EXHIBIT 99B
U S WEST MEDIA GROUP
7800 East Orchard Road
Englewood, Colorado 80111
[U S WEST Media Group logo and registered mark]
News Release
Release Date: October 27, 1997
Contact: Blair Johnson Steve Lang
303-793-6296 303-793-6290
U S WEST MEDIA GROUP REPORTS EIGHTH CONSECUTIVE QUARTER
OF DOUBLE-DIGIT REVENUE AND CASH-FLOW GROWTH
- International customers increase 71 percent, to 2.4 million -
- Cable-modem customers now at 13,000 -
ENGLEWOOD, Colo. - U S WEST Media Group (NYSE: UMG) today reported its eighth
straight quarter of double-digit growth in revenue and operating cash flow.
For the third quarter 1997, Media Group reported - on a proportionate basis:
- A 15 PERCENT INCREASE IN OPERATING CASH FLOW, to $667 million. Media
Group's operating cash flow for third quarter 1996 was $582 million on a
comparable basis. (All 1996 numbers have been adjusted to include Continental
Cablevision's results - even though it didn't merge with Media Group until
Nov. 15, 1996.)
Operating cash flow, which represents earnings before interest, taxes,
depreciation and amortization (EBITDA), is a key indicator of the company's
operating performance.
- A 14 PERCENT INCREASE IN REVENUE, to $2.3 billion. Media Group's revenue
for third quarter 1996 was $2.0 billion.
Because Media Group participates in numerous joint ventures, the company uses
proportionate accounting to reflect its relative share of operating revenues
and expenses associated with these operations.
In a separate announcement today, U S WEST, Inc., said that it intends to
split U S WEST Media Group and U S WEST Communications Group (NYSE: USW) into
separate public companies sometime after mid-1998. Since November 1995, the
two groups traded as distinct classes of "target" stock of U S WEST, Inc.
"This is a great move for shareowners and customers of both groups," said
Richard McCormick, chairman and chief executive officer of U S WEST, Inc.
"Creating independent companies will make it easier for both businesses to
pursue exciting new opportunities."
-more-
Page 2
One of the highlights of the third quarter, according to Chuck Lillis, Media
Group president and chief executive officer, was the strong consumer response
to the company's high-speed data and Internet access service - MediaOne
Express.
"After passing the 10,000-customer mark in early September, we're on a pace to
double that base by the end of the year," Lillis said. "And now we're
expanding our data service to meet the growing needs of the business world."
MediaOne Express ended the third quarter with 13,000 customers. Earlier this
month, the company introduced high-speed data service in Los Angeles - its
eighth market.
MediaOne, the company's broadband communications business, this month
completed a successful high-speed data telecommuting trial with Digital
Equipment Corp. employees in the Boston area. Later this year, Digital will
become the first major business to roll out MediaOne Express on a large-scale
basis, proving that it can provide secure, high-speed connections for people
working at home.
Third quarter 1997 proportionate operating highlights - by line of business -
include:
- CABLE AND BROADBAND COMMUNICATIONS: MediaOne ended the third quarter with
more than 5.1 million subscribers, up 3 percent from third quarter 1996.
Overall, revenue from Media Group's domestic cable operations, including its
investment in Time Warner Entertainment, increased 8 percent, to $1.3 billion,
while operating cash flow was up 8 percent, to $404 million.
- INTERNATIONAL: Media Group's international customer base increased 71
percent, to 2.4 million, over third quarter 1996 levels. During the same
period, international revenues grew 38 percent, to $352 million, while the
ventures generated $40 million in operating cash flow. Much of the
international growth came from the company's wireless businesses: subscribers
more than doubled in Media Group's Central European ventures, while increasing
76 percent at One 2 One, the company's joint venture in the United Kingdom.
One 2 One now reaches 90 percent of the British population and enjoys a 10
percent share of the wireless market.
-more-
Page 3
- WIRELESS: Media Group's domestic cellular operations continued to deliver
strong results. Its subscriber base increased 32 percent, to 2.2 million
proportionate customers, and its operating cash flow 20 percent, to $135
million. Operating cash flow margin for the quarter increased 2 percentage
points, to more than 45 percent.
- DIRECTORIES: Media Group's directory publishing business, now called U S
WEST Dex, produced strong third-quarter revenue growth of 7 percent, helping
the company remain an industry leader. In addition, Dex increased its revenue
per customer by 5.1 percent in the third quarter.
Media Group's third quarter 1997 net loss was $144 million, of which $478
million relate to pre-tax, noncash items.
U S WEST Media Group, one of America's largest broadband communications
companies, is involved in domestic and international cable and telephony,
wireless communications, and directory and information services. For 1996,
Media Group had proportionate pro forma revenue of $8.1 billion.
Media Group is one of two major groups that make up U S WEST, a company in the
connections business, helping customers share information, entertainment and
communications services in local markets worldwide. U S WEST's other major
group, U S WEST Communications, provides telecommunications services in 14
western and midwestern states.
[ Safe Harbor statement: This document contains statements about expected
future events and financial results that are forward-looking and subject to
risks and uncertainties. For those statements, we claim the protection of the
safe harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. Discussion of factors that may affect future
results is contained in our recent filings with the Securities and Exchange
Commission.]
Page 4
U S WEST MEDIA GROUP - SELECTED OPERATING HIGHLIGHTS
ALL AMOUNTS SHOWN ARE PROPORTIONATE UNLESS OTHERWISE STATED
$ IN MILLIONS
CABLE AND BROADBAND COMMUNICATIONS
DOMESTIC
3Q97 GROWTH*
------ --------
TOTAL
Revenue $1,312 7.5%
Operating Cash Flow $ 404 7.7%
CONSOLIDATED CABLE
(EXCLUDING NEW SERVICES)
Homes Passed (000's) 8,449 2.4%
Multichannel Video
Subscribers (000's) 5,109 3.2%
Revenue $ 581 10.9%
Operating Cash Flow $ 250 5.5%
High Speed Data Customers 13.0 -
(000's)
INTERNATIONAL
3Q97 GROWTH*
------ --------
TOTAL
Customers (000's) 1,483 54.3%
Revenue $ 139 52.7
Operating Cash Flow $ 18 up $26
WIRELESS
DOMESTIC
3Q97 GROWTH
------- ----------
CELLULAR
POPs (millions) 20.3 1.5%
Subscribers (000's) 2,200 32.2%
Service Revenue $ 298 15.1%
Operating Cash Flow $ 135 19.5%
OCF as a % of service revenue 45.3% up 1.7 pp
Average revenue per customer $47.23 -12.7%
PRIMECO PERSONAL
COMMUNICATIONS
POPs (millions) 14.7 7.3%
Subscribers (000's) 63 -
INTERNATIONAL
3Q97 GROWTH
------- ----------
TOTAL
Customers (000's) 871 107.9%
Revenue $ 198 78.4%
Operating Cash Flow $ 23 up $22
ONE 2 ONE
Subscribers (000's) 404 76.0%
Market Share 10.4%
Coverage 90%
DIRECTORY AND INFORMATION SERVICES
DOMESTIC
3Q97 GROWTH
------- ----------
DIRECTORY PUBLISHING
Local Advertisers (000's) 481 -0.2%
Revenue $ 293 6.9%
Operating Cash Flow $ 151 10.2% **
Operating Cash Flow Margin 51.5% 1.5 pp **
Revenue per Advertiser $2,236 5.1%
INTERNATIONAL
3Q97 GROWTH
------- ----------
TOTAL
Revenue $ 15 -72.2%
Operating Cash Flow ($1) Down $6
* Growth rates are pro forma as if the Continental merger occurred January 1,
1996.
** Normalized for $25 million charge in 3Q96.