================================================================================
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): April 28, 2000
U S WEST, Inc.
(Exact name of registrant as specified in its charter)
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)
(The Exhibits index is located on page 2 of this report)
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<PAGE>
Item 5. Other Events
On April 28, 2000, U S WEST, Inc. released its first 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:
Exhibit Number Exhibit
27 Financial Data Schedule
99.1 Press Release issued April 28, 2000 concerning the earnings
results of U S WEST, Inc. for the first quarter of 2000.
99.2 Unaudited Pro Forma Consolidated Statements of Income of U S
WEST, Inc. for the quarters ended March 31, 1999 and 2000,
respectively, filed in connection with the Press Release dated
April 28, 2000.
99.3 Unaudited Pro Forma Earnings Normalization Schedule of U S WEST,
Inc. for the quarters ended March 31, 1999 and 2000,
respectively, filed in connection with the Press Release dated
April 28, 2000.
99.4 Unaudited Consolidated Balance Sheets of U S WEST, Inc. for the
quarter ended March 31, 2000, and the year ended December 31,
1999, respectively, filed in connection with the Press Release
dated April 28, 2000.
99.5 Unaudited Consolidated Pro Forma Statements of Cash Flows of U S
WEST, Inc. for the quarters ended March 31, 1999 and 2000,
respectively, filed in connection with the Press Release dated
April 28, 2000.
99.6 Unaudited Selected Consolidated Data of U S WEST, Inc. for the
quarters ended March 31, 1999 and 2000, respectively, filed in
connection with the Press Release dated April 28, 2000.
99.7 Unaudited Consolidated Statements of Operations of U S WEST
Communications, Inc. for the quarters ended March 31, 1999 and
2000, respectively, filed in connection with the Press Release
dated April 28, 2000.
99.8 Unaudited Consolidated Balance Sheets of U S WEST Communications,
Inc. for the quarter ended March 31, 2000, and the year ended
December 31, 1999, respectively, filed in connection with the
Press Release dated April 28, 2000.
<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.
By: /s/ Thomas O. McGimpsey
-------------------------
Thomas O. McGimpsey
Assistant Secretary
Dated: April 28, 2000
April 28, 2000
- --------------------------------------------------------------------------------
Note to investors: Sol Trujillo, Chairman, President and CEO of U S WEST (NYSE:
USW), will host a live teleconference call at 9 a.m. MDT (11 a.m. EDT) today to
discuss first quarter 2000 results. U.S. participants call 1-888-569-5033 by the
scheduled start time. International callers dial 719-457-2653. A replay will be
available starting at Noon MDT, through 6 p.m. MDT on Friday, May 5 by calling
1-888-203-1112 and entering confirmation number 782807. International callers
can reach the replay at 719-457-0820.
- --------------------------------------------------------------------------------
U S WEST Reports Record Revenue Growth in First Quarter
as Data, Wireless Sales Climb
Revenue Growth at All-time High 6.6 Percent;
"Growth Subscribers" Surpass 1.2 Million Mark; PCS Subscribers Reach 600,000;
Broadband Subscribers Grow to
Nearly 170,000
DENVER - Capitalizing on continued brisk expansion in its growth businesses -
particularly its PCS Wireless business - U S WEST (NYSE: USW) announced today
first quarter normalized, diluted earnings per share growth of 11.5 percent on a
12.9 percent rise in normalized net income.
Propelling the $0.87 normalized diluted EPS and $445 million normalized net
income was an all-time best 6.6 percent quarterly revenue growth rate. Local
revenue growth of 9.5 percent was balanced between core (57 percent of the gain)
and growth (43 percent) areas.
During the quarter, subscriptions in the company's data (DSL, VDSL, and Internet
access) and wireless (PCS) growth businesses jumped 230,000, surpassing the 1.2
million mark and up 167 percent from a year ago. Much of the jump stemmed from a
dramatic rise in subscribers to U S WEST's Advanced PCS service, up almost 30
percent sequentially for the quarter to 600,000, a gain of about 135,000.
Also during the quarter, the company reported that EBITDA (Earnings Before
Interest, Taxes, Depreciation, Amortization and other) grew to $1.49 billion, up
7.4 percent from the year-ago period.
"Our top-line growth figures show that we are hitting on all cylinders - through
our growth initiatives and in our core business," said Sol Trujillo, chairman,
president and CEO of U S WEST. "And much of that top-line success is flowing to
the bottom line, despite incurring higher-than-anticipated dilution from our
growth initiatives. In short, as we near the finish line in our Qwest merger,
we're continuing the transformation of U S WEST into a growth-oriented vehicle."
- more -
<PAGE>
U S WEST First Quarter Earnings - Page 2
QUARTERTLY Growth Product Highlights
<TABLE>
<S> <C> <C> <C>
- ------------- --------------------------- ------------------- ---------------------------------------------------------
Category Revenues (comparisons are Key Product Subscriber/Penetration Levels
1Q00 over 1Q99)
- ------------- --------------------------- ------------------- ---------------------------------------------------------
- ------------- --------------------------- ------------------- ---------------------------------------------------------
Broadband o $508 million, up o U S o To date, more than 438,000, up 58,000 for the
(Data & 34 percent WEST.net quarter and 121 percent over 1Q99.
Video)
o !NTERPRISE data o MegaBit o Total "Broadband" subscribers now number
revenues were $267 Services 167,000, including all DSL, VDSL and Choice OnLine
million, up 50 (DSL) customers.
percent. o Total DSL data subscribers are 136,000.
o 95 percent of customers self-install.
o ChoiceTV o ChoiceTV (VDSL) subscribers grew to more than
& OnLine 31,000.
o 20,000 customers also subscribe to the company's
HFC-based video offering in Omaha, Neb.
- ------------- --------------------------- ------------------- ---------------------------------------------------------
- ------------- --------------------------- ------------------- ---------------------------------------------------------
PCS o ARPU of $54. o Advanced o Added almost 135,000 in the quarter for a
PCS total of 600,000.
o Total quarterly
revenue of $105 o Penetration is now 4.0 percent.
million, up 176 o
percent. Integrated o 62 percent of users subscribe to at least one
Features of the product's integrated features.
- ------------- --------------------------- ------------------- ---------------------------------------------------------
- ------------- --------------------------- ------------------- ---------------------------------------------------------
Dex o 1Q00 directory o Internet o IYP usage up nearly 101 percent.
revenues grew by 6.4 Yellow Pages
percent.
o 1Q00 Internet o Web Site
revenues were up 241 Service o More than 17,000 Internet items were sold in
percent over 1Q99. the quarter, up 127 percent over 1Q99.
- ------------- --------------------------- ------------------- ---------------------------------------------------------
- ------------- --------------------------- ------------------- ---------------------------------------------------------
Bundled o Generated $130 o Custom o 1.6 million subscribers - almost double over
Services million from bundled Choice 1Q99.
service offerings in
the quarter. o Total o At $79.95 per month, this offering - a basic
Package line, custom calling features, Internet access and
PCS - grew to 25,000 subscribers in the quarter.
- ------------- --------------------------- ------------------- ---------------------------------------------------------
</TABLE>
- more -
<PAGE>
U S WEST First Quarter Earnings - Page 3
"We continue to reach our growth milestones," said Trujillo. "And now, not only
are we leading the industry in penetration for our DSL service, but our VDSL
service is scaling up where we have it available. We also continue to have great
success with vertical features in our core business - through a combination of
innovative product rollouts and unique packaging. We now have 16 products with
more than one million subscribers, and we've nearly doubled the ratio of
features per line over the last four years."
Other first quarter highlights include:
Volumes and Penetration:
o Remained the most densely penetrated of any DSL provider nationwide, with
more than 14 percent of qualified on-line customers taking the service. U S
WEST has 257 central offices DSL equipped and serves 529 subscribers in
each of those COs - far more than any other DSL provider.
o In the quarter, added almost 21,000 customers for several of its new
privacy-related custom-calling features, including Caller ID with Privacy
Plus and No Solicitation. U S WEST added 105,000 subscribers during a
special April promotional campaign, bringing the total to 373,000.
o Residential subscriber levels at the end of the quarter for the company's
most popular custom calling features were: Caller ID, 40 percent; Call
Waiting, 37 percent; Voice Messaging, 21 percent.
o The number of primary rate ISDN lines in service increased 67 percent over
last year. Total ISDN lines grew 22 percent.
o Added 345,000 access lines over the past year. On a
"voice-grade-equivalent" basis, business access line growth was 28 percent.
o On the small business side, total access lines equipped with Centrex 21
services grew to 573,000, a 28 percent year-over-year increase.
o During the quarter, the company saw continuing impacts from growth in its
wholesale business reflected in both line growth and pricing. It now has
re-sold nearly 578,000 lines to competitors, up from 444,000 lines at the
end of first quarter, 1999. Recently, the company successfully negotiated
DSL line-sharing agreements with a consortium of CLECs - helping pave the
way for completion of its Qwest merger.
Sales and Revenues:
o Generated $105 million in quarterly revenue from PCS customers, up 176
percent over first quarter, 1999. More than 62 percent of Advanced PCS
customers now subscribe to at least one of the company's integrated
features, and these customers are less likely to look for a competitive
offering.
o Revenues from U S WEST.net and MegaBit Services grew 133 percent
year-over-year.
o Frame relay revenues increased by almost 28 percent quarter-over-quarter
and ISDN revenues jumped by 22 percent quarter-over-quarter.
- more -
<PAGE>
U S WEST First Quarter Earnings - Page 4
o A 20 percent increase compared with first quarter 1999 in private line and
special access revenues, which totaled $332 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 U S WEST Dex grew EBITDA by 15.4 percent and net income by 16.9 percent
year over year.
o During the quarter, consumer revenues from vertical services increased by
an industry-leading 16.5 percent, compared to first quarter 1999.
o Toll revenues dropped by 39 percent during the quarter. IntraLATA
long-distance revenues comprise just over 3 percent of U S WEST's total
revenues.
Costs and Margins:
o Capital expenditures were $1.2 billion, down $160 million sequentially from
fourth quarter, 1999. These investments continue to bolster service levels
for traditional services and aid in deployment of new services.
o Growth initiatives impacted EPS by $0.26 for the quarter versus $0.16 for
first quarter, 1999.
o Employee-related expenses increased by 4.0 percent during the quarter. This
reflects increased headcount of more than 2,500 for the quarter, offset by
a $49 million increase in the pension credit, driven by an improvement in U
S WEST's pension investments.
"We've been very aggressive in both our capital programs and in adding employees
over the last 12 months, specifically to address growth opportunities and
service improvements. And it's paying off," said Trujillo. "In most areas, our
service is now the best it's been in more than five years."
Three items affected U S WEST's reported net income and EPS during the quarter:
o The company realized an after-tax gain of $49 million ($0.10 per share)
during the quarter on the sale of certain Internet-related investments.
o The company reported an after-tax loss of $81 million ($0.16 per share) to
recognize the decline in market value of a portion of its stake in Global
Crossing, Ltd. (NASDAQ: GBLX). In the fourth quarter, U S WEST monetized a
portion of this stake, but maintained economic exposure to changes in
Global Crossing's share price. The drop in Global Crossing's share price at
the end of March led to this first quarter booking.
o Also during the quarter, the company incurred about $9 million after tax
($0.02 per share) in merger-related expenses.
These items caused U S WEST's reported net income to be $404 million, up 2.5
percent, and reported diluted EPS to be $0.79, up 1.3 percent.
- more -
<PAGE>
U S WEST First Quarter Earnings - Page 5
About U S WEST
U S WEST (NYSE: USW) is a leading broadband and communications service provider,
with more than $13 billion in annual revenues. U S WEST leads the industry in
deploying next-generation broadband ADSL and VDSL Internet access and data/video
services; offers the nation's first and only `one-number' advanced wireless
service that integrates customers' home or business phones with their wireless
PCS; and provides multimedia advertising services, including Internet & print
directories. The company has nearly 2 million miles of deployed fiber in the
U.S., provides local exchange services to more than 25 million customers in 14
states, and provides wireless services to more than 600,000 customers and data
services to more than 800,000 customers nationally.
U S WEST is merging with Qwest Communications International Inc. The
combination, to be named Qwest Communications International Inc., will create a
communications powerhouse with a market capitalization of more than $70 billion,
headquartered in Denver and employing about 64,000 people worldwide. U S WEST
and Qwest will unite the nation's most innovative local, wireless and broadband
communications firm with one of the world's most advanced fiber-optic networks
and broadband Internet providers. Together, the two firms will have more than 3
million miles of deployed fiber in the U.S. and worldwide, 29 million customers
and a local network that is 99.2 percent digitally switched. For more
information about U S WEST, go to 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); (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 additional
services and/or advanced new services to customers, such as broadband data,
wireless (including the purchase of spectrum licenses) 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 announced
merger with Qwest Communications International Inc. and subequent integration of
the businesses of the two companies. 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 6:30 a.m. (MDT) by accessing U S WEST's Internet site:
www.uswest.com.
PRO FORMA CONSOLIDATED STATEMENTS OF INCOME (1)(2) U S WEST, INC.
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended
In millions, except March 31, %
per share amounts 2000 1999 Change
- ----------------------------------- ------- --------
<S> <C> <C> <C>
OPERATING REVENUES
Local services $ 2,040 $ 1,863 9.5
Access services 709 671 5.7
Directory services 347 326 6.4
Long-distance services 107 174 (38.5)
Other services 174 134 29.9
------- --------
Total operating revenues 3,377 3,168 6.6
------- --------
OPERATING EXPENSES
Employee-related 1,167 1,122 4.0
Other operating 717 656 9.3
Depreciation & amort 586 602 (2.7)
-------- --------
Total operating expenses 2,470 2,380 3.8
-------- --------
Operating Income 907 788 15.1
OTHER INCOME\EXPENSE
Interest expense 211 153 37.9
Change in market value of Global
Crossing derivatives 129 - -
Gain on sales of investments (79) - -
Other (income)expense (1) 1 (200.0)
-------- --------
Income before income taxes 647 634 2.1
Income tax provision 243 240 1.3
-------- --------
NET INCOME $ 404 $ 394 2.5
======== ========
Basic earnings per share $ 0.80 $ 0.78 2.6
======== ========
Basic average shares
outstanding 507.2 503.3 0.8
======== ========
Diluted earnings per share $ 0.79 $ 0.78 1.3
======== ========
Diluted average shares
outstanding 514.3 508.1 1.2
======== ========
<FN>
<F1>
(1) Certain reclassifications have been made to 1999 amounts to conform with the
current presentation.
<F2>
(2) The results for 1999 include pro forma adjustments for the change in
accounting principle to recognize revenues and expenses for directory publishing
under the "point of publication" method from the "amortization" method, as if
the company had always used this method.
6
</FN>
</TABLE>
PRO FORMA EARNINGS NORMALIZATION SCHEDULE U S WEST, INC.
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended
In millions, except March 31, %
per share amounts 2000 1999 Change
- ----------------------------------- -------- --------
NORMALIZED INCOME:
<S> <C> <C> <C>
Reported net income $ 404 $ 394 2.5
Adjustments:
Merger related costs 9 - -
Change in market value of Global
Crossing derivatives 81 - -
Gain on sales of investments (49) - -
-------- --------
Normalized income $ 445 $ 394 12.9
======== ========
NORMALIZED BASIC
EARNINGS PER SHARE:
Reported basic earnings
per share $ 0.80 $ 0.78 2.6
Adjustments:
Merger related costs 0.02 - -
Change in market value of Global
Crossing derivatives 0.16 - -
Gain on sales of investments (0.10) - -
-------- --------
Normalized basic
earnings per share $ 0.88 $ 0.78 12.8
======== ========
NORMALIZED DILUTED EARNINGS
PER SHARE:
Reported diluted earnings
per share $ 0.79 $ 0.78 1.3
Adjustments:
Merger related costs 0.02 - -
Change in market value of Global
Crossing derivatives 0.16 - -
Gain on sales of investments (0.10) - -
-------- --------
Normalized diluted earnings
per share $ 0.87 $ 0.78 11.5
======== ========
7
</TABLE>
CONSOLIDATED BALANCE SHEETS U S WEST, Inc.
<TABLE>
<CAPTION>
(UNAUDITED)
March 31, December 31,
In millions 2000 1999
- ------------------------------------------ ---------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 82 $ 78
Accounts receivable, net 2,355 2,455
Receivable from Global Crossing Ltd.
sale of investment - 1,140
Inventories and supplies 302 272
Deferred directory costs 94 85
Deferred tax asset 31 46
Prepaid and other 185 116
---------- ------------
Total current assets 3,049 4,192
Property, plant and equipment - net 16,932 16,404
Investments 1,085 1,290
Other assets - net 1,635 1,386
---------- ------------
Total assets $ 22,701 $ 23,272
========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 2,353 $ 2,882
Accounts payable 1,503 1,700
Accrued expenses 1,698 1,840
Advance billings and deposits 354 344
---------- ------------
Total current liabilities 5,908 6,766
Long-term debt 10,247 10,189
Postretirement and other postemployment
benefit obligations 2,838 2,890
Deferred taxes, credits and other 2,393 2,172
Stockholders' equity 1,315 1,255
---------- ------------
Total liabilities and
stockholders' equity $ 22,701 $ 23,272
========== ============
8
</TABLE>
CONSOLIDATED PRO FORMA STATEMENTS OF CASH FLOWS U S WEST, Inc.
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended
March 31,
In millions 2000 1999(1)
- ------------------------------------------------- -------- ---------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 404 $ 394
Adjustments to net income:
Depreciation and amortization 586 602
Loss on market value of derivatives 129 -
Gain on sales of investments (79) -
Deferred income taxes and amortization
of investment tax credits 84 12
Changes in operating assets and liabilities:
Accounts receivable 100 55
Inventories, supplies and other current assets (97) (116)
Accounts payable, accrued expense
and advance billings (181) 51
Other (139) (61)
- ------------------------------------------------- -------- ---------
Cash provided by operating activities 807 937
- ------------------------------------------------- -------- ---------
INVESTING ACTIVITIES
Expenditures for property, plant and equipment (1,277) (753)
Payments on disposals of property,
plant and equipment (9) (8)
Proceeds from sale of Global Crossing stock 1,140 -
Other 136 (11)
- ------------------------------------------------- -------- ---------
Cash used for investing activities (10) (772)
- ------------------------------------------------- -------- ---------
FINANCING ACTIVITIES
Net(reductions)proceeds from short-term debt (520) 256
Repayments of long-term debt (32) (181)
Proceeds from issuance of common stock 30 16
Dividends paid on common stock (271) (269)
- ------------------------------------------------- -------- ---------
Cash used for financing activities (793) (178)
- ------------------------------------------------- -------- ---------
CASH AND CASH EQUIVALENTS
Increase(Decrease) 4 (13)
Beginning balance 78 49
- ------------------------------------------------- -------- ---------
Ending balance $ 82 $ 36
================================================= ======== =========
<FN>
(1) The results for 1999 include pro forma adjustments for the change in
accounting principle to recognize revenues and expenses for directory publishing
under the "point of publication" method from the "amortization" method, as if
the company had always used this method.
</FN>
9
</TABLE>
SELECTED CONSOLIDATED DATA U S WEST, INC.
(UNAUDITED)
<TABLE>
<CAPTION>
As of and for the
Quarter Ended
March 31, %
2000 1999 Change
- ---------------------------------------- -------- ------- -------
<S> <C> <C> <C>
Voice Grade Equivalent Lines
in Service (with OC3/SST)
(thousands):
Business 23,575 18,416 28.0
Consumer 12,156 11,816 2.9
-------- -------
Total VGE 35,731 30,232 18.2
======== =======
Access lines
(thousands):
Business 5,048 4,972 1.5
Consumer 12,068 11,799 2.3
-------- -------
Total access lines 17,116 16,771 2.1
======== =======
Calendarized access minutes of use (millions):
Interstate 16,156 15,565 3.8
Intrastate 3,457 3,163 9.3
-------- -------
Total minutes of use 19,613 18,728 4.7
======== =======
Wireless/PCS:
Revenues (millions) $ 105 $ 38 176.3
Subscribers (thousands) 600 219 174.0
ARPU (Dollars) $ 54 $ 54 0.0
Penetration 4.0% 1.6% 150.0
Data Revenues (millions):
Frame Relay $ 50.1 39.3 27.5
Private Line
LAN Interconnect 38.6 35.0 10.3
ISDN 63.7 52.3 21.8
USW.Net/Megabit(DSL) 31.7 13.6 133.1
Other !NTERPRISE 82.6 38.1 116.8
-------- -------
Subtotal !NTERPRISE 266.7 178.3 49.6
Other Special Access
& Private Line 241.4 200.9 20.2
-------- -------
Total Data Revenues $ 508.1 $ 379.2 34.0
======== =======
Total Special Access
and Private Line (#1) $ 332.4 276.2 20.3
======== =======
Additional Data Stats:
XDSL Equipped
Central Offices (C.O.) 257 215 19.5
Subscribers per XDSL
Equipped C.O.'s 529 148 257.4
Employees:
U S WEST, Inc. 60,785 55,324 9.9
Telephone
operations only 48,406 47,007 3.0
Telephone empl per
10,000 access lines 28.3 28.0 1.1
Dividends per
common share $ 0.535 $ 0.535 0.0
Common shares
outstanding (millions) 507.6 503.5 0.8
Capital expend (millions) $ 1,241 $ 787 57.7
EBITDA (millions) (#2) 1,493 1,390 7.4
EBITDA margin 44.3% 43.9% 0.9
Debt-to-capital
ratio (#3) 63.6% 57.4% 10.8
<FN>
<F1>
# 1: Includes Frame Relay, Private Line LAN Interconnect, ATM and
Other Special Access and Private Line revenues.
<F2>
# 2: Earnings before interest, taxes, depreciation, amortization,
and other (EBITDA).
<F3>
# 3: Telephone operations only.
</FN>
</TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS U S WEST COMMUNICATIONS, INC.
(UNAUDITED) (Telephone Operations Only)
<TABLE>
<CAPTION>
Quarter Ended
March 31, %
In millions 2000 1999 Change
- ------------------------------------------- ------- ------- --------
<S> <C> <C> <C>
OPERATING REVENUES
Local services $2,045 $1,871 9.3
Access services 710 672 5.7
Long-distance services 106 171 (38.0)
Other services 90 74 21.6
------- -------
Total operating revenues 2,951 2,788 5.8
------- -------
OPERATING EXPENSES
Employee-related 802 893 (10.2)
Other operating 777 624 24.5
Depreciation & amort 564 585 (3.6)
------- -------
Total operating expenses 2,143 2,102 2.0
------- -------
Operating income 808 686 17.8
Interest expense 119 89 33.7
Other expense 6 12 (50.0)
------- -------
Income before income
taxes 683 585 16.8
Income tax provision 258 216 19.4
------- -------
NET INCOME $425 $369 15.2
======= =======
</TABLE>
CONSOLIDATED BALANCE SHEETS U S WEST COMMUNICATIONS, INC.
(Telephone Operations Only)
<TABLE>
<CAPTION>
(UNAUDITED)
March 31, December 31,
In millions 2000 1999
- ----------------------------------------- ------------ -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 66 $ 61
Accounts receivable, net 1,765 1,811
Inventories and supplies 217 211
Deferred tax asset 141 154
Prepaid and other 147 95
------------ -------------
Total current assets 2,336 2,332
Property, plant and equipment - net 16,546 16,049
Other assets - net 1,478 1,597
------------ -------------
Total assets $20,360 $19,978
============ =============
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Short-term debt $2,393 $1,684
Accounts payable 1,576 1,721
Accrued expenses 1,541 1,560
Advance billings and deposits 352 343
------------ -------------
Total current liabilities 5,862 5,308
Long-term debt 5,464 5,408
Postretirement and other postemployment
benefit obligations 2,406 2,462
Deferred taxes, credits and other 2,125 2,080
Stockholder's equity 4,503 4,720
------------ -------------
Total liabilities and
stockholder's equity $20,360 $19,978
============ =============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
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