Cox Communications Announces First Quarter Financial Results for 2000 - Company Financial Information

Cambridge Telcom Report, May 1, 2000

Cox Communications, Inc. (NYSE: COX) Tuesday reported financial results for the three months ended March 31, 2000.

"Our first quarter results give us a strong indication that we are on our way to achieving our financial targets by year-end," commented Jim Robbins, President and Chief Executive Officer. "Our total pro forma revenues increased 11% over 1999, while pro forma operating cash flow grew 8%. We also achieved strong growth with our advanced digital communications services, ending the quarter with more than 840,000 new-service revenue generating units (RGUs)."

Robbins continued, "We are very pleased to have completed the final of four major acquisitions announced in 1999, through which we have reached the 6 million customer milestone and have built a substantial base for continued growth and success. Now, Cox has a full suite of highly advanced telecommunications services and a large number of customers who will benefit from the power of our broadband technology and the choice and convenience it brings to their lives."

Robbins noted that during the first quarter, Cox continued to monetize certain non-strategic investments and reinvest the proceeds to further strengthen the company's core operations, selling a portion of its Sprint PCS stake and its interest in Flextech plc. Total proceeds from these transactions were approximately $1.3 billion.

PRO FORMA OPERATING RESULTS The pro forma operating results discussed below give effect to the following transactions as though they had occurred on January 1, 1999:

-- the August 1999 TCA Cable TV, Inc. merger;

-- the August 1999 exchange of selected cable systems with MediaOne;

-- the October 1999 acquisition of cable systems from Media General, Inc.;

-- the October 1999 reorganization of Cox's partnership with Time Warner Entertainment Company, L.P., under which Cox obtained control of the cable system serving Fort Walton Beach, Florida, that Cox had managed since September 1992;

-- the January 2000 acquisition of cable systems from Multimedia Cablevision, Inc., a subsidiary of Gannett Co., Inc.; and

-- the March 2000 acquisition of cable systems from AT&T Corp. subsidiaries serving customers in Tulsa, Oklahoma and Baton Rouge, Louisiana, which also included the acquisition of Peak Cablevision, LLC and the remaining 20% ownership interest in a partnership in which Cox initially acquired an 80% interest through the TCA merger.

Pro forma three months ended March 31, 2000 compared with pro forma three months ended March 31, 1999

Total revenues for the three months ended March 31, 2000 were $846.3 million, an 11% increase over revenues of $765.6 million for the three months ended March 31, 1999. Total cable revenues for the first quarter of 2000 increased 5% to $778.3 million compared to the same period in 1999. Basic customers were 6,136,434, a 2.1% increase over March 31, 1999 after adjusting for the above transactions.

Complete basic revenues for the first quarter of 2000 increased 8% over 1999 to $581.7 million due to basic and digital customer growth and rate increases implemented primarily in the fourth quarter of 1999 and first quarter of 2000. The rate increases are a result of increased programming costs and inflation as well as increased channel availability.

Pay-per-view revenues were $23.7 million, down 28% from the same period in 1999 due to the Holyfield/Lewis, Tyson/Botha and De La Hoya/Quartey national boxing events during the first quarter 1999. Advertising revenues increased 23% to $74.0 million and include the effects of continued growth in local and national advertising sales into 2000.

Data revenues for the first quarter of 2000 increased to $30.2 million from $11.4 million in 1999 due to growth in Cox's residential high-speed data service. Telephony revenues for the first quarter of 2000 increased to $37.7 million from $16.2 million in 1999 due to growth in both residential and commercial telephony offerings.

Programming costs were $214.2 million for the first quarter of 2000, an increase of 6% over the same period in 1999 due to basic and digital customer growth, January 2000 programming rate increases and channel additions. Selling, general and administrative expenses for the first quarter of 2000 increased 17% to $306.5 million due primarily to costs associated with the continued rollout of digital video, high-speed data and telephony services, and incremental and non-recurring integration expenses associated with the cable systems acquired during 1999 and 2000.

Pro forma operating cash flow increased 8% to $325.5 million for the first quarter of 2000. The pro forma operating cash flow margin (pro forma operating cash flow as a percentage of revenues) for the current quarter was 38.5%, a decrease from 39.5% for the first quarter of 1999 due primarily to costs associated with the continued rollout of digital video, high-speed data and telephony services, and incremental and non-recurring integration expenses associated with the cable systems acquired during 1999 and 2000.