127			331

Cash flows from investing activities:
	Cash proceeds from dispositions				29			30			59
	Proceeds (payments) related to settlement of financial instruments				—			750			750
	Investments in and loans to cost and equity investees				—			(257	)		(257	)
	Repayment of loan by Liberty				158			158			316
	Repayment of loan by equity investee				—			98			98
	Capital expended for property and equipment				(1	)		(5	)		(6	)
	Net purchases of short term investments				(137	)		(170	)		(307	)
	Net (increase) decrease in restricted cash				(20	)		(11	)		(31	)
	Reattribution of cash				—			(807	)		(807	)
	Other investing activities, net				—			6			6

Net cash provided (used) by investing activities					29			(208	)		(179	)

Cash flows from financing activities:
	Borrowings of debt				—			88			88
	Repayments of debt				(2	)		(973	)		(975	)
	Repurchases of Liberty common stock				(40	)		(286	)		(326	)
	Other financing activities, net				(39	)		155			116

Net cash provided (used) by financing activities					(81	)		(1,016	)		(1,097	)

	Net increase (decrease) in cash and cash equivalents				152			(1,097	)		(945	)
	Cash and cash equivalents at beginning of period				794			3,157			3,951

	Cash and cash equivalents at end period			$	946			2,060			3,006

Notes to Attributed Financial Information

(unaudited)

(1)

The Starz Group consists primarily of our subsidiary Starz, LLC and approximately $1,044 million of cash, including subsidiary cash. Accordingly, the accompanying attributed financial information for the Starz Group includes these investments and the assets, liabilities, revenue, expenses and cash flows of that consolidated subsidiaries.

The Starz Group focuses primarily on video programming. Accordingly, we expect that businesses we may acquire in the future that we believe are complementary to this strategy will also be attributed to the Starz Group.

The Capital Group consists of all of our businesses not included in the Starz Group, including our consolidated subsidiaries Atlanta National League Baseball Club, Inc. and TruePosition, Inc. and certain cost and equity investments. Accordingly, the accompanying attributed financial information for the Capital Group includes these investments and the assets, liabilities, revenue, expenses and cash flows of these consolidated subsidiaries. In addition, we have attributed to the Capital Group all of our notes and debentures (and related interest expense) that have not been attributed to the Starz Group. See note 4 below for the debt obligations attributed to the Capital Group. In addition, we have allocated certain corporate general and administrative expenses among the Starz Group and the Capital Group as described in note 5 below.

On February 25, 2010, Liberty Media Corporation ("Liberty" or "Liberty Media") announced that its board of directors had resolved to effect the following changes in attribution between the Liberty Capital Group and the Liberty Interactive Group, effective immediately (the "February Reattribution"):

•

the change in attribution from the Liberty Interactive Group to the Liberty Capital Group of Liberty's 14.6% ownership interest in Live Nation Entertainment, Inc.;

•

the change in attribution from the Liberty Capital Group to the Liberty Interactive Group of the following debt securities:

•: $469 million in principal amount of 4% Exchangeable Senior Debentures due 2029 (the "2029 Exchangeables");
•: $460 million in principal amount of 3.75% Exchangeable Senior Debentures due 2030 (the "2030 Exchangeables"); and
•: $492 million in principal amount of 3.5% Exchangeable Senior Debentures due 2031 (the "2031 Exchangeables", and together with the 2029 Exchangeables and the 2030 Exchangeables, the "Exchangeable Notes");

•

the change in attribution from the Liberty Capital Group to the Liberty Interactive Group of approximately $830 million in net taxable income to be recognized ratably in tax years 2014 through 2018 as a result of the cancellation in April 2009 of $400 million in principal amount of 2029 Exchangeables and $350 million in principal amount of 2030 Exchangeables; and

•

the change in attribution from the Liberty Capital Group to the Liberty Interactive Group of $807 million in cash.

Notes to Attributed Financial Information (Continued)

The Liberty Media board determined that the February Reattribution would enable the Liberty Interactive Group to obtain long-term debt financing on better terms than would have been available to it in the capital markets at that time and improve the liquidity of the Liberty Interactive Group. In addition, the Liberty Interactive Group's generation of meaningful taxable income would better position it to utilize more directly and efficiently the tax benefits associated with the Exchangeable Notes. Previously, the Interactive Group was using these tax benefits, which were then attributed to the Liberty Capital Group, and compensating the Liberty Capital Group for such use. Lastly, the Liberty Media board believed that Liberty Media's equity interests in Live Nation Entertainment should be reattributed to the Liberty Capital Group in order to position it to take advantage of potential synergies associated with the Liberty Capital Group's interests in Sirius XM Radio.

In establishing the terms of the February Reattribution, the Liberty Media board reviewed, among other things, (i) a range of estimated values for the Exchangeable Notes (between $482 million and $526 million), which took into account the trading prices of the Exchangeable Notes and their unique tax attributes, among other things, and (ii) the estimated value of Liberty Media's equity interests in Live Nation Entertainment (approximately $298 million), which was based on the $12 per share offer price in Liberty Media's tender offer for additional shares of Live Nation during February 2010. Consistent with Liberty Media's Management and Allocation Policies, the Liberty Media board determined that the exchange of assets and liabilities between the two groups in the February Reattribution was completed on a fair value basis.

The February Reattribution has been reflected prospectively. This change in attribution had no effect on the balance sheet and results of operations attributed to the Starz Group.

On September 16, 2010, Liberty Media's board of directors approved a change in attribution of Liberty Media's interest in Starz Media, LLC along with $15 million in cash from the Liberty Capital Group to the Liberty Starz Group, effective September 30, 2010 (the "Starz Media Reattribution"). As a result of the Starz Media Reattribution, an intergroup payable of approximately $54.9 million owed by the Liberty Capital Group to the Liberty Starz Group has been extinguished, and its Starz Group has become attributed with approximately $53.7 million in bank debt, interest rate swaps and any shutdown costs associated with the winding down of the Overture Films business. Notwithstanding the Starz Media Reattribution, the board determined that certain tax benefits relating to the operation of the Starz Media, LLC business by the Liberty Capital Group that may be realized from any future sale or other disposition of that business by the Liberty Starz Group will remain attributed to the Liberty Capital Group.

The Starz Media Reattribution enabled the Liberty Starz Group to acquire the complementary Starz Media business. Starz Entertainment had been engaging in mutually beneficial content distribution and programming arrangements with Starz Media, and it was inefficient for these arrangements to be treated as inter-group transactions. Accordingly, the Liberty Media board reattributed Starz Media, and its related debt, from the Liberty Capital Group to the Liberty Starz Group. This also enabled the Liberty Capital Group to repay indebtedness it owed to the Liberty Starz Group without using any of its cash reserves.

In establishing the terms of the Starz Media Reattribution, the Liberty Media board considered, among other things, (i) a range of estimated values for the Starz Media assets (between $95 million and $122 million), (ii) the $53.7 million in Starz Media liabilities to be assumed and (iii) the $54.9 million payable owed by the Liberty Capital Group to the Liberty Starz Group. Consistent with Liberty Media's Management and Allocation Policies, the Liberty Media board

Notes to Attributed Financial Information (Continued)

determined that the exchange of assets and liabilities between the two groups in the Starz Reattribution was completed on a fair value basis.

The Starz Media Reattribution has been reflected prospectively.

On February 9, 2011, Liberty Media's Board of Directors approved the change in attribution of (i) approximately $1.138 billion principal amount of Liberty Media LLC's 3.125% Exchangeable Senior Debentures due 2023 (the "TWX Exchangeable Notes"), (ii) 21,785,130 shares of Time Warner Inc. common stock, 5,468,254 shares of Time Warner Cable Inc. common stock and 1,980,425 shares of AOL, Inc. common stock, which collectively represent the basket of securities into which the TWX Exchangeable Notes are exchangeable (the "Basket Securities") and (iii) $263.8 million in cash from the Liberty Capital Group to the Liberty Interactive Group, effective immediately (the "TWX Reattribution"). The TWX Reattribution had no effect on the assets and liabilities attributed to the Liberty Starz Group, nor did it effect any change to the obligor of the TWX Exchangeable Notes, which remains Liberty Media LLC.

The Liberty Media board determined to effect the TWX Reattribution in light of the proposed split-off, to eliminate ambiguity regarding the terms of this reattribution and to better align the TWX Exchangeable Notes with the tracking stock group that has the strongest cashflow generation. The reattribution of the TWX Exchangeable Notes was necessary to complete the pending proposed split-off of Liberty's Liberty Capital and Liberty Starz tracking stock groups from its Liberty Interactive tracking stock group (the "proposed Split-Off") because the obligor thereunder, Liberty Media LLC, will remain with Liberty Media following that split-off. The Liberty Media board believed that waiting to complete this reattribution until an unknowable time when the conditions to the split-off would be satisfied was creating confusion in the marketplace over the terms of the pending reattribution, including the amount of cash to be reattributed. In addition, and irrespective of the split-off, the Liberty Media board believes the Liberty Interactive Group is best positioned to fulfill the obligations under the Exchangeable Notes given its strong cash flow and solid credit position. Accordingly, the Liberty Media board decided to complete the TWX Reattribution at its February 9, 2011 board meeting.

In establishing the terms of the TWX Reattribution, the Liberty Media board reviewed, among other things, (i) the principal amount of the TWX Exchangeable Notes, (ii) a range of values for tax liabilities associated with the delivery of the Basket Securities (between $162 million and $168 million), (iii) a range of values in payment for the risk that the Basket Securities are worth less than the face amount of the TWX Exchangeable Notes at the first date on which the TWX Exchangeable Notes can be redeemed, which is March 30, 2013 (between $36 million to $55 million), and (iv) the estimated value of the Basket Securities, using closing market prices on February 8, 2011 ($1.2 billion in the aggregate).

Any businesses that we may acquire in the future that are not attributed to the Starz Group will be attributed to the Capital Group.

While we believe the allocation methodology described above is reasonable and fair to each group, we may elect to change the allocation methodology in the future. In the event we elect to transfer assets or businesses from one group to the other, such transfer would be made on a fair value basis and would be accounted for as a short-term loan unless our board of directors determines to account for it as a long-term loan or through an inter-group interest.

Notes to Attributed Financial Information (Continued)

(2): Investments in available-for-sale securities, including non-strategic securities, and other cost investments are summarized as follows:

			June 30, 2011

			amounts in millions
Capital Group
	Time Warner Inc.(1)(2)		$	453	1,101
	Time Warner Cable Inc.(1)(2)			244	567
	Sprint Nextel Corporation ("Sprint")(1)			248	301
	Motorola Solutions(1)(3)			341	471
	Motorola Mobility(1)(3)			143	—
	Viacom, Inc.			387	301
	Live Nation(4)			25	389
	Century Link, Inc.(1)			148	248
	Priceline(1)			267	208
	Other AFS equity securities(1)(2)			43	100
	SIRIUS XM debt securities			389	384
	Other AFS debt securities			222	404
	Other cost investments and related receivables			8	9

		Total attributed to the Capital Group		2,918	4,483

Starz Group
	Other			65	67

		Total attributed to the Starz Group		65	67

	Combined Liberty CapStarz		$	2,983	4,550

(1): Includes shares pledged as collateral for share borrowing arrangements. See note 8.
(2): As discussed in note 2, certain of these securities were reattributed from the Capital Group to the Interactive Group in the first quarter of 2011.
(3): Effective January 4, 2011 Motorola, Inc. separated Motorola Mobility Holdings, Inc. in a 1 for 8 stock distribution. Motorola Inc. simultaneously completed a 1 for 7 reverse stock split and was renamed Motorola Solutions, Inc.
(4): In June 2011 the Company acquired an additional 5.5 million shares of Live Nation for $58 million. The additional ownership requires the Company to account for the investment as an equity method affiliate. For additional discussion see footnote 7. Liberty continues to hold debt securities in Live Nation which are included in available-for-sale securities.

Notes to Attributed Financial Information (Continued)

(3): The following table presents information regarding certain equity method investments:

									Share of earnings (losses)

									Three months ended June 30,					Six months Ended June 30,
		June 30, 2011
		Percentage ownership			Carrying value		Market value
		Percentage ownership			Carrying value		Market value		2011			2010		2011			2010
		dollar amounts in millions
Capital Group
	Sirius(a)		40	%	$	—	$	5,665	$	(1	)	$	8		(8	)		—
	Live Nation(b)		21	%	$	371	$	449	$	(22	)	$	—		(45	)		—

(a): As of June 30, 2011, the Sirius Preferred Stock had a market value of $5,665 million based on the value of the common stock into which it is convertible.
(b): During June 2011, Liberty acquired an additional 5.5 million shares of Live Nation which increased our ownership percentage above 20% of the outstanding voting shares. Due to the presumption that an entity with an ownership percentage greater then 20% has significant influence and no other factors would rebut that presumption, the Company is accounting for the investment as an equity method affiliate. The Company has elected to record its share of earnings (loss) for Live Nation on a three-month lag due to timeliness considerations. Increases in ownership which result in a change to the equity method of accounting generally require retroactive recognition of an investment's share of earnings (loss) in prior periods. Due to the relative insignificance of our share of losses for Live Nation in previous periods, both quantitatively and qualitatively, the Company has recorded such amounts in the current year. Approximately $12 million of the losses recorded for the six months ended June 30, 2011 relate to the prior year.

(4): Debt attributed to the Liberty CapStarz Starz Group and the Liberty CapStarz Capital Group is comprised of the following:

			June 30, 2011

			Outstanding principal		Carrying value
			amounts in millions
Capital Group
	Liberty bank facility		$	750		750

		Total attributed Capital Group debt		750		750

Starz Group
	Subsidiary debt			42		42

		Total attributed Starz Group debt		42		42

Total debt			$	792		792

(5): Cash and stock-based compensation expense for our corporate employees has been allocated among the Starz Group and the Capital Group based on the estimated percentage of time spent providing services for each group. Historically these items have been allocated to the Liberty Interactive Group based on the same methodology and based on the services agreement, which will be entered into between Liberty and Liberty CapStarz in connection with the proposed Split-Off, will continue to be allocated on a similar basis upon the completion of the propose Split-Off.

Notes to Attributed Financial Information (Continued)

Other general and administrative expenses are charged directly to the groups whenever possible and are otherwise allocated based on estimated usage or some other reasonably determined methodology. Amounts allocated from the Capital Group to the Liberty Interactive Group and the Starz Group, including stock-based compensation, are as follows:

	Six months ended June 30,

	2011		2010
	amounts in millions
Liberty Interactive Group	$	31		21
Starz Group	$	10		9

While we believe that this allocation method is reasonable and fair to each group, we may elect to change the allocation methodology or percentages used to allocate general and administrative expenses in the future.

(6): We have accounted for income taxes for the Starz Group and the Capital Group in the accompanying attributed financial information in a manner similar to a stand-alone company basis. To the extent this methodology differs from our tax sharing policy, differences have been reflected in the attributed net assets of the groups.
(7): The Liberty CapStarz Starz common stock and the Liberty CapStarz Capital common stock have voting and conversion rights under our amended charter. Following is a summary of those rights. Holders of Series A common stock of each group are entitled to one vote per share and holders of Series B common stock of each group are entitled to ten votes per share. Holders of Series C common stock of each group, if issued, will be entitled to 1/100th of a vote per share in certain limited cases and will otherwise not be entitled to vote. In general, holders of Series A and Series B common stock vote as a single class. In certain limited circumstances, the board may elect to seek the approval of only the holders of common stock related to our Starz Group or our Capital Group.

At the option of the holder, each share of Series B common stock will be convertible into one share of Series A common stock of the same group. At the discretion of our board, the common stock related to one group may be converted into common stock of the same series that is related to one of our other groups.

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Exhibit 99.1

BALANCE SHEET INFORMATION June 30, 2011 (unaudited)
STATEMENT OF OPERATIONS AND COMPREHENSIVE EARNINGS (LOSS) INFORMATION Three months ended June 30, 2011 (unaudited)
STATEMENT OF OPERATIONS AND COMPREHENSIVE EARNINGS INFORMATION Six months ended June 30, 2011 (unaudited)
STATEMENT OF CASH FLOWS INFORMATION Six months ended June 30, 2011 (unaudited)
STATEMENT OF CASH FLOWS INFORMATION Six months ended June 30, 2010 (unaudited)
Notes to Attributed Financial Information (unaudited)

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