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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: March 10, 2000
(Date of earliest event reported)
U S WEST, Inc.
(Formerly "USW-C, Inc.")
(Exact name of registrant as specified in its charter)
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A Delaware Corporation Commission File IRS Employer Identification
(State of Incorporation) Number 1-14087 No. 84-0953188
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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)
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Item 5. Other Events
Filed as an Exhibit to this Current Report on Form 8-K is the
Chairman's letter to shareholders, dated March 3, 2000, that will be included
with the Company's Annual Report on Form 10-K to be mailed to its shareholders.
Interested parties can obtain a copy of the Form 10-K for the year ended
December 31, 1999, which was recently filed with the Securities and Exchange
Commission ("SEC") on March 3, 2000, by accessing the SEC's web site at
http://www.sec.gov.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit 99 - U S WEST, Inc. Chairman's Letter to Shareholders dated
March 3, 2000
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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
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Thomas O. McGimpsey
Assistant Secretary
Dated: March 10, 2000
EXHIBIT 99
[U S WEST Logo with Registered Trademark Symbol]
March 3, 2000
Dear Fellow Shareowner:
I'm pleased to present you with our annual report on Form 10-K for
1999. As you will see, 1999 was truly a year of transformation for U S WEST:
o we continued converting your company into a true growth vehicle with
dramatic gains in our data, wireless and Internet businesses;
o we enriched the lives of customers by offering new privacy products and by
extending our bundling packages; and
o we completed another piece of the puzzle by linking with Qwest to add a
national backbone and international presence.
However, amid all this change, we kept pace with your primary
expectation: maintaining a strong total shareowner return, ending the year
ranked second among our peers - just a single percentage point from first. Over
the last three years, our 157 percent total return is tops in our peer group.
And we have quadrupled our market capitalization in the last five years to more
than $36 billion as of the end of 1999.
Let me just give you a flavor of some of our other 1999 successes.
We honed our vision around innovation, integration and the Internet,
and we are implementing that vision in market-leading ways:
o We were the only RBOC to reach the milestone we set in early 1999 by
delivering our high-speed DSL data product, MegaBit, to more than 110,000
customers. We were by far the most densely penetrated of any DSL provider,
with more than 10 percent of qualified, on-line households now subscribing.
o We grew our Internet access accounts by two-and-a-half times to 380,000.
o Our !NTERPRISE data division grew revenues by 34 percent to $1.7 billion.
o We surpassed half-a-million PCS wireless subscribers in January, up more
than 150 percent over the last year, generating $236 million in revenues in
the process.
o We added new vertical services including No Solicitation and Privacy Plus -
now in some 38 markets with more than a quarter-million subscribers.
o U S WEST Dex grew its e-commerce revenues by 80 percent.
o Our robust Choice TV video service grew to more than 16,000 subscribers in
Phoenix. That service is helping us re-define high-speed integration in a
way that has put us well ahead of every other broadband provider. It's also
helping us improve customer satisfaction ratings and retention.
Perhaps most critically this year, we really started evolving our idea
of the "bundle." Our "Custom Choice" offering doubled in popularity in 1999 and
now has more than 1.3 million subscribers, adding more than $7 per month in
revenue per customer. Sixty percent of PCS subscribers now use one of the
integrated single-number or single bill features, driving lower churn rates. In
the second half of 1999, we started adding Internet access to Custom Choice,
with nearly 20 percent of customers opting for that. We were first to market
with a wireline, wireless and a web bundle for customers called the "Total
Package." It will be deployed regionwide this quarter and generates an average
up-sell of $50 per month.
All these product innovations helped us achieve solid financial
performance in 1999, with revenue growth of 6.1 percent, EBITDA growth of 8.3
percent and EPS growth of 6.3 percent.
In 2000, you'll see us continue expanding our suite of next-generation
data, wireless, video and custom calling services. By the end of this year, we
expect to have:
o 250,000 broadband subscribers;
o 120,000 new U S WEST.net subscribers, for a total of 500,000;
o 280,000 additional Advanced PCS users, for a total of 750,000;
And we plan to do this and still deliver on aggressive financial
targets: revenue growth in the 6 percent range; EBITDA growth of 6-8 percent;
and EPS growth in the mid-single digits.
Finally, I want to assure you that our impending merger with Qwest is
well on track to completing by mid-year. Though I have said I will not be
joining the executive team of the new Qwest when the merger closes later this
year, until then I will remain chief executive of U S WEST.
After your shareowner approval of that merger in November, we received
positive signs from the FCC and expect their approval at any time. As I write
this, one of our states has given us the nod and we expect others to follow
soon.
Nearly everyone agrees that this 'vertical' merger makes great sense.
I'm certain that it will be viewed as a watershed event in the
telecommunications industry for years to come. And the year 2000 will be viewed
as a time when one of the most innovative local, data and wireless players - U S
WEST - linked with one of the boldest of the Internet and fiber players - Qwest
- - to form a true powerhouse for the next millennium.
Thanks for joining us in the adventure.
Sincerely,
/s/ Sol Trujillo
Sol Trujillo
Chairman, President and Chief Executive Officer
A final note: The following Form 10-K serves as our annual report to
you for 1999. With the Qwest merger on schedule, I don't expect to hold another
U S WEST shareowner meeting. Therefore, there are no items in the Form 10-K that
require your vote.
U S WEST will not publish a more traditional and familiar annual report
- - with photos, graphics, etc. - or a proxy statement this year. All that
information is in the Form 10-K.
I expect the next shareowner meeting to be held by the new combined
Qwest in 2001. You'll receive notice of and information about that meeting well
in advance.
This letter contains statements about expected future events and financial
results that are forward-looking and subject to risks and uncertainties. Please
refer to page 1 of the annual report on Form 10-K for a discussion of factors
that could cause actual results to differ from expectations.
