<PAGE> 1
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: January 21, 1994
U S WEST, INC.
A Colorado Commission File IRS Employer Identification
Corporation Number 1-8611 No. 84-0926774
7800 East Orchard Road, Englewood, Colorado 80111
Telephone Number (303) 793-6500
<PAGE> 2
Item 5. Other Events
On January 21, 1994, U S WEST, Inc. (the "Company") released its
fourth-quarter earnings results. Such release is attached hereto
as Exhibit 99.
Item 7. Exhibits
99a Press Release issued by the Company, dated January
21, 1994.
99b.1 Unaudited Consolidated Statements of Income of the
Company for quarters ended December 31, 1992 and
December 31, 1993, filed in connection with the
Press Release dated January 21, 1994.
99b.2 Unaudited Selected Consolidated Data of the Company
for quarters ended December 31, 1992 and December
31, 1993, filed in connection with the Press Release
dated January 21, 1994.
99b.3 Audited Consolidated Statements of Income of the
Company for years ended December 31, 1992 and
December 31, 1993, filed in connection with the
Press Release dated January 21, 1994.
99b.4 Unaudited Selected Consolidated Data of the Company
for years ended December 31, 1992 and December 31,
1993, filed in connection with the Press Release
dated January 21, 1994.
99b.5 Audited Consolidated Balance Sheets of the Company
for years ended December 31, 1992 and December 31,
1993, filed in connection with the Press Release
dated January 21, 1994.
99b.6 Audited Consolidated Statements of Cash Flows of
the Company for years ended December 31, 1992 and
December 31, 1993, filed in connection with the
Press Released dated January 21, 1994.
99b.7 Unaudited Statement of Income from Operations of
U S WEST Communications, Inc. for quarters ended
December 31, 1992 and December 31, 1993, filed in
connection with the Press Release dated January 21,
1994.
<PAGE> 3
99b.8 Unaudited Statement of Income from Operations of
U S WEST Communications, Inc. for years ended
December 31, 1992 and December 31, 1993, filed in
connection with the Press Release dated January 21,
1994.
<PAGE> 4
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.
/s/ STEPHEN E. BRILZ
By __________________________
Stephen E. Brilz
Senior Attorney and
Assistant Secretary
Dated: January 21, 1994
<PAGE> 1
EXHIBIT 99A
RELEASE DATE: JANUARY 20, 1994
CONTACT: LOIS LEACH 303-793-6355
BLAIR JOHNSON 303-793-6296
U S WEST REPORTS RECORD GROWTH IN TELEPHONE LINES AND
CELLULAR SUBSCRIBERS;
TAKES BOLD ACTION TO ENSURE SUCCESS IN NEW MARKETS
ENGLEWOOD, Colo. -- U S WEST (NYSE: USW) today reported increased
revenues and income from its continuing operations in 1993, before
the effects of one-time charges.* The company also reported record
growth in telephone access lines and cellular subscribers.
The number of telephone access lines served by U S WEST
Communications, the company's telecommunications subsidiary, grew
by 498,000 in 1993 -- a record 3.7 percent increase. In addition,
minutes of use, an indicator of long-distance calling volumes, grew
by 8.5 percent in 1993.
Meanwhile, U S WEST Cellular added a record 186,000 subscribers in
1993 -- a 45 percent increase over 1992.
U S WEST's revenues grew in 1993 by $471 million to $10.29 billion
- -- a 4.8 percent increase over 1992.
Pre-tax income from continuing operations** increased 11.2 percent
over 1992, before the effects of one-time charges. After-tax
income, on the same basis, increased 6.0 percent to $1.14 billion,
or $2.72 per share. By comparison, 1992 income was $1.08 billion,
or $2.61 per share.
"1993 was a landmark year for U S WEST," said Richard McCormick,
U S WEST chairman and chief executive officer. "U S WEST and Time
Warner Entertainment forced a strategic alliance, making U S WEST
the first major telecommunications company to announce -- and
complete -- a partnership with a leading entertainment company to
deliver interactive, broadband services outside the phone company's
territory. Our partnership with Time Warner Entertainment will
combine the expertise of both companies to generate long-term
growth in earnings and cash flow.
"In February," McCormick said, "we also were the first regional
Bell company to commit to upgrading its phone system to a broadband
network so we can offer interactive video services to our current
customers. We've already started construction in Omaha for the
largest multimedia trial in the United States, and earlier this
month we announced plans to expand our broadband network to Denver,
Minneapolis-St. Paul, Portland, Ore., and Boise, Idaho."
<PAGE> 2
McCormick also noted that U S WEST took two other major steps to
prepare for the dramatic changes under way in the local
telecommunications business.
"We're 'reengineering' our business practices to improve customer
service and reduce costs," he said. "And we've adopted new
accounting methods to speed the depreciation of telephone wires and
switches."
1993 revenue growth and continued cost controls resulted in a 6.7
percent increase in U S WEST's earnings before interest, taxes,
depreciation, amortization and other income, or EBITDA -- excluding
the effects of a one-time restructuring charge. EBITDA is a
financial tool used to evaluate a company's fundamental operating
performance.
Including the effects of previously announced one-time charges, the
company reported a 1993 net loss of $2.81 billion, or $6.69 per
share. (*See page 4 for more detail on these one-time charges.)
Fourth-quarter 1993 revenues totaled $2.67 billion -- 5.8 percent
more than the same period in 1992.
Fourth quarter income from continuing operations was $264.1 million
in 1993, compared with $261.9 million in 1992. On a per-share
basis, earnings declined slightly to $0.62 compared with $0.63 in
1992, reflecting the fourth-quarter sale of 22 million new shares
of U S WEST stock.
Other 1993 U S WEST developments include:
- The introduction in September of Mercury One-2-One -- the
world's first commercial Personal Communications Network, or PCN.
Unveiled in the United Kingdom with Cable & Wireless PLC, Mercury
One-2-One is a new generation of wireless telephones priced for the
mass market. Customer response to Mercury One-2-One has exceeded
expectations.
- Significant customer growth in the United Kingdom, where
U S WEST and Tele-Communications Inc. are the largest providers of
combined cable TV and telephone service. Operating in 24
franchises, the joint venture ended 1993 with 226,000 cable TV
customers -- up markedly from the 143,000 one year ago. The
company also provides about 140,000 telephone access lines,
compared to 76,000 at the end of 1992.
- Continued strong growth in U S WEST's international cellular
markets. The number of cellular customers served by our joint
venture operations in Hungary, the Czech Republic, Slovakia and
Russia grew to 63,200 in 1993, compared to 31,500 a year ago.
<PAGE> 3
U S WEST is in the connections business, helping customers share
information, entertainment and communications services in local
markets worldwide.
# # #
* U S WEST's One-Time Charges in 1993
The one-time charges stemmed from several bold steps U S WEST took
in 1993 to prepare the company for success in the increasingly
competitive marketplace. Following are the effects of these
previously announced charges in after-tax dollars. (The per-share
amounts were diluted by the sale of 22 million shares of U S WEST's
common stock in a fourth-quarter equity offering.)
- A third-quarter restructuring charge of $610 million, or
$1.46 per share, for costs associated with reeingineering U S WEST
Communications' customer support operations, streamlining and other
initiatives throughout U S WEST;
- Extraordinary charges totaling $3.2 billion, or $7.63 per
share. Extraordinary charges reflect both a technical accounting
change -- from rules designed for regulated utilities to those
developed for competitive companies -- that accounts for $7.45 per
share; and refinancing of $2.7 billion in long-term debt at
U S WEST Communications that accounts for $0.18 per share;
- A second-quarter charge of $100 million, or $0.24 per share,
for costs associated with exiting the financial services
businesses; and
- An adjustment of $74 million, or $0.17 per share, to reflect
the cumulative tax effect resulting from the 1993 federal tax law
changes. ($54 million, or $0.13 per share, is reflected in
continuing operations; $20 million, or $0.04 per share, is
reflected in discontinued operations.)
** Continuing Operations vs. Discontinued Operations
Continuing operations represent company results minus the
contributions of U S WEST's financial services businesses, which
the company is exiting. These businesses are being treated as
discontinued operations for accounting purposes.
###
<PAGE> 1
EXHIBIT 99B.1
<TABLE>
CONSOLIDATED STATEMENTS OF U S WEST, Inc.
INCOME (UNAUDITED)
<CAPTION>
Quarter Ended
Dollars in millions, December 31, %
except per share amounts 1993 1992 Change
- --------------------------------------------------- ----------- -------
<S> <C> <C> <C>
SALES AND OTHER REVENUES $2,666.0 $2,519.0 5.8
EXPENSES
Employee-related costs 941.0 968.0 (2.8)
Other operating expenses 562.3 486.5 15.6
Taxes other than income taxes 100.0 77.6 28.9
Depreciation and amortization 489.2 473.8 3.3
Interest expense 125.1 109.2 14.6
Other income (expense) - net (54.3) (34.6) 56.9
----------- ----------- ---------
Income from continuing operations
before income taxes 394.1 369.3 6.7
Provision for income taxes 130.0 107.4 21.0
----------- ----------- ---------
Income from continuing operations 264.1 261.9 0.8
Discontinued operations - 41.7 -
----------- ----------- ---------
NET INCOME $264.1 $303.6 (13.0)
=========== ============ =========
Earnings per share:
Continuing operations $0.62 $0.63 (1.6)
Discontinued operations - 0.10 -
----------- ----------- ---------
EARNINGS PER SHARE $0.62 $0.73 (15.1)
=========== ============ =========
<FN>
Note: Certain reclassifications within the financial
statements have been made to conform to the current year
presentation.
</TABLE>
1
<PAGE> 1
EXHIBIT 99B.2
<TABLE>
SELECTED CONSOLIDATED DATA (UNAUDITED) U S WEST, Inc.
<CAPTION>
Quarter Ended
Dollars in millions, December 31,
except per share amounts 1993 1992 % Change
- -------------------------------------------------------------------- --------
<S> <C> <C> <C>
Dividends per share $0.535 $0.53 0.9
Book value per share $13.29 $19.95 -
Capital expenditures $879.9 $906.2 (2.9)
Return on shareowners' equity 19.9% 14.7% -
Debt-to-capital ratio (Note 1) 55.1% 39.6% -
Average shares outstanding (thousands) 429,196 413,836 3.7
Shares outstanding (thousands) 441,140 414,462 6.4
Employees 60,778 63,707 (4.6)
TELEPHONE COMPANY STATISTICS
Access lines (thousands):
Business 3,899 3,712 5.0
Consumer 9,944 9,633 3.2
Total access lines 13,843 13,345 3.7
Billed access minutes of use (millions):
Interstate 10,492 9,647 8.8
Intrastate 1,978 1,782 11.0
Total access minutes of use 12,470 11,429 9.1
Debt-to-capital ratio 63.0% 43.6% -
Capital expenditures $779.4 $822.8 (5.3)
Employees 49,668 52,423 (5.3)
SELECTED CELLULAR AND PAGING DATA
REVENUES
Cellular service (Note 2) $124.3 $95.4 30.3
Cellular equipment (Note 2) 24.0 12.8 87.5
Paging sales and service 14.3 12.6 13.5
SELECTED STATISTICS
Cellular subscribers (Note 3) 601,000 415,000 44.8
Total adjusted POPs (millions) 18.2 17.9 1.1
Pagers in service 285,000 247,000 15.4
<FN>
Note 1: 1993 and 1992 debt-to-capital ratio including discontinued
operations is 59.7% and 51.7%.
Note 2: Restated to include RSA markets and reclassification of
first payment defaults and intraLATA toll revenue.
Note 3: Cellular subscribers have been restated to include MSA, RSA
and wholesale subsribers.
</TABLE>
2
<PAGE> 1
EXHIBIT 99B.3
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME U S WEST, Inc.
<CAPTION>
Year Ended
Dollars in millions, December 31, %
except per share amounts 1993 1992 Change
- ------------------------------------ ---------- ---------- --------
<S> <C> <C> <C>
SALES AND OTHER REVENUES $10,293.6 $9,822.6 4.8
EXPENSES
Employee-related costs 3,630.7 3,521.1 3.1
Other operating expenses 2,018.7 1,960.9 2.9
Taxes other than income taxes 417.0 377.6 10.4
Depreciation and amortization 1,954.5 1,880.5 3.9
Restructuring charge 1,000.0 - -
Interest expense 439.3 453.5 (3.1)
Other income (expense) - net (88.7) (59.8) 48.3
---------- ---------- --------
Income from continuing
operations before income taxes 744.7 1,569.2 (52.5)
Provision for income taxes 268.8 493.4 (45.5)
---------- ---------- --------
Income from continuing
operations 475.9 1,075.8 (55.8)
Discontinued operations:
Income to June 1, 1993,
net of tax* 38.5 103.6 (62.8)
Estimated loss from June 1,
1993 through disposal,
net of tax (100.0) - -
Income tax rate change (20.0) - -
---------- ---------- --------
Income before extraordinary
items and cumulative effect
of change in accounting
principles 394.4 1,179.4 (66.6)
Extraordinary items:
Discontinuance of SFAS No. 71,
net of tax (3,123.0) - -
Early extinguishment of debt,
net of tax (77.2) - -
Cumulative effect of change in
accounting principles related
to postretirement and
postemployment benefits,
net of tax - (1,793.4) -
---------- ---------- --------
NET LOSS ($2,805.8) ($614.0) -
========== ========== ========
<FN>
* For 1992 through December 31
Note: Certain reclassifications within the financial
statements have been made to conform to the current year
presentation.
</TABLE>
<PAGE> 2
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME U S WEST, Inc.
<CAPTION>
Year Ended
December 31, %
1993 1992 Change
- ------------------------------------ ---------- ---------- --------
<S> <C> <C> <C>
Earnings (loss) per share:
Continuing operations $1.13 $2.61 (56.7)
Discontinued operations:
Income to June 1, 1993* 0.09 0.25 (64.0)
Estimated loss from June 1,
1993 through disposal,
net of tax (0.24) - -
Income tax rate change (0.04) - -
Extraordinary items:
Discontinuance of SFAS
No. 71, net of tax (7.45) - -
Early extinguishment of debt,
net of tax (0.18) - -
Cumulative effect of change
in accounting principles - (4.35) -
---------- ---------- --------
LOSS PER SHARE ($6.69) ($1.49) -
========== ========== ========
<FN>
* For 1992 through December 31
Note: Certain reclassifications within the financial
statements have been made to conform to the current year
presentation.
</TABLE>
<PAGE> 1
EXHIBIT 99B.4
<TABLE>
SELECTED CONSOLIDATED DATA (UNAUDITED) U S WEST, Inc.
<CAPTION>
Year Ended
Dollars in millions, December 31,
except per share amounts 1993 1992 % Change
- ----------------------------------------------------------------- --------
<S> <C> <C> <C>
Dividends per share $2.14 $2.12 0.9
Book value per share $13.29 $19.95 -
Capital expenditures $2,441.2 $2,554.2 (4.4)
Return on shareowners' equity (Note 1) * 14.4% -
Debt-to-capital ratio (Note 2) 55.1% 39.6% -
Average shares outstanding (thousands) 419,365 412,518 1.7
Shares outstanding (thousands) 441,140 414,462 6.4
Employees 60,778 63,707 (4.6)
TELEPHONE COMPANY STATISTICS
Access lines (thousands):
Business 3,899 3,712 5.0
Consumer 9,944 9,633 3.2
Total access lines 13,843 13,345 3.7
Billed access minutes of use (millions):
Interstate 40,594 37,413 8.5
Intrastate 7,529 6,956 8.2
Total access minutes of use 48,123 44,369 8.5
Debt-to-capital ratio 63.0% 43.6% -
Capital expenditures $2,181.9 $2,356.6 (7.4)
Employees 49,668 52,423 (5.3)
SELECTED CELLULAR AND PAGING DATA
REVENUES
Cellular service (Note 3) $442.9 $350.2 26.5
Cellular equipment (Note 3) 63.5 45.0 41.1
Paging sales and service 54.4 47.2 15.3
SELECTED STATISTICS
Cellular subscribers (Note 4) 601,000 415,000 44.8
Total adjusted POPs (millions) 18.2 17.9 1.1
Pagers in service 285,000 247,000 15.4
<FN>
* See fourth quarter
Note 1: 1992 return on shareowners' equity is based on income
before cumulative effect of change in accounting principles.
Note 2: 1993 and 1992 debt-to-capital ratio including discontinued
operations is 59.7% and 51.7%.
Note 3: Restated to include RSA markets and reclassification of
first payment defaults and intraLATA toll revenue.
Note 4: Cellular subscribers have been restated to include MSA, RSA
and wholesale subscribers.
</TABLE>
<PAGE> 1
EXHIBIT 99B.5
<TABLE>
CONSOLIDATED BALANCE SHEETS U S WEST, Inc.
<CAPTION>
December 31,
In millions 1993 1992
- ------------------------------------------ ------------------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $128.2 $158.9
Accounts and notes receivable 1,570.1 1,498.6
Inventories and supplies 192.7 196.6
Prepaid and other 608.8 354.7
------------------------
Total current assets 2,499.8 2,208.8
------------------------
Property, plant and equipment - net 13,231.8 17,946.4
Investment in Time Warner Entertainment 2,552.4 -
Other assets 1,841.2 2,419.6
Net assets of discontinued operations 554.5 885.9
------------------------
Total assets $20,679.7 $23,460.7
========================
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities
Short-term debt $1,776.2 $582.5
Accounts payable 977.0 960.5
Employee compensation 386.3 392.4
Other 1,842.0 1,238.5
------------------------
Total current liabilities 4,981.5 3,173.9
------------------------
Long-term debt 5,422.7 4,847.4
Postretirement and other postemployment
benefit obligations 2,698.6 2,825.0
Deferred taxes and credits 1,715.7 4,346.5
Shareowners' equity
Common shares 6,996.6 5,770.2
Retained earnings (deficit) (892.4) 2,792.1
LESOP guarantee (243.0) (294.4)
------------------------
Total shareowners' equity 5,861.2 8,267.9
------------------------
Total liabilities and
shareowners' equity $20,679.7 $23,460.7
========================
<FN>
Note 1: All assets and liabilities associated with
discontinued operations are presented in the line item
"Net assets of discontinued operations".
Note 2: Certain reclassifications within the financial
statements have been made to conform to the current year
presentation.
</TABLE>
<PAGE> 1
EXHIBIT 99B.6
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS U S WEST, Inc.
<CAPTION>
Year Ended Dec. 31,
In millions 1993 1992
- ---------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss ($2,805.8) ($614.0)
Adjustments to loss:
Depreciation and amortization 1,954.5 1,880.5
Discontinuance of SFAS No. 71, net of tax 3,123.0 -
Discontinued operations 81.5 (103.6)
Cumulative effect of change in accounting
principles, net of tax - 1,793.4
Deferred income taxes and amortization
of investment tax credits (225.1) 4.3
Restructuring charge 1,000.0 -
Changes in operating assets and liabilities:
Accounts and notes receivable (90.1) 44.1
Inventories, supplies and other (55.9) (24.5)
Accounts payable and accrued liabilities 198.7 65.4
Other - net 157.0 211.7
- ---------------------------------------------------------------------------
Cash provided by operating activities 3,337.8 3,257.3
- ---------------------------------------------------------------------------
INVESTING ACTIVITIES
Expenditures for property, plant and equipment (2,449.2) (2,249.6)
Investment in Time Warner Entertainment (1,556.9) -
Proceeds from disposals of property, plant and
equipment 44.8 75.3
Other - net (240.0) (82.2)
- ---------------------------------------------------------------------------
Cash (used) for investing activities (4,201.3) (2,256.5)
- ---------------------------------------------------------------------------
FINANCING ACTIVITIES
Net proceeds from short-term debt 687.4 25.2
Proceeds from issuance of long-term debt 2,281.7 344.1
Repayments of long-term debt (3,085.0) (769.9)
Dividends paid (812.0) (796.0)
Proceeds from issuance of common stock 1,150.1 91.3
- ---------------------------------------------------------------------------
Cash provided by (used for) financing activities 222.2 (1,105.3)
- ---------------------------------------------------------------------------
Cash (used for) continuing operations (641.3) (104.5)
- ---------------------------------------------------------------------------
Cash provided by (used for) discontinued
operations 610.6 (237.5)
- ---------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
Decrease (30.7) (342.0)
Beginning balance 158.9 500.9
- ---------------------------------------------------------------------------
Ending balance $128.2 $158.9
===========================================================================
<FN>
Note: Certain reclassifications within the financial statements have been
made to conform to the current year presentation.
</TABLE>
<PAGE> 1
EXHIBIT 99B.7
<TABLE>
INCOME FROM OPERATIONS U S WEST COMMUNICATIONS, Inc
(UNAUDITED)
<CAPTION>
Quarter Ended
December 31,
Dollars in millions 1993 1992 % Change
- -----------------------------------------------------------------
<S> <C> <C> <C>
OPERATING REVENUES
Local service $987.1 $934.4 5.6
Access charges - interstate 554.3 515.6 7.5
Access charges - intrastate 169.5 171.4 (1.1)
Long distance network service 358.9 355.5 1.0
Miscellaneous 145.8 128.7 13.3
--------------------------------
Total operating revenues 2,215.6 2,105.6 5.2
OPERATING EXPENSES
Employee-related costs 757.5 773.6 (2.1)
Other operating expenses 412.4 366.8 12.4
Taxes other than income taxes 89.5 70.1 27.7
Depreciation and amortization 451.9 436.4 3.6
--------------------------------
Total operating expenses 1,711.3 1,646.9 3.9
--------------------------------
INCOME FROM OPERATIONS $504.3 $458.7 9.9
================================
<FN>
Note: Certain reclassifications within the financial
statements have been made to conform to the current year
presentation.
</TABLE>
<PAGE> 1
EXHIBIT 99B.8
<TABLE>
INCOME FROM OPERATIONS U S WEST COMMUNICATIONS, Inc.
<CAPTION>
Year Ended
December 31,
Dollars in millions 1993 1992 % Change
- -----------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING REVENUES
Local service $3,829.1 $3,674.3 4.2
Access charges - interstate 2,146.9 2,046.9 4.9
Access charges - intrastate 682.0 672.8 1.4
Long distance network service 1,441.5 1,419.7 1.5
Miscellaneous 556.4 510.0 9.1
-----------------------------------
Total operating revenues 8,655.9 8,323.7 4.0
OPERATING EXPENSES
Employee-related costs 2,916.6 2,862.6 1.9
Other operating expenses 1,599.4 1,556.2 2.8
Taxes other than income taxes 379.8 348.1 9.1
Depreciation and amortization 1,806.5 1,735.4 4.1
Restructuring charge 880.0 - -
-----------------------------------
Total operating expenses 7,582.3 6,502.3 16.6
-----------------------------------
INCOME FROM OPERATIONS $1,073.6 $1,821.4 (41.1)
====================================
<FN>
Note: Certain reclassifications within the financial
statements have been made to conform to the current year
presentation.
</TABLE>
