November 3, 1998
Cathy Fowler, 303-858-3405
Steve Lang, 303-858-3406
MediaOne Group Operating Cash Flow Increases 32 Percent
-- International growth continues at a remarkable pace --
-- High-speed Internet and digital telephone service launched in five new U.S. cities --
ENGLEWOOD, Colo. -- MediaOne Group (NYSE: UMG) today reported 32 percent growth
in proportionate operating cash flow. Since the end of the second quarter, the
company has launched new services in five U.S. cities, offered a new video
packaging concept, added more than 14,000 new high-speed Internet customers, and
continued to enjoy phenomenal customer growth in its international businesses.
For the third quarter, MediaOne Group reported - on a proportionate
pro-forma basis:
o A 32 percent increase in operating cash flow, to $500 million. That compares to
$380 million for the same operations in the third quarter of 1997.
o A 16 percent increase in revenue, to $1.8 billion. MediaOne Group's equivalent revenue for 1997 was $1.6 billion.
Because MediaOne Group operates numerous joint ventures, the company uses
proportionate accounting to reflect its share of operating revenues and expenses
associated with these operations.
Pro-forma numbers are used to provide direct "apples to apples" comparisons
of operations quarter over quarter, as the company has streamlined the business
significantly in the last year. Streamlining included the completion of the
split from U S WEST Communications; the $4.75 billion transfer of U.S. directory
assets to the new U S WEST; and the $6 billion merger of U.S. wireless interests
into AirTouch.
-more-
MediaOne Group Third Quarter Earnings
Page 2
Operating cash flow, which represents earnings before interest, taxes,
depreciation and amortization, is a key indicator of the company's operating
performance.
"This has been another terrific quarter for MediaOne Group. From an
operations perspective, our international businesses continue to grow at a
remarkable pace as we introduce more new broadband and wireless services. And in
the U.S., we're rolling out high-speed Internet, telephone, advanced analog and
digital video services," Chairman and CEO Chuck Lillis said. "Financially, our
operating cash flow and revenue figures are strong, and we continue to maintain
a solid balance sheet."
MediaOne -- the U.S. broadband business
In the U.S., pro-forma broadband revenue was up 11.6 percent for the
quarter and 10.5 percent for the first nine months of the year. Pro-forma for
system swaps and sales, customer growth year over year was 1.3 percent.
Pro-forma core cable operating cash flow was $263 million, an increase of 6.5
percent over the same quarter last year.
MediaOne launched high-speed Internet service in one new city and digital
telephone service in four new cities since the end of the second quarter.
High-speed Internet customers increased 34 percent to nearly 55,000 since
June 30. Digital telephone service now is available to more than a quarter
million homes in Atlanta; Los Angeles; Boston; Richmond, Va.; and Jacksonville
and Pompano, Florida.
MediaOne launched NexTV service in September. NexTV is the company's new
multichannel video packaging plan designed to give customers greater
entertainment choices.
MediaOne Multimedia Ventures - the 25.51 percent stake in Time Warner
Entertainment
For the quarter, MediaOne Group's share of Time Warner Entertainment
revenues was $822 million, up 12.9 percent over third quarter 1997. MediaOne
Group's share of TWE's earnings before interest, taxes, depreciation,
amortization and other associated costs for third quarter was $210 million, 19.3
percent higher than the same quarter last year.
MediaOne owns a nearly 35 percent proportionate interest in a high-speed
Internet joint venture with Time Warner, Microsoft and Compaq. With Time
Warner's 73,000 Road Runner customers and MediaOne's nearly 55,000 MediaOne
Express customers, the joint venture is a leader in high-speed Internet
services.
-more-
MediaOne Group Third Quarter Earnings
Page 3
MediaOne International - the international broadband and wireless joint ventures
MediaOne International's pro-forma proportionate operating cash flow grew
nearly two and a half times over third quarter 1997, from $23 million for third
quarter 1997 to $79 million for the same period this year. Pro-forma
proportionate revenues were $363 million for the quarter, up more than 35
percent over the same quarter last year.
MediaOne International continues to be a significant force in European and
Asian telecommunications. This quarter included the completion of the Telewest
merger with General Cable, as well as impressive year-over-year growth in the
wireless arena, including an 83 percent increase in wireless customers at One 2
One in the United Kingdom and a 79 percent increase in Central European wireless
customers. Overall, the international ventures are providing 7.1 million cable
television, telephone and wireless services to customers in Europe and Asia.
MediaOne Group (NYSE: UMG) is one of the world's largest broadband
communications companies, bringing the power of broadband and the Internet to
more than seven million customers in the United States, Europe and Asia. The
company also has interests in some of the fastest-growing wireless
communications businesses outside the U.S., serving more than three million
customers. For 1997, the businesses now part of MediaOne Group produced $6.6
billion in proportionate revenue.
[Safe Harbor statement: This document contains statements about expected future
events and financial results that are forward-looking and subject to risk 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.]
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Note: This release and the financial statements will be available on our website
after 7:30 a.m. (MST): www.mediaonegroup.com
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