================================================================================
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): October 22, 1999
U S WEST, Inc.
(Formerly "USW-C, Inc.")
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
A Delaware Corporation Commission File IRS Employer Identification
(State of Incorporation) Number 1-14087 No. 84-0953188
</TABLE>
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)
(The Exhibits index is located on page 2 of this report)
================================================================================
<PAGE>
Item 5. Other Events
On October 22, 1999, U S WEST, Inc. released its third quarter
earnings results. The release and financial statements are attached hereto as
Exhibits.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
The following exhibits are filed as part of this current report on Form
8-K:
<TABLE>
<CAPTION>
Exhibit
Number Exhibit
<S> <C>
27 Financial Data Schedule
99 Press Release issued October 22, 1999 concerning the earnings results
of U S WEST, Inc. for the third quarter of 1999.
99A.1 Unaudited Consolidated Statements of Income of U S WEST, Inc. for the
quarters and nine-month periods ended September 30, 1998 and 1999,
respectively, filed in connection with the Press Release dated October
22, 1999.
99A.2 Unaudited Earnings Normalization Schedule of U S WEST, Inc. for the
quarters and nine months ended September 30, 1998 and 1999,
respectively, filed in connection with the Press Release dated October
22, 1999
99A.3 Unaudited Consolidated Balance Sheets of U S WEST, Inc. for the
nine-month period ended September 30, 1999 and the year ended December
31, 1998, respectively, filed in connection with the Press Release
dated October 22, 1999.
99A.4 Unaudited Consolidated Statements of Cash Flows of U S WEST, Inc. for
the nine-month periods ended September 30, 1999 and 1998,
respectively, filed in connection with the Press Release dated October
22, 1999.
99A.5 Unaudited Selected Consolidated Data of U S WEST, Inc. for the
quarters and nine-month periods ended September 30, 1999 and 1998,
respectively, filed in connection with the Press Release dated October
22, 1999.
99A.6 Unaudited Consolidated Statements of Operations of U S WEST
Communications, Inc. for the quarters and nine-month periods ended
September 30, 1999 and 1998, respectively.
99A.7 Unaudited Consolidated Balance Sheets of U S WEST Communications,
Inc.for the quarter and nine-month period ended September 30, 1999 and
the year ended December 31, 1998, respectively.
</TABLE>
<PAGE>
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.
U S WEST, Inc.
(Formerly "USW-C, Inc.")
By: /s/ Thomas O. McGimpsey
---------------------------------------------------
Thomas O. McGimpsey
Assistant Secretary
Dated: October 22, 1999
EXHIBIT 99
[U S WEST LOGO]
Investor Relations
NEWS FLASH
October 22, 1999
- --------------------------------------------------------------------------------
Note to investors: In lieu of a live call, U S WEST will have a recorded call
available beginning at 7:30 a.m. MDT (9:30 a.m. EDT) today to discuss third
quarter, 1999 results. To access the recording, call 1-888-203-1112 and enter
reservation number 796737. That recording will be available through Friday, Oct.
29 at 6 p.m.(MDT).
- --------------------------------------------------------------------------------
U S WEST Reports Solid Third Quarter Earnings
-- Normalized EPS Rises 10.7 Percent;
Revenues Continue at Near 7 Percent Growth Rate;
PCS, DSL, other New Services Drive Increases --
DENVER - U S WEST (NYSE: USW) today announced third quarter normalized diluted
earnings per share of $0.83 on normalized net income of $421 million. Normalized
EPS rose $0.08 or 10.7 percent, aided by a $0.03 one-time gross receipts tax
refund, and net income improved by 11.1 percent from third quarter 1998.
Also during the quarter the company reported that EBITDA (Earnings Before
Interest, Taxes, Depreciation, Amortization and other) grew to $1.465 billion,
up 8 percent from the third quarter of last year.
The company achieved these results based on continued strong revenue growth of
6.6 percent, capitalizing on success in PCS, data, custom calling features and
private line services. Quarterly performance was also aided by continuing
moderation of 1999 operating expense growth, from a normalized 7.3 percent in
second quarter to 5.5 percent this quarter.
"We've delivered what we said we would financially," said Sol Trujillo,
chairman, president and CEO of U S WEST. "What's really exciting is that U S
WEST continues to lead the industry in connecting more of its customers to
next-generation services than any other player - large or small."
Trujillo pointed to the following as examples of that leadership:
o Penetration for the company's high-speed MegaBit DSL services are much
stronger than any other DSL provider in the nation at 338 subscribers
per Central Office and 10 percent of qualified, on-line households.
o Some 56 percent of subscribers to U S WEST's wireless PCS product now
take advantage of the unique integrated wireline-wireless capabilities
of Advanced PCS.
o 75-percent plus of third quarter revenue growth is from data- and
wireless-related products.
- more -
<PAGE>
U S WEST Third Quarter Earnings - Page 2
o U S WEST leads the industry with 215,000-plus subscribers to
privacy-related products including Caller ID with Privacy Plus and No
Solicitation.
"These and other services each represent new pipelines for growth that the
company is just beginning to tap," Trujillo added. "These next-generation
services are at the heart of U S WEST's plan to develop strong new growth
engines that we expect will deliver superior results in the future."
<TABLE>
<CAPTION>
Growth Product Highlights
<S> <C> <C> <C>
- ------------ ---------------------------- ------------------- ---------------------------------------------------------
Division Revenues (comparisons are Key Product Subscriber/Penetration Levels (comparisons are 3Q99
3Q99 over 3Q98) over 3Q98)
- ------------ ---------------------------- ------------------- ---------------------------------------------------------
- ------------ ---------------------------- ------------------- ---------------------------------------------------------
Data o $443 million, up o U S o To date, total nearly 307,000, up almost
33 percent WEST.net 86,000 for the quarter and 335 percent over 3Q98
totals.
o !NTERPRISE data
revenues were $221 o MegaBit o Added about 30,000 for the quarter. To date at
million for the (DSL) about 80,000.
quarter, up 58 services o USW serves 338 subs. per Central Office, with
percent. 237 equipped COs.
o More than 90 percent of customers are
choosing to self-install, avoiding a truck
roll and reducing provisioning costs.
- ------------ ---------------------------- ------------------- ---------------------------------------------------------
- ------------ ---------------------------- ------------------- ---------------------------------------------------------
PCS o ARPU of $58. o Advanced o Added nearly 60,000 during the quarter for a
PCS total of 344,000.
o Total quarterly
revenue of $69 o Weighted average penetration is now 2.6
million, up 176 percent.
percent.
o Wireless o 56 percent of users now subscribe to at least
Integrated one of the product's integrated features
features
- ------------ ---------------------------- ------------------- ---------------------------------------------------------
- ------------ ---------------------------- ------------------- ---------------------------------------------------------
Dex o Quarterly o Internet o Sold more than 9,000 web sites to small
directory revenues Yellow Pages businesses since 1998 introduction.
grew by 7.3 percent. (IYP)
o Year-to-date o Web Site o IYP usage was up 166 percent.
E-Commerce-related Service
revenues grew 71 o Dex and U S WEST's Small Business Group began
percent to more than offering "Virtual Storefront" to small businesses,
$16 million. a package of Internet access, high-speed transport
and a three-page web site for under $100 per month.
- ------------ ---------------------------- ------------------- ---------------------------------------------------------
</TABLE>
During the quarter, the company's total "growth subscribers" (customers for the
company's PCS, DSL and Internet access service) were up almost 180,000 - more
than double the amount from third quarter 1998. Growth subscribers now total
more than 730,000. Investment in growth initiatives negatively impacted EPS by
$0.21 for the quarter versus $0.12 for third quarter, 1998.
- more -
<PAGE>
U S WEST Third Quarter Earnings - Page 3
During the quarter, the company saw continuing impacts from competition in its
local telephony business in both line growth and pricing. It now has re-sold
nearly 505,000 lines to competitors, up from 475,000 lines at the end of second
quarter.
Other third quarter highlights include:
Volumes and Penetration:
o Residential subscriber levels at the end of the quarter for the company's
most popular custom calling features continued to grow, with Caller ID and
Call Waiting both at 37 percent penetration. Voice Messaging exceeded the
20 percent level during the quarter, the highest penetration rate in the
industry.
o So far this year, the company has signed up more than 215,000 customers for
several of its new privacy-related custom-calling features, including
Caller ID with Privacy Plus and No Solicitation.
o Subscribers to the company's bundled Custom Choice package for residential
customers surpassed one million during the quarter and now stand at 1.1
million. In June, the company began offering Custom Choice to small
business customers, and has signed up 20,000 subscribers through third
quarter.
o The number of primary rate ISDN lines in service increased 88 percent.
Total ISDN lines grew 26 percent.
o The addition of 504,000 access lines over the past year for a growth rate
of 3.1 percent. On a "voice-grade-equivalent" basis, business access line
growth was 13.3 percent.
o On the small business side, total access lines equipped with Centrex 21
services grew to 534,000, a 54 percent year-over-year increase.
Sales and Revenues:
o An 18.1 percent increase compared with third quarter 1998 in private line
and special access revenues, which totaled $304 million - a reflection of
the company's growing data networking services business and its ability to
successfully compete in one of the most highly competitive segments of the
telecommunications market.
o During the quarter, consumer revenues from vertical services increased by
nearly 15 percent, compared to third quarter 1998.
o Frame Relay revenues increased by nearly 34 percent quarter-over-quarterand
ISDN revenues jumped by 71 percent quarter-over-quarter.
o The company's Home Office channel generated revenues of nearly $18 million
during the quarter, an increase of 35 percent. The Home Office channel
serves the unique needs of the growing number of home-based businesses in U
S WEST's region.
o Toll revenues dropped by 30 percent during the quarter.
- more -
<PAGE>
U S WEST Third Quarter Earnings - Page 4
Costs and Margins:
o Capital expenditures were up 78 percent during the quarter, rising to $1.1
billion. For the year, capital expenditures are up 47 percent at $2.8
billion. The increases have helped bolster service levels for traditional
services and aided in deployment of new services.
o Absorbed approximately $100 million in expenses related to interconnection,
number portability and Year 2000 compliance during the quarter. To date,
the company has spent $232 million in expense and capital on Y2K. It
expects to spend another $48 million during the balance of 1999.
o Employee-related expenses grew by 8.2 percent during the quarter, due in
part with efforts related to keeping up with service demands. These
expenses include a net addition of more than 900 employees during the
quarter and nearly 2,900 since third quarter, 1998 - almost 1,500 of which
have been added specifically to keep up with service demands.
The quarterly results include a one-time $25 million ($0.03 EPS) refund from a
state gross receipts tax. The company had expected this refund before the end of
the year.
During the quarter, the company made a one-time payment of $280 million to
Global Crossing, Ltd. as part of the break-up fee to dissolve a proposed merger
between the two firms. This merger was superseded by U S WEST's existing merger
agreement with Qwest. Half of the payment to Global Crossing was made in cash
(using a loan from Qwest); the remainder was paid in shares of Global Crossing
stock, which U S WEST purchased in late June. This payment - and other minor
merger-related expense - had a $0.56 EPS impact during the quarter, bringing
U S WEST's reported EPS to $0.27.
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
at http://www.uswest.com.
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) acceleration of
the deployment of advanced new services to customers, such as broadband data,
wireless and video services, which would require substantial expenditure of
financial and other resources; (vii) a change in economic conditions in the
various markets served by U S WEST's operations; (viii) higher than anticipated
start-up costs associated with new business opportunities; (ix) delays in U S
WEST's ability to begin offering interLATA long-distance services; (x) consumer
acceptance of broadband services, including telephony, data and wireless
services; (xi) delays in the development of anticipated technologies, or the
failure of such technologies to perform according to expectations; and (xii)
timing and completion of the recently announced merger with Qwest Communications
International Inc. 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.
- ### -
Further information: Larry Thede, 303-896-3550; Martha Daniele Paine,
303-896-5706; Kent Evans, 303-896-3096.
NOTE: This release and the financial statements will be available on the
Internet after 7:15 a.m. (MDT) by accessing U S WEST's Internet site:
www.uswest.com.
EXHIBIT 99A.1
CONSOLIDATED STATEMENTS OF INCOME (1) (2) U S WEST, INC.
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
In millions, except September 30, % September 30, %
per share amounts 1999 1998 Change 1999 1998(3) Change
- ------------------------ ----- ----- ------- ----- -------- ------
<S> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES
Local services $1,979 $1,805 9.6 $5,779 $5,291 9.2
Access services 688 660 4.2 2,057 1,996 3.1
Directory services 336 313 7.3 995 929 7.1
Long-distance services 141 202 (30.2) 471 606 (22.3)
Other services 173 132 31.1 455 352 29.3
----- ----- ------- ------
Total operating rev. 3,317 3,112 6.6 9,757 9,174 6.4
----- ----- ------- ------
OPERATING EXPENSES
Employee-related 1,195 1,104 8.2 3,473 3,179 9.2
Other operating 657 651 0.9 1,996 2,072 (3.7)
Depreciation & amort 588 558 5.4 1,763 1,625 8.5
----- ----- ------- ------
Total operating exp. 2,440 2,313 5.5 7,232 6,876 5.2
----- ----- ------- ------
OPERATING INCOME 877 799 9.8 2,525 2,298 9.9
Interest expense 203 172 18.0 519 495 4.8
Terminated merger-
related expenses 282 - - 282 - -
Other (income)expense (4) 19 - 10 77 (87.0)
----- ----- ------- ------
Income before
income taxes 396 608 (34.9) 1,714 1,726 (0.7)
Income tax provision(4) 257 229 12.2 757 658 15.0
----- ----- ------- ------
NET INCOME $ 139 $ 379 (63.3) $ 957 $1,068 (10.4)
===== ===== ======= ======
Basic earnings
per share $ 0.28 $ 0.76 (63.2) $ 1.90 $ 2.13 (10.8)
===== ===== ======= ======
Basic average shares
outstanding 504.8 501.8 0.6 504.0 501.5 0.5
===== ===== ======= ======
Diluted earnings
per share $ 0.27 $ 0.75 (64.0) $ 1.88 $ 2.11 (10.9)
===== ===== ======= ======
Diluted average shares
outstanding 509.0 506.0 0.6 508.5 505.7 0.6
===== ===== ===== ======
<FN>
<F1>
(1) The separation of U S WEST, Inc. into two independent companies, U S
WEST,Inc.("New U S WEST") and MediaOne Group, Inc.,(the "Separation") occurred
on June 12, 1998. The results for the nine months ended September 30, 1998 give
effect to the Separation as if the business that comprised New U S WEST operated
as a separate entity for the entire period presented. Additionally, the results
of operations include pro forma adjustments for the assumption of indebtedness
and the issuance of shares in connection with the alignment of the directory
business with New U S WEST, as if the Separation had been consummated as of the
beginning of the period indicated.
<F2>
(2) Net income for the three and nine months ended September 30, 1999 includes
$282 of after tax charges associated with terminating the Global Crossing
merger.
<F3>
(3) Net income for the nine months ended September 30, 1998 includes $89 of
after tax charges associated with the Separation and an asset impairment,
consisting of $129 of other operating expense, net of $40 of income tax expense.
<F4>
(4) The disproportionate tax rate for the three and nine months ended September
30, 1999, results from the deductibility of the terminated merger-related
expenses being subject to review.
</FN>
</TABLE>
EXHIBIT 99 A.2
EARNINGS NORMALIZATION SCHEDULE U S WEST, INC.
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
In millions, except September 30, % September 30, %
per share amounts 1999 1998 Change 1999 1998 Change
- --------------------- ------- ---- ------ ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Reported net income $ 139 $ 379 (63.3) $ 957 $1,068 (10.4)
Adjustments:
Terminated merger-
related expenses 282 - - 282 - -
Separation costs - - - - 68 -
Asset impairment - - - - 21 -
----- ----- ------- ------
Normalized income $ 421 $ 379 11.1 $1,239 $1,157 7.1
===== ===== ======= ======
NORMALIZED BASIC
EARNINGS PER SHARE:
Reported basic
earnings per share $0.28 $0.76 (63.2) $1.90 $2.13 (10.8)
Adjustments:
Terminated merger-
related expenses 0.56 - - 0.56 - -
Separation costs - - - - 0.13 -
Asset impairment - - - - 0.04 -
----- ----- ------- ------
Normalized basic
earnings per share $0.84 $0.76 10.5 $2.46 $2.31 # 6.5
===== ===== ======= ======
NORMALIZED DILUTED
EARNINGS PER SHARE:
Reported diluted
earnings per share $0.27 $0.75 (64.0) $1.88 $2.11 (10.9)
Adjustments:
Terminated merger-
related expenses 0.56 - - 0.56 - -
Separation costs - - - 0.13 -
Asset impairment - - - - 0.04 -
----- ----- ------- --------
Normalized diluted
earnings per share $0.83 $0.75 10.7 $2.44 $2.29 # 6.6
===== ===== ======= ======
<FN>
<F1>
# Amount does not foot due to rounding of individual components.
</FN>
</TABLE>
EXHIBIT 99A.3
CONSOLIDATED BALANCE SHEETS U S WEST, Inc.
<TABLE>
<CAPTION>
(Unaudited)
September 30, December 31,
In millions 1999 1998
- -------------------------------------- ------------ -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 55 $ 49
Accounts receivable, net 1,785 1,743
Inventories and supplies 257 197
Deferred directory costs 273 274
Deferred tax asset 163 151
Prepaid and other 118 78
------------ -------------
Total current assets 2,651 2,492
Property, plant and equipment - net 15,705 14,908
Other assets - net 2,604 1,007
------------ -------------
Total assets $ 20,960 $ 18,407
============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 3,379 $ 1,277
Accounts payable 1,436 1,347
Accrued expenses 1,762 1,702
Advance billings and deposits 385 370
------------ -------------
Total current liabilities 6,962 4,696
Long-term debt 9,754 8,642
Postretirement and other postemployment
benefit obligations 2,635 2,643
Deferred taxes, credits and other 1,457 1,671
Stockholders' equity 152 755
------------ -------------
Total liabilities and
stockholders' equity $ 20,960 $ 18,407
============ =============
</TABLE>
EXHIBIT 99A.4
CONSOLIDATED STATEMENTS OF CASH FLOWS U S WEST, Inc.
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
In millions 1999 1998
- -------------------------------------------------- ------- -------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 957 $ 1,068
Adjustments to net income:
Depreciation and amortization 1,763 1,625
Deferred income taxes and amortization
of investment tax credits 131 57
Changes in operating assets and liabilities:
Accounts receivable (42) (18)
Inventories, supplies and other current assets (93) (49)
Accounts payable, accrued expense
and advance billings 155 233
Other 81 34
- -------------------------------------------------- ------- -------
Cash provided by operating activities 2,952 2,950
- -------------------------------------------------- ------- -------
INVESTING ACTIVITIES
Expenditures for property, plant and equipment (2,681) (1,937)
Payments on disposals of property,
plant and equipment (30) (14)
Investment in Global Crossing Ltd. common stock (2,464) -
Other (11) (57)
- -------------------------------------------------- ------- -------
Cash used for investing activities (5,186) (2,008)
- -------------------------------------------------- ------- -------
FINANCING ACTIVITIES
Net proceeds from short-term debt 2,102 1,519
Proceeds from issuance of long-term debt 1,302 3,066
Repayments of long-term debt (307) (411)
Net repayments of Old U S WEST short-term debt - (198)
Repayment of Old U S WEST debt in connection
with the DEX Alignment - (3,829)
Proceeds from issuance of common stock 60 60
Dividends paid on common stock (917) (787)
Dividends paid to Old U S WEST - (194)
Payment to Old U S WEST for debt refinancing costs - (140)
Return of capital from Old U S WEST - 13
Purchases of treasury stock - (46)
- -------------------------------------------------- ------- -------
Cash used for financing activities 2,240 (947)
- -------------------------------------------------- ------- -------
CASH AND CASH EQUIVALENTS
Increase 6 (5)
Beginning balance 49 27
- -------------------------------------------------- ------- -------
Ending balance $ 55 $ 22
================================================== ======= =======
</TABLE>
EXHIBIT 99A.5
SELECTED CONSOLIDATED DATA U S WEST, INC.
(UNAUDITED)
<TABLE>
<CAPTION>
As of and for the As of and for the
Quarter Ended Nine Months Ended
September 30, % September 30, %
1999 1998 Change 1999 1998 Change
- ---------------------- -------- ------- ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Access lines
(thousands):
Business 5,008 4,903 2.1
Consumer 11,904 11,505 3.5
-------- --------
Total access lines 16,912 16,408 3.1
======== ========
Billed access minutes
of use (millions):
Interstate 15,487 14,707 5.3 46,207 43,868 5.3
Intrastate 3,270 3,107 5.2 9,625 9,206 4.6
-------- -------- --------- --------
Total minutes of use 18,757 17,814 5.3 55,832 53,074 5.2
======== ======== ========= ========
Wireless/PCS:
Revenues(millions) $ 69 $ 25 176.0 $166 $50 232.0
Subscribers(thousands) 344 104 230.8
ARPU (Dollars) $ 58 $ 46 26.1
Wtd Avg Penetration 2.6% 1.6% 62.5
Data Revenues(millions):
Frame Relay $45.6 $34.1 33.7 $126.9 $95.0 33.6
Private Line
LAN Interconnect 36.1 31.0 16.5 105.7 90.5 16.8
ISDN 62.8 36.8 70.7 174.7 103.5 68.8
USW.Net/Megabit(DSL) 19.7 4.7 319.1 48.9 7.1 588.7
Other !NTERPRISE 56.7 33.4 69.8 139.7 80.9 72.7
-------- -------- --------- --------
Subtotal !NTERPRISE 220.9 140.0 57.8 595.9 377.0 58.1
Other Special Access
& Private Line 222.4 192.4 15.6 640.3 556.2 15.1
-------- -------- --------- --------
Total Data Revenues $ 443.3 $ 332.4 33.4 $1,236.2 $933.2 32.5
======== ======== ========= ========
Total Special Access
and Private Line (#1) $ 304.1 $ 257.5 18.1 $ 872.9 $741.7 17.7
======== ======== ========= ========
Additional Data Stats:
XDSL Equipped
Central Offices (C.O.) 237 N.A.
Subscribers per XDSL
Equipped C.O.'s 338 N.A.
Employees:
U S WEST, Inc. 56,634 53,758 5.3
Telephone
operations only 47,758 45,654 4.6
Telephone empl per
10,000 access lines 28.2 27.8 1.4
Dividends per
common share $0.535 $0.535 0.0 $1.820 $1.605 13.4
Common shares
outstanding(millions) 505.0 502.1 0.6
Capital expend
(millions) $1,051 $589 78.4 $2,819 $1,920 46.8
EBITDA (millions)(#2) 1,465 1,357 8.0 4,288 3,923 9.3
EBITDA margin 44.2% 43.6% 1.4 43.9% 42.8% 2.6
Debt-to-capital
ratio (#3) 60.2% 56.0% 7.5
<FN>
<F1>
# 1: Includes Frame Relay, Private Line LAN Interconnect and Other
Special Access and Private Line revenues.
<F2>
# 2: Earnings before interest, taxes, depreciation, amortization,
and other (EBITDA).
<F3>
# 3: Telephone operations only.
<F4>
N.A. = Not Available
</FN>
</TABLE>
EXHIBIT 99A.6
CONSOLIDATED STATEMENTS OF OPERATIONS U S WEST COMMUNICATIONS, INC.
(UNAUDITED) (Telephone Operations Only)
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30, % September 30, %
In millions 1999 1998 Change 1999 1998(1) Change
- ------------------------ ------ ------ ------ ------ ------- ------
<S> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES
Local service $1,979 $1,805 9.6 $5,779 $5,291 9.2
Access services 688 660 4.2 2,057 1,996 3.1
Long-distance services 138 199 (30.7) 459 595 (22.9)
Other services 110 75 46.7 262 221 18.6
------ ------ ------ ------
Total operating revenues 2,915 2,739 6.4 8,557 8,103 5.6
------ ------ ------ ------
OPERATING EXPENSES
Employee-related 935 868 7.7 2,719 2,550 6.6
Other operating (1) 636 625 1.8 1,923 1,969 (2.3)
Depreciation & amort 571 544 5.0 1,713 1,580 8.4
------ ------ ------ ------
Total operating expenses 2,142 2,037 5.2 6,355 6,099 4.2
------ ------ ------ ------
Operating income 773 702 10.1 2,202 2,004 9.9
Interest expense 102 103 (1.0) 289 288 0.3
Other expense 9 20 (55.0) 33 76 (56.6)
------ ------ ------ ------
Income before income
taxes 662 579 14.3 1,880 1,640 14.6
Income tax provision 251 219 14.6 713 630 13.2
------ ------ ------ ------
NET INCOME $ 411 $ 360 14.2 $1,167 $1,010 15.5
====== ====== ====== ======
<FN>
<F1>
(1) Net income for the nine months ended September 30, 1998 includes $89 of
after tax charges associated with the Separation and an asset impairment,
consisting of $129 of other operating expense, net of $40 of income tax expense.
</FN>
</TABLE>
EXHIBIT 99A.7
CONSOLIDATED BALANCE SHEETS U S WEST COMMUNICATIONS, INC.
(Telephone Operations Only)
<TABLE>
<CAPTION>
(Unaudited)
September 30, December 31,
In millions 1999 1998
- -------------------------------------- ------------- ---------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 66 $ 68
Accounts receivable, net 1,703 1,619
Inventories and supplies 187 154
Deferred tax asset 121 113
Prepaid and other 98 61
------------- ---------------
Total current assets 2,175 2,015
Property, plant and equipment - net 15,423 14,681
Other assets - net 1,303 882
------------- ---------------
Total assets $ 18,901 $ 17,578
============= ===============
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Short-term debt $ 1,767 $ 789
Accounts payable 1,489 1,411
Accrued expenses 1,677 1,383
Advance billings and deposits 341 326
------------- ---------------
Total current liabilities 5,274 3,909
Long-term debt 4,976 5,154
Postretirement and other postemployment
benefit obligations 2,426 2,458
Deferred taxes, credits and other 1,761 1,594
Stockholder's equity 4,464 4,463
------------- ---------------
Total liabilities and
stockholder's equity $ 18,901 $ 17,578
============= ===============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001054522
<NAME> U S WEST, Inc.
<MULTIPLIER> 1,000,000
<S> <C> <C> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS 3-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1999 DEC-31-1998 DEC-31-1998
<PERIOD-START> JUL-01-1999 JAN-01-1999 JUL-01-1998 JAN-01-1998
<PERIOD-END> SEP-30-1999 SEP-30-1999 SEP-30-1998 SEP-30-1998
<CASH> 55 55 22 22
<SECURITIES> 0 0 0 0
<RECEIVABLES> 1,785 1,785 1,735 1,735
<ALLOWANCES> 0 0 0 0
<INVENTORY> 257 257 248 248
<CURRENT-ASSETS> 2,651 2,651 2,553 2,553
<PP&E> 37,271 37,271 34,840 34,840
<DEPRECIATION> 21,566 21,566 20,342 20,342
<TOTAL-ASSETS> 20,960 20,960 18,061 18,061
<CURRENT-LIABILITIES> 6,962 6,962 5,258 5,258
<BONDS> 0 0 0 0
0 0 0 0
0 0 0 0
<COMMON> 0 0 0 0
<OTHER-SE> 152 152 625 625
<TOTAL-LIABILITY-AND-EQUITY> 20,960 20,960 18,061 18,061
<SALES> 3,317 9,757 3,112 9,174
<TOTAL-REVENUES> 3,317 9,757 3,112 9,174
<CGS> 0 0 0 0
<TOTAL-COSTS> 0 0 0 0
<OTHER-EXPENSES> 2,440 7,232 2,313 6,876
<LOSS-PROVISION> 0 0 0 0
<INTEREST-EXPENSE> 203 519 172 495
<INCOME-PRETAX> 396 1,714 608 1,726
<INCOME-TAX> 257 757 229 658
<INCOME-CONTINUING> 257 757 229 658
<DISCONTINUED> 0 0 0 0
<EXTRAORDINARY> 0 0 0 0
<CHANGES> 0 0 0 0
<NET-INCOME> 139 957 379 1,068
<EPS-BASIC> .28 1.90 .76 2.13
<EPS-DILUTED> .27 1.88 .75 2.11
</TABLE>
