SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 23, 1999
U S WEST, Inc.
(Formerly "USW-C, Inc.")
(Exact name of registrant as specified in its charter)
<S> <C> <C>
A Delaware Corporation Commission File IRS Employer Identification
(State of Incorporation) Number 1-14087 No. 84-0953188
1801 California Street, Denver, Colorado 80202
(Address of principal executive offices, including Zip Code)
Telephone Number (303) 672-2700
(Registrant's telephone number, including area code)
tem 5. Other Events
On February 23, 1999, U S WEST, Inc. issued a press release entitled
"U S WEST Commits $300 Million in Added Spending to Improve Customer Experience
and Meet the Competition -- 1999 Earnings Growth now Targeted at Low Double
Digits; Capital Expenditures to Grow by $200 Million". The press release is
attached hereto as Exhibit 99.
Item 7. Financial Statements and Exhibits
Exhibit 99 - Press Release issued February 23, 1999
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.
U S WEST, Inc.
(Formerly "USW-C, Inc.")
By: /s/ Thomas O. McGimpsey
Thomas O. McGimpsey
Dated: February 23, 1999
U S WEST, Inc.
1801 California Street
Denver, CO 80202
NEWS RELEASE [U S WEST Logo]
February 23, 1999
Note to investors: U S WEST (NYSE: USW) will hold a live teleconference call at
7 a.m. MST (9 a.m. EST) to discuss competitive initiatives and resulting
earnings impacts for 1999. Call 1-800-946-0705 by the scheduled start time to
join. A replay will be available starting at 10 a.m. MST, through 6 p.m. MST on
Feb. 26 by calling 1-888-203-1112.
- U S WEST Commits $300 Million in Added Spending
to Improve Customer Experience and Meet the Competition -
- 1999 Earnings Growth now Targeted at Low Double Digits;
Capital Expenditures to Grow by $200 Million -
DENVER -- U S WEST today committed to accelerating its spending to deliver an
enhanced customer experience given the new products and services the company
intends to bring to market. Additional spending of $300 million in 1999 includes
earlier deployment of network enhancements, a solution to eliminate network
bottlenecks due to increasing data traffic, and e-commerce efforts to develop
new channels for the business and reduce long-term operational costs.
This follows aggressive moves by competitors, including previously announced
AT&T plans to enter four of U S WEST's major markets -- Denver; Portland, Ore.;
Salt Lake City and Seattle -- by year's end.
"When the countr's largest long-distance provider, largest Competitive Local
Exchange Carrier, largest wireless provider, and now, largest cable television
provider - AT&T - announces that it is taking you on and when others are
spending lots of money to cherry-pick your best customers, you need to make
every effort to be the very best at meeting and exceeding customer needs with
differentiated products and services," said Sol Trujillo, U S WEST president and
The extra spending includes about $100 million for network enhancements, as well
as the associated training for network technicians to help them more efficiently
manage their jobs and improve the customers' experience. It also includes about
$200 million to accelerate the next generation of the network and lay the
groundwork for deployment of new services such as video and data, new wireless
products, and step-up the company's e-commerce efforts.
- more -
U S WEST - Page 2
Part of this spending will cause the company's total 1999 capital expenditure
budget to rise to between $3.5 billion and $3.8 billion, including software
capitalization. Some of the additional capital will also be used to further
reinforce the operating support systems needed to enable competition in
compliance with federal requirements.
Additionally, Trujillo said significant capital spending for interconnection
also will be required in 1999. These are the costs that enable U S WEST's
competitors to connect to U S WEST's network.
"We know our customers want their telecommunications services supplied to them
in a way that is easier, better and more hassle-free," said Trujillo. "We're
taking positive steps to do just that."
U S WEST Chief Financial Officer, Al Spies, said that an internal review has
identified cost-reduction options to offset part of the planned spending
increase. Nevertheless, he expects this additional spending will cause a
reduction in its 1999 earnings estimates. Previously, the company had committed
to achieving 12-14 percent earnings per share growth during the year.
"I expect our earnings will still be in the double digits for 1999," said Spies.
"But they will be lower than our previous guidance, more likely the earnings
growth will be around 10 percent. Given the competitive realities, we clearly
need to invest in our customers."
Safe Harbor Statement: This document contains statements about expected future
events and financial results that are forward-looking and subject to risks and
uncertainties. For these statements, we claim the safe harbor for
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Factors that could cause actual results to differ
from expectations include: (i) greater than anticipated competition from new
entrants into the local exchange, intraLATA toll, wireless, data and directories
markets, causing loss of customers and increased price competition; (ii) changes
in demand for U S WEST's products and services, including optional custom
calling features; (iii) higher than anticipated employee levels, capital
expenditures and operating expenses (such as costs associated with
interconnection and year 2000 remediation); (iv) the loss of significant
customers; (v) pending and future state and federal regulatory changes affecting
the telecommunications industry, including changes that could have an impact on
the competitive environment in the local exchange market; (vi) a change in
economic conditions in the various markets served by U S WEST's operations;
(vii) higher than anticipated start-up costs associated with new business
opportunities; (viii) delays in U S WEST's ability to begin offering interLATA
long-distance services; (ix) consumer acceptance of broadband services,
including telephony, data, video and wireless services; and (x) delays in the
development of anticipated technologies, or the failure of such technologies to
perform according to expectations. These cautionary statements by U S WEST
should not be construed as exhaustive or as any admission regarding the adequacy
of disclosures made by U S WEST. U S WEST cannot always predict or determine
after the fact what factors would cause actual results to differ materially from
those indicated by the forward-looking statements or other statements. In
addition, readers are urged to consider statements that include the terms
"believes", "belief", "expects", "plans", "objectives", "anticipates",
"intends", "targets", or the like to be uncertain and forward-looking. All
cautionary statements should be read as being applicable to all forward-looking
statements wherever they appear. U S WEST does not undertake any obligation to
publicly update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
U S WEST (NYSE: USW) provides a full range of telecommunications services -
including wireline, wireless PCS, data networking, directory and information
services - to more than 25 million customers nationally and in 14 western and
midwestern states. More information about U S WEST can be found on the Internet
Further information: Larry Thede, 303-896-3550; Rodney Miller, 303-896-3096;
Martha Daniele Paine, 303-896-5706.
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