content: SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, DC 20549
                                      FORM 8-K
                                   
  
                                   Current Report
                       Pursuant to Section 13 or 15 (d) of the
                          Securities Exchanges Act of 1934
  
  
  
  
                          Date of Report: February 24, 1998
  
  
  
  
  
  
                         Teleport Communications Group Inc.
               (Exact Name of Registrant as specified in its Charter)
  
  
  
  
  Delaware                            0-20913                   13-3173139
  --------------------------------------------------------------------------------
  (State or Other              (Commission File Number)        (IRS Employer
  Jurisdiction of                                            Identification No.)
  Incorporation)                          
  
  
  
  437 Ridge Road, Executive Building 3, Dayton, New Jersey              08810
  --------------------------------------------------------------------------------
  (Address of Principal Executive Offices)                            (Zip Code)
  
  
  
  
  Registrant's Telephone Number, Including Area Code:              (732) 392-2000
  
  
  
  <PAGE>
  
  
  
  Item 5. Other Events
  The Registrant issued the following Press Release on February 24, 1998:
  
       Teleport  Communications Group Inc.  (TCG)  reported  fourth  quarter 1997
  revenues of $150.4 Million.  Revenues for the year 1997 were $494.3 Million.
  For immediate release:
  Dayton, N.J. February 24, 1998
  
  Teleport  Communications Group Inc.  (Nasdaq/NM:TCGI)  reported revenues for the
  fourth quarter ended December 31, 1997 of $150.4  million,  a growth rate of 72%
  compared  to the same  period in 1996.  Revenues  for the year 1997 were  $494.3
  million, a 74% increase over 1996.
  
  Fourth quarter 1997  Recurring  EBITDA  (EBITDA* prior to a one-time  charge for
  in-process research and development) was $18.3 million, an increase of 195% from
  the fourth quarter 1996. As a percentage of revenues, recurring EBITDA was 12.2%
  compared  to 7.1% a year ago.  Including  the $22  million  one-time  charge for
  in-process  research  and  development  related  to  CERFnet,  EBITDA was $(3.7)
  million.
  
  For the year 1997,  recurring  EBITDA was 9.1% of  revenues,  or double the
  level of 4.4% of revenues for the year 1996.
  
  Annualized monthly recurring revenue for December 1997 was $620 million, an
  increase of 88% over the same period in 1996.
  
  "We are very  pleased to report  that for the year 1997,  revenues  grew 74% and
  recurring  EBITDA  increased  by 256%,"  said Bob  Annunziata,  TCG's  Chairman,
  President and CEO.  "This was the highest  revenue  growth rate in the past five
  years and it was also on an expanding  revenue base. The results  underscore the
  vast  opportunities  for our company with multiple  strategies for accessing the
  customer  and a  wholesale  and retail  approach to  customer  segmentation  and
  service offerings."
  
                         Three months ended          Twelve months ended
  ($ in millions)       12/31/97    12/31/96       12/31/97      12/31/96
                       ----------   --------      ----------     --------
  Revenues              $  150.4    $  87.4        $ 494.3        $ 283.4
  Recurring EBITDA      $   18.3    $   6.2        $  44.9        $  12.6
  
  *EBITDA  is  defined  as  earnings   before   interest,   taxes,   depreciation,
  amortization, and equity in losses of unconsolidated affiliates.
  
  Note: All results  (financial and  operational)  presented in this release which
  include  results from the first six months of 1996 are  presented on a pro forma
  basis to reflect the TCG  Reorganization,  described in TCG's  Annual  Report on
  Form 10-K, as amended, for the year ended December 31, 1996.
  <PAGE>
  
  Fourth Quarter 1997 Highlights:
  
  Revenues:
  Compared to third  quarter  1997,  total  revenues  for the fourth  quarter 1997
  increased  by $19  million  or 14.5%.  Significant  growth  areas in the  fourth
  quarter include higher growth in dedicated  services and Internet and high speed
  data  services.  Dedicated  services  grew 21%,  switched  services grew 7%, and
  Internet and high speed data  services  grew 18% compared to the third  quarter.
  Higher  dedicated  services  revenues  in  the  fourth  quarter  1997  reflected
  increased demand from large customers for TCG's dedicated services.
  
  Compared  to  fourth  quarter  1996,  switched  service  revenues  grew  80% and
  dedicated  service  revenues  grew 58%.  The trend of higher  growth in switched
  services  compared to dedicated  services has resulted in a shift in the revenue
  mix.  In the  fourth  quarter  1997,  dedicated  services  were 51% of  revenues
  compared to 56% of revenues in the fourth quarter 1996. Switched revenues in the
  fourth  quarter  1997 were 43% of  revenues  compared  to 41% of revenues in the
  fourth  quarter  1996.  Internet  and high speed data grew by over 300% from the
  fourth quarter 1996.
  
  The investment in sales force and sales support continued in the fourth quarter.
  During the fourth quarter 1997, TCG added 46 sales employees to reach a total of
  689. For the year 1997, TCG's sales staff increased by 246 employees or 56% from
  443 at year end 1996.
  
  Operating results:
  The  significant  growth of 55% in  recurring  EBITDA from $11.8  million in the
  third quarter 1997 to $18.3  million in the fourth  quarter 1997 was a result of
  lower growth,  relative to revenues, in both operating expenses and SG&A (sales,
  general and administrative)  expenses.  Operating expenses in the fourth quarter
  were  55% of  revenues  compared  to 57% in the  third  quarter.  SG&A  expenses
  improved to 32% of revenues from 34% in the third quarter.
  
  Compared to fourth  quarter  1996,  the  reductions  in operating  expenses as a
  percentage of revenues were more  significant with an improvement of a full four
  percentage  points from 59% of revenues in the fourth quarter 1996 to 55% in the
  fourth quarter 1997.
  
  During  December,  1997, TCG received the appraisal  concerning the value of the
  acquired net assets and the acquired  in-process  research  and  development  of
  CERFnet Services, Inc. from the independent consultants, which placed a value on
  the acquired in-process research and development of $22 million.
  This amount was recorded in the fourth quarter 1997.
  
  The net loss for the fourth  quarter  1997 was $72.5  million or $0.42 per share
  versus a loss of $43.5 million or $0.27 per share in the fourth quarter of 1996.
  The  additional  losses  include a $22 million  one-time  charge for  in-process
  research and development and additional depreciation.
  <PAGE>
  
  Highlights for the year ended December 31, 1997:
  
  Revenues:
  Total revenues for the year 1997 were $494.3 million, an increase
  of $210.9 million or 74% from the year 1996.
  
  Switched  service revenues for the year 1997 increased by 90% from the year 1996
  to  $215.2  million  and  44% of  total  revenues.  Dedicated  service  revenues
  increased 56% to $252.4 million and 51% of total revenues.
  
  Internet  revenues  were added in  February  of 1997 as a result of the  CERFnet
  acquisition.  Combined  with high  speed  data,  the two lines of  business  now
  comprise 4.5% of total revenues.
  
  For the year 1997,  TCG doubled the total number of access lines  served.  Total
  access  lines served at the year end 1997 were  282,700,  an addition of 144,100
  lines during the year.
  
  Voice grade  equivalents  (VGEs) is a measurement of all circuits in service and
  at year end 1997,  TCG was serving 7.4 million VGEs compared to 4.4 million VGEs
  at year end  1996.  Billed  minutes  in the  December  quarter  1997  were at an
  annualized run rate of 10.6 billion  minutes.  Total minutes billed for the year
  1997 was 7.7 billion minutes, over three times the 2.5 billion minutes billed in
  1996.
  
  Operating results:
  
  As a percentage of revenues,  operating  expenses  declined from 61% in the year
  1996 to 57% in 1997.  Although TCG  continued to invest during 1997 in sales and
  marketing to capitalize on the opportunities in the marketplace,  SG&A continued
  to improve from 35% of revenues in 1996 to 34% of revenues in 1997.  At year end
  1997,  total  employees were 3,059,  an increase 1,009  employees from the 2,050
  employees at year end 1996.
  
  Recurring  EBITDA for the year 1997  increased by $32.3 million or 256% from the
  year 1996.  Recurring  EBITDA margins improved to 9.1% in 1997, which was double
  the 4.4% of revenues in 1996.
  
  Net loss for the year 1997 was $222.7  million or $1.34 per share  compared to a
  loss of $126.6 million or $0.86 in 1996. Additional losses in 1997 were a result
  of higher  depreciation  costs, a one-time  charge for  in-process  research and
  development related to the CERFnet acquisition and higher interest expenses.
  <PAGE>
  
  
  Network Expansion:
  
  For the 1997 fourth quarter,  capital expenditures totaled $165 million and year
  to date capital  expenditures  totaled $501 million.  During the fourth quarter,
  TCG added 8 new markets and brings total  Metropolitan  Statistical Areas (MSAs)
  served by TCG to 65. Kansas City  FiberNet  will add an  additional  MSA and ACC
  Corp.  will add an additional 18 MSAs.  TCG's total MSAs served will increase to
  84 MSAs after the completion of the acquisitions.
  
  Equally  important,  357 on-net  buildings  were added during the fourth quarter
  1997,  which brings the total number of on-net  buildings to 4,638. For the year
  1997, 1,789 on-net buildings were added.  Total buildings served were 13,514, an
  increase of 5,769 buildings or 74% from year end 1996.
  
  The  following  is a comparison  of TCG's  network  statistics  at year end 1997
  versus year end 1996.
  
                                      12/31/97          12/31/96          Increase
  Route Miles                           9,474             6,744             2,730
  Fiber Miles                         491,097           346,039           145,058
  Voice-Grade Equivalents           7,350,527         4,428,770         2,921,757
  Buildings:        On-net              4,638             2,849             1,789
                    Off-net             8,876             4,896             3,980
                    ---------           -----          --------             -----
  Total Buildings                      13,514             7,745             5,769
  Local Serving Offices                   152               102                50
  Digital Voice Switches Installed         35                25                10
  
  During the fourth  quarter 1997, a new switch was installed in San Francisco and
  in Atlanta.
  
  Switched  services  revenue  was  recorded  for the first time in  Portland  and
  Cleveland during the fourth quarter and is serviced by switches installed during
  the third  quarter 1997.  Internet  revenues were recorded for the first time in
  Omaha and Salt Lake City.
  
  Mergers and Transactions:
  
  On November 26, 1997, TCG announced a definitive  agreement to acquire ACC Corp.
  in a stock for stock merger.  To date,  the waiting  period under the Hart Scott
  Rodino  has  been  expired  and we have  received  approval  from the FCC on the
  transfer of ACC Corp.'s International Operating Authority to TCG. Approvals from
  13 of 14 states in the U.S. and all foreign  approvals  have been  secured.  The
  merger is subject to an affirmative vote of a majority of the outstanding shares
  of ACCC common stock. TCG continues to move ahead on completing the transaction.
  
  <PAGE>
  
  On December 2, 1997, TCG announced a definitive  agreement to acquire the assets
  of Kansas  City Fiber  Network,  L.P.  The  transaction  is  pending  regulatory
  approval.
  
  On January 8, 1998, TCG and AT&T  announced a definitive  agreement for the
  merger of TCG with AT&T in a stock-for-stock  transaction at an exchange rate of
   .943 shares of AT&T for every share of TCG.  Requests for  regulatory  approvals
  have been filed.
  
  As a result of the  definitive  agreement  reached with AT&T,  Moody's  upgraded
  TCG's debt ratings to investment grade Baa3.
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  This  press  release,  other  than  historical  financial  information  contains
  forward-looking  statements that involve risks and uncertainties detailed in the
  Company's SEC reports and registration statements.
  Actual results may vary materially.
  <PAGE>
  
                         TELEPORT COMMUNICATIONS GROUP INC.
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                                     (unaudited)
  
   ($ in millions, except EPS)
  <TABLE>
  <CAPTION>
  
                                                                  Three Months Ended
                                                                      December 31
                                                              
                                                                    1997       1996
                                                                   -----       -----
  <S>                                                            <C>           <C>  
        Revenue                                                   $150.4        $87.4
        Expenses:
            Operating                                               83.4         51.5
            Selling, Gen, & Admin.                                  48.7         29.7
            In Process Research & Development                       22.0          0.0
            Depreciation/Amort.                                     48.0         27.3
                                                                   ------       ------
        Operating Loss                                             (51.7)       (21.1)
        Interest Income                                              6.7         12.9
        Interest Expense                                           (27.1)       (29.2)
        Minority Interest                                            0.0          1.3
        Equity in Losses of Unconsol. Affiliates                    (0.2)        (6.7)
                                                                   ------       ------
        Loss Before Taxes                                          (72.3)       (42.8)
        Income Tax Provision                                        (0.2)        (0.7)
                                                                   ------       ------
        Net Loss                                                  $(72.5)      $(43.5)
                                                                   ======      =======
  
        Recurring EBITDA                                          $ 18.3       $  6.2
        EBITDA                                                    $ (3.7)      $  6.2
        EPS                                                       $(0.42)      $(0.27)
        Weighted Avg. Shares  (millions)                           170.7        159.9
  </TABLE>
  
       EBITDA is defined as earnings/(loss) before interest, taxes,  depreciation,
       amortization,  minority  interest,  and equity in losses of  unconsolidated
       affiliates.  
       Recurring  EBITDA is defined as EBITDA prior to the in-process
       research and development expense.
  
  <PAGE>
  
                         TELEPORT COMMUNICATIONS GROUP INC.
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                                     (unaudited)
  
   ($ in millions, except EPS)
  <TABLE>
  <CAPTION>
  
                                                                     For The Year Ended
                                                                        December 31
                                                                    1997          1996*
                                                                   -----         ------
  <S>                                                                <C>          <C>   
        Revenue                                                    $494.3        $283.4
        Expenses:
            Operating                                               283.4         172.4
            Selling, Gen, & Admin.                                  166.0          98.4
            In Process Research & Development                        22.0           0.0
            Depreciation/Amort.                                     155.4          96.2
                                                                   -------       -------
        Operating Loss                                             (132.5)        (83.6)
        Interest Income                                              31.1          29.2
        Interest Expense                                           (116.2)        (66.9)
        Minority Interest                                             0.0           4.7
        Equity in Losses of Unconsol. Affiliates                     (3.4)         (7.7)
                                                                   -------       -------
        Loss Before Taxes                                          (221.0)       (124.3)
        Income Tax Provision                                         (1.7)         (2.3)
                                                                   -------       -------
        Net Loss                                                  $(222.7)      $(126.6)
                                                                  ========      ========
  
        Recurring EBITDA                                          $  44.9       $  12.6
        EBITDA                                                    $  22.9       $  12.6
        EPS                                                       $ (1.34)      $ (0.86)
        Weighted Avg. Shares  (millions)                            165.7         146.4
  </TABLE>
  
       EBITDA is defined as earnings/(loss) before interest, taxes,  depreciation,
       amortization,  minority  interest,  and equity in losses of  unconsolidated
       affiliates.
       Recurring  EBITDA is  defined  as EBITDA  prior to  in-process
       research and development expense.
  
       *Pro forma results
  <PAGE>
  
  SIGNATURE
  
           Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
  the  Registrant  has  caused  this  report  to be  signed  on its  behalf of the
  undersigned, thereunto authorized.
  
  
  TELEPORT COMMUNICATIONS GROUP INC.
  
  
  
  
  Dated: February 27, 1998                  By:     /s/ Maria Terranova-Evans
                                                   --------------------------
  
                                            Name:   Maria Terranova-Evans
                                            Title:  Vice President and Controller
                                                    (Principal Accounting Officer)
metadata_documents: [{"type": "8-K", "sequence": "1", "description": "FORM 8-K", "secsgml_size_bytes": 18532}]
metadata_filer: {"company-data": {"conformed-name": "TELEPORT COMMUNICATIONS GROUP INC", "cik": "0001012099", "assigned-sic": "4813", "irs-number": "133173139", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-20913", "film-number": "98563280"}, "business-address": {"street1": "437 RIDGE RD", "street2": "EXECUTIVE BLDG 3", "city": "DAYTON", "state": "NJ", "zip": "08810", "phone": "7323922000"}, "mail-address": {"street1": "437 RIDGE RD", "street2": "EXECUTIVE BUILDING 3", "city": "DAYTON", "state": "NJ", "zip": "08810"}}
text: SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, DC 20549
                                      FORM 8-K
                                   
  
                                   Current Report
                       Pursuant to Section 13 or 15 (d) of the
                          Securities Exchanges Act of 1934
  
                          Date of Report: February 24, 1998
  
                         Teleport Communications Group Inc.
               (Exact Name of Registrant as specified in its Charter)
  
  Delaware                            0-20913                   13-3173139
  --------------------------------------------------------------------------------
  (State or Other              (Commission File Number)        (IRS Employer
  Jurisdiction of                                            Identification No.)
  Incorporation)                          
  
  437 Ridge Road, Executive Building 3, Dayton, New Jersey              08810
  --------------------------------------------------------------------------------
  (Address of Principal Executive Offices)                            (Zip Code)
  
  Registrant's Telephone Number, Including Area Code:              (732) 392-2000
  Item 5. Other Events
  The Registrant issued the following Press Release on February 24, 1998:
  
       Teleport  Communications Group Inc.  (TCG)  reported  fourth  quarter 1997
  revenues of $150.4 Million.  Revenues for the year 1997 were $494.3 Million.
  For immediate release:
  Dayton, N.J. February 24, 1998
  
  Teleport  Communications Group Inc.  (Nasdaq/NM:TCGI)  reported revenues for the
  fourth quarter ended December 31, 1997 of $150.4  million,  a growth rate of 72%
  compared  to the same  period in 1996.  Revenues  for the year 1997 were  $494.3
  million, a 74% increase over 1996.
  
  Fourth quarter 1997  Recurring  EBITDA  (EBITDA* prior to a one-time  charge for
  in-process research and development) was $18.3 million, an increase of 195% from
  the fourth quarter 1996. As a percentage of revenues, recurring EBITDA was 12.2%
  compared  to 7.1% a year ago.  Including  the $22  million  one-time  charge for
  in-process  research  and  development  related  to  CERFnet,  EBITDA was $(3.7)
  million.
  
  For the year 1997,  recurring  EBITDA was 9.1% of  revenues,  or double the
  level of 4.4% of revenues for the year 1996.
  
  Annualized monthly recurring revenue for December 1997 was $620 million, an
  increase of 88% over the same period in 1996.
  
  "We are very  pleased to report  that for the year 1997,  revenues  grew 74% and
  recurring  EBITDA  increased  by 256%,"  said Bob  Annunziata,  TCG's  Chairman,
  President and CEO.  "This was the highest  revenue  growth rate in the past five
  years and it was also on an expanding  revenue base. The results  underscore the
  vast  opportunities  for our company with multiple  strategies for accessing the
  customer  and a  wholesale  and retail  approach to  customer  segmentation  and
  service offerings."
  
                         Three months ended          Twelve months ended
  ($ in millions)       12/31/97    12/31/96       12/31/97      12/31/96
                       ----------   --------      ----------     --------
  Revenues              $  150.4    $  87.4        $ 494.3        $ 283.4
  Recurring EBITDA      $   18.3    $   6.2        $  44.9        $  12.6
  
  *EBITDA  is  defined  as  earnings   before   interest,   taxes,   depreciation,
  amortization, and equity in losses of unconsolidated affiliates.
  
  Note: All results  (financial and  operational)  presented in this release which
  include  results from the first six months of 1996 are  presented on a pro forma
  basis to reflect the TCG  Reorganization,  described in TCG's  Annual  Report on
  Form 10-K, as amended, for the year ended December 31, 1996.
  Fourth Quarter 1997 Highlights:
  
  Revenues:
  Compared to third  quarter  1997,  total  revenues  for the fourth  quarter 1997
  increased  by $19  million  or 14.5%.  Significant  growth  areas in the  fourth
  quarter include higher growth in dedicated  services and Internet and high speed
  data  services.  Dedicated  services  grew 21%,  switched  services grew 7%, and
  Internet and high speed data  services  grew 18% compared to the third  quarter.
  Higher  dedicated  services  revenues  in  the  fourth  quarter  1997  reflected
  increased demand from large customers for TCG's dedicated services.
  
  Compared  to  fourth  quarter  1996,  switched  service  revenues  grew  80% and
  dedicated  service  revenues  grew 58%.  The trend of higher  growth in switched
  services  compared to dedicated  services has resulted in a shift in the revenue
  mix.  In the  fourth  quarter  1997,  dedicated  services  were 51% of  revenues
  compared to 56% of revenues in the fourth quarter 1996. Switched revenues in the
  fourth  quarter  1997 were 43% of  revenues  compared  to 41% of revenues in the
  fourth  quarter  1996.  Internet  and high speed data grew by over 300% from the
  fourth quarter 1996.
  
  The investment in sales force and sales support continued in the fourth quarter.
  During the fourth quarter 1997, TCG added 46 sales employees to reach a total of
  689. For the year 1997, TCG's sales staff increased by 246 employees or 56% from
  443 at year end 1996.
  
  Operating results:
  The  significant  growth of 55% in  recurring  EBITDA from $11.8  million in the
  third quarter 1997 to $18.3  million in the fourth  quarter 1997 was a result of
  lower growth,  relative to revenues, in both operating expenses and SG&A (sales,
  general and administrative)  expenses.  Operating expenses in the fourth quarter
  were  55% of  revenues  compared  to 57% in the  third  quarter.  SG&A  expenses
  improved to 32% of revenues from 34% in the third quarter.
  
  Compared to fourth  quarter  1996,  the  reductions  in operating  expenses as a
  percentage of revenues were more  significant with an improvement of a full four
  percentage  points from 59% of revenues in the fourth quarter 1996 to 55% in the
  fourth quarter 1997.
  
  During  December,  1997, TCG received the appraisal  concerning the value of the
  acquired net assets and the acquired  in-process  research  and  development  of
  CERFnet Services, Inc. from the independent consultants, which placed a value on
  the acquired in-process research and development of $22 million.
  This amount was recorded in the fourth quarter 1997.
  
  The net loss for the fourth  quarter  1997 was $72.5  million or $0.42 per share
  versus a loss of $43.5 million or $0.27 per share in the fourth quarter of 1996.
  The  additional  losses  include a $22 million  one-time  charge for  in-process
  research and development and additional depreciation.
  Highlights for the year ended December 31, 1997:
  
  Revenues:
  Total revenues for the year 1997 were $494.3 million, an increase
  of $210.9 million or 74% from the year 1996.
  
  Switched  service revenues for the year 1997 increased by 90% from the year 1996
  to  $215.2  million  and  44% of  total  revenues.  Dedicated  service  revenues
  increased 56% to $252.4 million and 51% of total revenues.
  
  Internet  revenues  were added in  February  of 1997 as a result of the  CERFnet
  acquisition.  Combined  with high  speed  data,  the two lines of  business  now
  comprise 4.5% of total revenues.
  
  For the year 1997,  TCG doubled the total number of access lines  served.  Total
  access  lines served at the year end 1997 were  282,700,  an addition of 144,100
  lines during the year.
  
  Voice grade  equivalents  (VGEs) is a measurement of all circuits in service and
  at year end 1997,  TCG was serving 7.4 million VGEs compared to 4.4 million VGEs
  at year end  1996.  Billed  minutes  in the  December  quarter  1997  were at an
  annualized run rate of 10.6 billion  minutes.  Total minutes billed for the year
  1997 was 7.7 billion minutes, over three times the 2.5 billion minutes billed in
  1996.
  
  Operating results:
  
  As a percentage of revenues,  operating  expenses  declined from 61% in the year
  1996 to 57% in 1997.  Although TCG  continued to invest during 1997 in sales and
  marketing to capitalize on the opportunities in the marketplace,  SG&A continued
  to improve from 35% of revenues in 1996 to 34% of revenues in 1997.  At year end
  1997,  total  employees were 3,059,  an increase 1,009  employees from the 2,050
  employees at year end 1996.
  
  Recurring  EBITDA for the year 1997  increased by $32.3 million or 256% from the
  year 1996.  Recurring  EBITDA margins improved to 9.1% in 1997, which was double
  the 4.4% of revenues in 1996.
  
  Net loss for the year 1997 was $222.7  million or $1.34 per share  compared to a
  loss of $126.6 million or $0.86 in 1996. Additional losses in 1997 were a result
  of higher  depreciation  costs, a one-time  charge for  in-process  research and
  development related to the CERFnet acquisition and higher interest expenses.
  Network Expansion:
  
  For the 1997 fourth quarter,  capital expenditures totaled $165 million and year
  to date capital  expenditures  totaled $501 million.  During the fourth quarter,
  TCG added 8 new markets and brings total  Metropolitan  Statistical Areas (MSAs)
  served by TCG to 65. Kansas City  FiberNet  will add an  additional  MSA and ACC
  Corp.  will add an additional 18 MSAs.  TCG's total MSAs served will increase to
  84 MSAs after the completion of the acquisitions.
  
  Equally  important,  357 on-net  buildings  were added during the fourth quarter
  1997,  which brings the total number of on-net  buildings to 4,638. For the year
  1997, 1,789 on-net buildings were added.  Total buildings served were 13,514, an
  increase of 5,769 buildings or 74% from year end 1996.
  
  The  following  is a comparison  of TCG's  network  statistics  at year end 1997
  versus year end 1996.
  
                                      12/31/97          12/31/96          Increase
  Route Miles                           9,474             6,744             2,730
  Fiber Miles                         491,097           346,039           145,058
  Voice-Grade Equivalents           7,350,527         4,428,770         2,921,757
  Buildings:        On-net              4,638             2,849             1,789
                    Off-net             8,876             4,896             3,980
                    ---------           -----          --------             -----
  Total Buildings                      13,514             7,745             5,769
  Local Serving Offices                   152               102                50
  Digital Voice Switches Installed         35                25                10
  
  During the fourth  quarter 1997, a new switch was installed in San Francisco and
  in Atlanta.
  
  Switched  services  revenue  was  recorded  for the first time in  Portland  and
  Cleveland during the fourth quarter and is serviced by switches installed during
  the third  quarter 1997.  Internet  revenues were recorded for the first time in
  Omaha and Salt Lake City.
  
  Mergers and Transactions:
  
  On November 26, 1997, TCG announced a definitive  agreement to acquire ACC Corp.
  in a stock for stock merger.  To date,  the waiting  period under the Hart Scott
  Rodino  has  been  expired  and we have  received  approval  from the FCC on the
  transfer of ACC Corp.'s International Operating Authority to TCG. Approvals from
  13 of 14 states in the U.S. and all foreign  approvals  have been  secured.  The
  merger is subject to an affirmative vote of a majority of the outstanding shares
  of ACCC common stock. TCG continues to move ahead on completing the transaction.
  On December 2, 1997, TCG announced a definitive  agreement to acquire the assets
  of Kansas  City Fiber  Network,  L.P.  The  transaction  is  pending  regulatory
  approval.
  
  On January 8, 1998, TCG and AT&T  announced a definitive  agreement for the
  merger of TCG with AT&T in a stock-for-stock  transaction at an exchange rate of
   .943 shares of AT&T for every share of TCG.  Requests for  regulatory  approvals
  have been filed.
  
  As a result of the  definitive  agreement  reached with AT&T,  Moody's  upgraded
  TCG's debt ratings to investment grade Baa3.
  
  This  press  release,  other  than  historical  financial  information  contains
  forward-looking  statements that involve risks and uncertainties detailed in the
  Company's SEC reports and registration statements.
  Actual results may vary materially.
  TELEPORT COMMUNICATIONS GROUP INC.
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                                     (unaudited)
  
   ($ in millions, except EPS)
  Three Months Ended
                                                                      December 31
                                                              
                                                                    1997       1996
                                                                   -----       -----
  Revenue                                                   $150.4        $87.4
        Expenses:
            Operating                                               83.4         51.5
            Selling, Gen, & Admin.                                  48.7         29.7
            In Process Research & Development                       22.0          0.0
            Depreciation/Amort.                                     48.0         27.3
                                                                   ------       ------
        Operating Loss                                             (51.7)       (21.1)
        Interest Income                                              6.7         12.9
        Interest Expense                                           (27.1)       (29.2)
        Minority Interest                                            0.0          1.3
        Equity in Losses of Unconsol. Affiliates                    (0.2)        (6.7)
                                                                   ------       ------
        Loss Before Taxes                                          (72.3)       (42.8)
        Income Tax Provision                                        (0.2)        (0.7)
                                                                   ------       ------
        Net Loss                                                  $(72.5)      $(43.5)
                                                                   ======      =======
  
        Recurring EBITDA                                          $ 18.3       $  6.2
        EBITDA                                                    $ (3.7)      $  6.2
        EPS                                                       $(0.42)      $(0.27)
        Weighted Avg. Shares  (millions)                           170.7        159.9
  EBITDA is defined as earnings/(loss) before interest, taxes,  depreciation,
       amortization,  minority  interest,  and equity in losses of  unconsolidated
       affiliates.  
       Recurring  EBITDA is defined as EBITDA prior to the in-process
       research and development expense.
  TELEPORT COMMUNICATIONS GROUP INC.
                        CONSOLIDATED STATEMENTS OF OPERATIONS
                                     (unaudited)
  
   ($ in millions, except EPS)
  For The Year Ended
                                                                        December 31
                                                                    1997          1996*
                                                                   -----         ------
  Revenue                                                    $494.3        $283.4
        Expenses:
            Operating                                               283.4         172.4
            Selling, Gen, & Admin.                                  166.0          98.4
            In Process Research & Development                        22.0           0.0
            Depreciation/Amort.                                     155.4          96.2
                                                                   -------       -------
        Operating Loss                                             (132.5)        (83.6)
        Interest Income                                              31.1          29.2
        Interest Expense                                           (116.2)        (66.9)
        Minority Interest                                             0.0           4.7
        Equity in Losses of Unconsol. Affiliates                     (3.4)         (7.7)
                                                                   -------       -------
        Loss Before Taxes                                          (221.0)       (124.3)
        Income Tax Provision                                         (1.7)         (2.3)
                                                                   -------       -------
        Net Loss                                                  $(222.7)      $(126.6)
                                                                  ========      ========
  
        Recurring EBITDA                                          $  44.9       $  12.6
        EBITDA                                                    $  22.9       $  12.6
        EPS                                                       $ (1.34)      $ (0.86)
        Weighted Avg. Shares  (millions)                            165.7         146.4
  EBITDA is defined as earnings/(loss) before interest, taxes,  depreciation,
       amortization,  minority  interest,  and equity in losses of  unconsolidated
       affiliates.
       Recurring  EBITDA is  defined  as EBITDA  prior to  in-process
       research and development expense.
  
       *Pro forma results
  SIGNATURE
  
           Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
  the  Registrant  has  caused  this  report  to be  signed  on its  behalf of the
  undersigned, thereunto authorized.
  
  TELEPORT COMMUNICATIONS GROUP INC.
  
  Dated: February 27, 1998                  By:     /s/ Maria Terranova-Evans
                                                   --------------------------
  
                                            Name:   Maria Terranova-Evans
                                            Title:  Vice President and Controller
                                                    (Principal Accounting Officer)