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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 26, 2000
MediaOne Group, Inc.
(Exact name of registrant as specified in its charter)
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A Delaware Corporation Commission File Number IRS Employer Identification No.
(State of incorporation) 1-8611 84-0926774
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188 Inverness Drive West
Englewood, Colorado 80112
(Address of principal executive offices)
(303) 858-3000
(Registrant's telephone number, including area code)
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Item 5. Other Events
On April 26, 2000, MediaOne Group, Inc. released its first quarter 2000 earnings
results. The release and financial statements are attached hereto as Exhibits.
Item 7. Exhibits
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Exhibit Description
27 Financial Data Schedule
99 Press Release issued April 26, 2000 concerning the
earnings results of MediaOne Group, Inc. for the
quarter ended March 31, 2000.
99.1 Proportionate Results Highlights of MediaOne Group, Inc.
for the three months ended March 31, 2000 and 1999,
filed in connection with the Press Release dated April
26, 2000.
99.2 Pro Forma Consolidated Domestic Cable Highlights of
MediaOne Group, Inc. for the three months ended March
31, 2000 and 1999, filed in connection with the Press
Release dated April 26, 2000.
99.3 Pro Forma Key Operating Statistics - Domestic Cable -
of MediaOne Group, Inc. for the quarters ended March 31,
2000, December 31, 1999 and March 31, 1999, filed in
connection with the Press Release dated April 26, 2000.
99.4 Consolidated Operations Highlights - As Reported of
MediaOne Group, Inc. for the three months ended March
31, 2000 and 1999, filed in connection with the Press
Release dated April 26, 2000.
99.5 Earnings per Share Highlights of MediaOne Group, Inc.
for the three months ended March 31, 2000 and 1999,
filed in connection with the Press Release dated April
26, 2000.
99.6 Consolidated Revenues and Operating Cash Flow
Highlights - As Reported - of MediaOne Group, Inc. for
the three months ended March 31, 2000 and 1999, filed in
connection with the Press Release dated April 26, 2000.
99.7 Condensed Consolidated Balance Sheets - As Reported, for
MediaOne Group, Inc. as of March 31, 2000 and December
31, 1999, filed in connection with the Press Release
dated April 26, 2000.
-2-
99.8 Supplementary Consolidated Domestic Cable Highlights -
As Reported, of MediaOne Group, Inc. for the quarter
ended March 31, 2000 and for the four quarters and year-
to-date of 1999, filed in connection with the Press
Release dated April 26, 2000.
99.9 Supplementary Consolidated Domestic Cable Highlights -
Pro Forma, of MediaOne Group, Inc. for the quarter ended
March 31, 2000 and the four quarters and year-to-date of
1999, filed in connection with the Press Release dated
April 26, 2000.
</TABLE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MediaOne Group, Inc.
/s/ STEPHEN E. BRILZ
By:___________________________________
Stephen E. Brilz
Assistant Secretary
Dated: April 28, 2000
-3-
April 26, 2000
Cathy Fowler, 303-858-3405
Becky Winning, 303-858-3677
MediaOne(R) Group Chalks Up Another Successful Quarter;
Continues to Prepare for the Merger into AT&T
ENGLEWOOD, Colo. -- MediaOne Group (NYSE: UMG) today reported strong growth
across all three of its main product lines. The company added a total of 138,000
new telephone, digital video and high-speed data (Internet) subscribers in the
U.S. in the first quarter; 340,000 new subscribers since the end of the same
quarter last year.
MediaOne Group reported $1.2 billion in consolidated net income for the quarter,
including gains realized from sales of international investments. Consolidated
operating cash flow for the quarter was $239 million, an increase of 13 percent
over first quarter 1999. Consolidated revenue increased 6 percent, to $706
million, over first quarter 1999.
"This business is on a terrific track, with especially impressive customer
growth in telephone, digital video and high-speed data. I'm proud of our
employees for continuing to focus on operations even as we near the completion
of our merger into AT&T," said Chuck Lillis, chairman and chief executive
officer of MediaOne Group. "We've made excellent progress in deciding the
organizational structure and top leadership of the new AT&T Broadband, and we
expect the merger to be completed in the near future."
MediaOne - the U.S. broadband business
MediaOne's quarterly operating cash flow was $261 million, up 10 percent over
first quarter 1999 on a pro-forma basis. Revenue was $706 million, a 9 percent
pro-forma increase over the same period last year.
Customers continued to show enthusiasm for new high-speed data, telephone and
digital video services. The company ended the quarter with 278,000 high-speed
data subscribers, more than double the first quarter 1999 number. Also at
quarter's end, some 94,000 customers subscribed to telephone services, more than
a five-fold increase over first quarter 1999. Those 94,000 telephone customers
subscribed to more than 126,000 lines. The number of digital video customers
nearly doubled since the end of 1999, to 108,000. Year over year, that's an
increase of nearly 100,000 customers.
- more -
-4-
MediaOne Group First Quarter 2000 Earnings, Page 2
MediaOne Multimedia Ventures - the stake in Time Warner Entertainment
For the quarter, MediaOne Group's share of Time Warner Entertainment's reported
revenue was $841 million, up 12 percent on a pro-forma basis over first quarter
1999. MediaOne Group's share of TWE's reported earnings before interest, taxes,
depreciation, amortization and other associated costs for the first quarter was
$216 million, up 15 percent on a pro-forma basis over the same period last year.
MediaOne International - the international broadband and wireless joint ventures
In April, the company announced completion of the sale of its stake in Japanese
broadband company TITUS to Microsoft. MediaOne International announced in March
an agreement to sell its Russian wireless interests to MCT Corp. Sales completed
during the quarter included Hungarian and Polish wireless stakes and Singapore
broadband interests. These moves are part of the company's plan to sell a
significant portion of its international portfolio in preparation for the merger
into AT&T.
MediaOne Group will discuss these results on a call with analysts at 11 a.m. EDT
on April 27. Those who wish to listen to a Webcast of the call may do so at:
http://www.mediaonegroup.com. A replay of the call will run until 8 p.m. EDT on
May 4.
MediaOne Group (NYSE: UMG) is one of the world's largest broadband
communications companies, bringing the power of broadband and the Internet to
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. For 1999, MediaOne Group produced $7.8 billion in proportionate revenue. On
May 6, 1999, the company entered into an agreement to merge with AT&T.
NOTE: 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 during the past year.
Operating cash flow, which represents earnings before interest, taxes,
depreciation and amortization, is a key indicator of the company's operating
performance.
[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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Contents
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Page
Proportionate
Proportionate Results 4
Domestic Cable
Consolidated Pro Forma
Domestic Cable Results 5
Statistics
Pro Forma Key Operating Statistics 6
Consolidated
Consolidated Operations 7
Earnings Per Share 8
Consolidated Revenues and Operating
Cash Flow 9
Condensed Consolidated Balance Sheets 10
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MediaOne Group, Inc.
Proportionate Results Highlights (1)
(UNAUDITED)
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Three
Months Ended Pro
March 31, Forma (2)
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Dollars in
millions 2000 1999 % %
- - --------------------------------------------------------------------------
Proportionate Revenue
MediaOne $ 706 $ 654 8.0% 9.1%
Multimedia
Ventures (3) 841 748 12.4 12.4
Corporate
& other - 1 (100.0) (100.0)
--------------------------------------
$1,547 $1,403 10.3% 10.8%
======================================
Proportionate Operating Cash Flow(4)
MediaOne $ 261 $ 241 8.3% 10.1%
Multimedia
Ventures (3) 216 243 (11.1) 14.9
Corporate
& other (21) (28) 25.0 25.0
--------------------------------------
$ 456 $ 456 - 14.9%
======================================
</TABLE>
- - -------------------------------------------------------------------------
(1) Excludes results for the international cable, wireless and
directory operations due to the disposition of a significant
portion of the international portfolio. International overhead
costs associated with ventures are reported in Corporate and
other.
(2) Results reflect pro forma adjustments for acquisitions,
dispositions and other asset transactions. Total pro forma
revenue would be $1,547 and $1,396 for the three months ended
March 31, 2000 and 1999, respectively. Total pro forma
operating cash flow would be $456 and $397 for the three months
ended March 31, 2000 and 1999, respectively.
(3) Includes 25.51% of Time Warner Entertainment's reported results.
(4) Operating cash flow represents earnings before interest, taxes,
depreciation and amortization.
- - ---------------------------------------------------------------------
-6-
MediaOne Group, Inc.
Consolidated Domestic Cable Highlights-Pro Forma (1)
MediaOne
(UNAUDITED)
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Three
Months Ended
March 31,
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Dollars in
millions 2000 1999 Percent
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Video Revenues
Basic cable $ 459 $ 435 5.5%
Premium 83 81 2.5
Pay-per-view 14 22 (36.4)
Advertising 54 41 31.7
Equipment & installation 49 47 4.3
Other (2) 3 (166.7)
------------------------------
Total Video
Revenues 657 629 4.5
Telephone and High Speed Data 49 18 172.2
------------------------------
Total Broadband
Revenue $ 706 $ 647 9.1%
==============================
Operating Cash Flow(2)
Video (3) $ 265 $ 258 2.7%
Telephone and High Speed Data (4) (21) 81.0
------------------------------
Total Operating
Cash Flow $ 261 $ 237 10.1%
==============================
</TABLE>
- - ---------------------------------------------------------------------------
(1) Results reflect pro forma adjustments for acquisitions and
dispositions.
(2) Operating cash flow represents earnings before interest, taxes,
depreciation and amortization. Includes spending initiatives
(e.g. systems improvements, call center consolidations, etc.)
(3) Includes Year 2000 costs of $7 for the three months ended
March 31, 1999.
- - ---------------------------------------------------------------------------
-7-
MediaOne Group, Inc.
Key Operating Statistics- Pro Forma (1)
For the Quarter Ended
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In thousands, except Mar 31, Dec 31, Mar 31,
dollar amounts 2000 1999 1999
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- - --------------------------------------------------------------------------
OPERATING STATISTICS- DOMESTIC CABLE
- - ----------------------------------------
MediaOne Domestic Cable
Statistics
- - ----------
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Homes Passed 8,621 8,560 8,441
Basic Video Customers 4,984 4,989 4,926
Basic Video Customer
Growth (Y/Y) 1.2% 1.7% 1.2%
Basic Video Penetration 57.8% 58.3% 58.4%
Digital Video Customers 108 56 9
High Speed Data Customers 278 220 114
Two-Way Market
Ready Penetration 5.5% 4.8% 3.9%
Telephone Customers 94 66 17
Telephone Lines 126 88 22
Network Upgraded to
750 MHz. Two-Way 79% 76% 55%
Results Per Customer
- - ----------------------
Video Monthly
Revenue per Customer $ 43.97 $ 43.19$ 42.58
Total Monthly Broadband
Revenue per Customer $ 47.24 $ 45.04$ 43.78
Video EBITDA Margin
(with Year 2000 costs) 40.3% 40.0% 41.0%
Total EBITDA Margin 37.0% 35.9% 36.6%
</TABLE>
- - --------------------------------------------------------------------------
(1) Results reflect pro forma adjustments for acquisitions,
dispositions and other asset transactions.
- - --------------------------------------------------------------------------
-8-
MediaOne Group, Inc.
Consolidated Operations Highlights - As Reported
(UNAUDITED)
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Three Months Ended
March 31,
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Dollars in millions 2000 1999
- - --------------------------------------------------------------------------
REVENUES $ 706 $ 665
Cost of sales 296 269
Selling, general and admin. 171 185
-------- --------
OPERATING CASH FLOW (1) 239 211
Depreciation & amortization (379) (250)
Interest expense, minority
guarantee, other (196) (145)
Equity gains (losses) in
unconsolidated ventures (71) (115)
Gains on sales of investments (2) 2,184 194
Merger related costs (19) (15)
Other income (expense) 155 (28)
Income tax benefit (expense) (755) 37
-------- --------
NET INCOME (LOSS) 1,158 (111)
Preferred dividends and accretion (1) (14)
-------- --------
EARNINGS (LOSS) AVAILABLE
FOR COMMON STOCK $ 1,157 $ (125)
======== ========
</TABLE>
- - --------------------------------------------------------------------------
(1) Operating cash flow represents earnings before interest, taxes,
depreciation and amortization.
(2) Includes gains of $1,993 and $124 on the sale of various
international investments for the three months ended
March 31, 2000 and 1999, respectively.
- - --------------------------------------------------------------------------
-9-
MediaOne Group, Inc.
Earnings Per Share Highlights
(UNAUDITED)
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Three Months Ended
Mar 31,
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2000 1999
- - --------------------------------------------------------------------------
Earnings (Loss)Per Share -
As Reported
Average Shares
Outstanding (millions)
Basic 642.9 603.8
Diluted 651.1 603.8
Basic Earnings (Loss)
per common share $ 1.80 $ (0.21)
Diluted Earnings (Loss)
per common share $ 1.78 $ (0.21)
- - --------------------------------------------------------------------------
Common Shares (millions)
Actual Shares Outstanding 638.9 604.0
- - --------------------------------------------------------------------------
Normalized Earnings (Loss) Per Share
Basic EPS $ 1.80 $ (0.21)
Adjustment for One Time
Unusual Transactions
Gains on Sales of
Investments (2.09) (0.20)
Primestar Loss - 0.07
Merger Costs 0.02 0.03
-------- --------
Normalized Basic EPS $ (0.27) $ (0.31)
======== ========
</TABLE>
- - --------------------------------------------------------------------------
-10-
MediaOne Group, Inc.
Consolidated Revenues and Operating Cash Flow Highlights- As Reported
(Unaudited)
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Three
Months Ended
March 31,
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Dollars in millions 2000 1999 Percent
- - --------------------------------------------------------------------------
Consolidated Revenues
MediaOne $ 706 $ 654 8.0%
Corporate & other - 11 (100.0)
--------------------------
Total $ 706 $ 665 6.2%
==========================
Consolidated Operating
Cash Flow (1)
MediaOne $ 261 $ 241 8.3%
Corporate & other (22) (30) 26.7
--------------------------
Total $ 239 $ 211 13.3%
==========================
</TABLE>
- - ---------------------------------------------------------------------
(1) Operating cash flow represents earnings before interest, taxes,
depreciation and amortization.
- - ---------------------------------------------------------------------
-11-
MediaOne Group, Inc.
Condensed Consolidated Balance Sheets- As Reported
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(UNAUDITED) Mar 31, Dec 31,
Dollars in millions 2000 1999
- - -------------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 7,540 $ 7,471
Accounts and notes receivable, and other 534 649
----------------------------
8,074 8,120
----------------------------
Property, Plant and equipment, - net 5,369 5,090
Investments:
Time Warner Entertainment 2,609 2,597
Vodafone Group 9,725 8,718
International ventures 820 938
----------------------------
13,154 12,253
----------------------------
Intangible and other assets - net 14,481 14,323
----------------------------
Total $ 41,078 $ 39,786
============================
- - -------------------------------------------------------------------------
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt $ 1,505 $ 1,506
Other current liabilities 1,973 2,739
----------------------------
3,478 4,245
----------------------------
Long-term debt:
Exchangeable Notes (PIES) 4,699 4,248
Other 4,420 4,425
----------------------------
9,119 8,673
----------------------------
Deferred income taxes, credits and other 8,347 7,879
Minority interest in Centaur Funding 1,115 1,113
Company-obligated mandatorily redeemable
preferred securities of subsidiary trust
holding solely Company-guaranteed
subordinated debentures 1,060 1,060
Preferred stock subject to
mandatory redemption (Series E) 50 50
Shareholders' equity:
Common shares 10,943 11,448
Retained earnings 5,280 4,123
Accumulated other comprehensive income 1,686 1,195
----------------------------
17,909 16,766
----------------------------
Total $ 41,078 $ 39,786
============================
</TABLE>
- - -------------------------------------------------------------------------
-12-
MediaOne Group, Inc.
Supplementary Consolidated Domestic Cable Highlights-As Reported
(Dollars in millions)
Unaudited
- - -----------------------------------------------------------------------------
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2000 1999
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Q1 YTD Q4 Q3 Q2 Q1
- - -----------------------------------------------------------------------------
Video Revenues
Basic cable $ 459 $ 1,774 $ 447 $ 442 $ 446 $ 439
Premium 83 328 82 82 82 82
Pay-per-view 14 73 17 19 15 22
Advertising 54 204 61 50 51 42
Equip & instal 49 190 49 49 46 46
Other (2) 3 (2) 3 1 1
---- ----- ---- ---- ---- ----
Total Video Revenues 657 2,572 654 645 641 632
Telephone and
High Speed Data 49 114 39 29 24 22
---- ----- ---- ---- ---- ----
Total Broadband Revenue $ 706 $ 2,686 $ 693 $ 674 $ 665 $ 654
==== ===== ==== ==== ==== ====
Operating Cash Flow (1)
Video (2) $ 265 $ 1,034 $ 262 $ 253 $ 259 $ 260
New Products (4) (54) (13) (11) (11) (19)
---- ------ ---- ---- ---- ----
Total Operating Cash
Flow $ 261 $ 980 $ 249 $ 242 $ 248 $ 241
==== ===== ==== ==== ==== ====
Capital Expenditures $ 459 $ 1,960 $ 545 $ 527 $ 494 $ 394
</TABLE>
- - -----------------------------------------------------------------------------
(1)Operating cash flow represents earnings before interest, taxes,
depreciation and amortization. Includes spending initiatives
(e.g. systems improvements, call center consolidations, etc.)
(2)Includes Year 2000 costs of $18 for the twelve months ended
December 31, 1999, comprised of $2, $4, $5, and $7 for the
fourth, third, second and first quarters of 1999, respectively.
- - -----------------------------------------------------------------------------
-13-
MediaOne Group, Inc.
Supplementary Consolidated Domestic Cable Highlights-Pro Forma (1)
(Dollars in millions)
Unaudited
- - ---------------------------------------------------------------------
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2000 1999
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Q1 YTD Q4 Q3 Q2 Q1
- - -----------------------------------------------------------------------------
Video Revenues
Basic cable $ 459 $ 1,766 $ 445 $ 443 $ 443 $ 435
Premium 83 327 83 81 82 81
Pay-per-view 14 74 16 20 16 22
Advertising 54 201 61 50 49 41
Equip & instal 49 194 49 51 47 47
Other (2) 6 1 - 2 3
---- ----- ---- ---- ---- ----
Total Video Revenues 657 2,568 655 645 639 629
Telephone and
High Speed Data 49 110 39 29 24 18
---- ----- ---- ---- ---- ----
Total Broadband Revenue $ 706 $ 2,678 $ 694 $ 674 $ 663 $ 647
==== ===== ==== ==== ==== ====
Operating Cash Flow (2)
Video (3) $ 265 $ 1,032 $ 262 $ 253 $ 259 $ 258
New Products (4) (56) (13) (11) (11) (21)
---- ----- ---- ---- ---- ----
Total Operating Cash
Flow $ 261 $ 976 $ 249 $ 242 $ 248 $ 237
==== ===== ==== ==== ==== ====
</TABLE>
- - -----------------------------------------------------------------------------
(1)Results reflect pro forma adjustments for acquisitions and
dispositions.
(2)Operating cash flow represents earnings before interest, taxes,
depreciation and amortization. Includes spending initiatives
(e.g. systems improvements, call center consolidations, etc.)
(3)Includes Year 2000 costs of $18 for the twelve months ended
December 31, 1999, comprised of $2, $4, $5, and $7 for the
fourth, third, second and first quarters of 1999, respectively.
- - -----------------------------------------------------------------------------
-14-
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<ARTICLE> 5
<LEGEND>
Financial Data Schedule
</LEGEND>
<CIK> 0000732718
<NAME> MediaOne Group, Inc.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 7,540
<SECURITIES> 66
<RECEIVABLES> 374
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 8,074
<PP&E> 7,217
<DEPRECIATION> 1,849
<TOTAL-ASSETS> 41,078
<CURRENT-LIABILITIES> 3,478
<BONDS> 9,119
1,115
0
<COMMON> 10,943
<OTHER-SE> 6,966
<TOTAL-LIABILITY-AND-EQUITY> 41,078
<SALES> 706
<TOTAL-REVENUES> 706
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 846
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 147
<INCOME-PRETAX> 1,913
<INCOME-TAX> 755
<INCOME-CONTINUING> 1,158
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,157
<EPS-BASIC> 1.80
<EPS-DILUTED> 1.78
</TABLE>
