Bump surprising amid revamp

MediaOne Group, the third-largest cable operator in the U.S., on Wednesday reported a solid 24% increase in second-quarter operating results, despite undertaking several major strategic moves.

Second-quarter proportionate cash flow rose to $479 million from $386 million in 1997. A steady 12% increase in revs from continuing operations, up $1.7 billion from $1.5 billion, was also reported.

The earnings are surprise, considering several corporate structural moves. On June 12, the Englewood, Colo.-based company split from US West, a move which included the $4.75 billion transfer of its Dex directory business to US West.

Debt reduction

The transfer included $3.9 billion in debt reduction for MediaOne Group and $850 million in tax-free distribution of new US West stock to MediaOne shareholders, adding $1.38 of value to each MediaOne Group share upon the separation.

MediaOne Intl. grew proportionate operating cash flow by $44 million to $56 million, a 367% increase over last year’s $12 million.

Revenues totaled $361 million, a 36% increase over the second quarter of last year. The international business serves nearly 5.4 million cable, telephone and wireless customers.

In April, MediaOne Group merged its domestic wireless business into AirTouch Communications. The company received more than 59 million shares of AirTouch common stock, about $1.6 billion of AirTouch dividend-bearing preferred stock, and about $1.4 billion in debt reduction in exchange for its domestic wireless interest. The deal was valued at $5.9 billion upon closing.

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