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): February 12, 1997
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 1-8611 No. 84-0926774
7800 East Orchard Road, Englewood, Colorado 80111
(Address of principal executive offices)
Telephone Number (303) 793-6500
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events
On February 12, 1997, U S WEST Communications Group released its fourth
quarter earnings results. In addition, U S WEST Media Group released its
fourth quarter earnings results on February 13, 1997. The releases and
financial statements are attached hereto as Exhibits.
Item 7. Exhibits
Exhibit Description
- - ------- -----------
27 Financial Data Schedule.
99A Press Release issued February 12, 1997 concerning the earnings results
of U S WEST Communications Group for the fourth quarter of 1996.
99A.1 Unaudited Combined Statements of Income of U S WEST Communications
Group for the quarters ended December 31, 1995 and 1996, filed in connection
with the Press Release dated February 12, 1997.
99A.2 Unaudited Earnings Normalization Schedule of U S WEST Communications
Group for the quarters ended December 31, 1995 and 1996, filed in connection
with the Press Release dated February 12, 1997.
99A.3 Unaudited Selected Combined Group Data of U S WEST Communications
Group for the quarters ended December 31, 1995 and 1996, filed in connection
with the Press Release dated February 12, 1997.
99A.4 Unaudited Combined Balance Sheets of U S WEST Communications Group
for the years ended December 31, 1995 and 1996, filed in connection with the
Press Release dated February 12, 1997.
99A.5 Unaudited Combined Statements of Cash Flows of U S WEST
Communications Group for the years ended December 31, 1995 and 1996, filed in
connection with the Press Release dated February 12, 1997.
99A.6 Unaudited Statements of Income of U S WEST Communications, Inc. for
the quarters ended December 31, 1995 and 1996 and years ended December 31,
1995 and 1996, filed in connection with the Press Release dated February 12,
1997.
99B Press Release issued February 13, 1997 concerning the earnings results
of U S WEST Media Group for the fourth quarter of 1996.
99B.1 Unaudited Combined Statements of Operations of U S WEST Media Group
for the quarters ended December 31, 1995 and 1996, filed in connection with
the Press Release dated February 13, 1997.
99B.2 Unaudited Selected Combined Group Data of U S WEST Media Group for
the quarters ended December 31, 1995 and 1996, filed in connection with the
Press Release dated February 13, 1997.
99B.3 Unaudited Combined Balance Sheets of U S WEST Media Group for the
years ended December 31, 1995 and 1996, filed in connection with the Press
Release dated February 13, 1997.
99B.4 Unaudited Selected Proportionate Data of U S WEST Media Group for
the quarter periods ended December 31, 1995 and 1996, filed in connection with
the Press Release dated February 13, 1997.
99C.1 Unaudited Consolidated Statements of Income of U S WEST, Inc. for
the quarter periods ended December 31, 1995 and 1996.
99C.2 Unaudited Consolidated Balance Sheets of U S WEST, Inc. for the year
ended December 31, 1995 and 1996.
99C.3 Unaudited Consolidated Statements of Cash Flows of U S WEST, Inc.
for the year ended December 31, 1995 and 1996.
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
Assistant Secretary
Dated: February 17, 1997
EXHIBIT 99A
U S WEST Communications, Inc.
1801 California Street
Denver, CO 80202
[U S WEST Communications logo and registered mark]
News Release
Release Date: February 12, 1997
Contact: Dave Banks, 303-804-6752
SOLID 4TH QUARTER OPERATIONS, RECORD ANNUAL GROWTH
GENERATE STRONG FINANCIAL RESULTS FOR
U S WEST COMMUNICATIONS GROUP
ENGLEWOOD, Colo. -- Bolstered by accelerating revenue growth, strong marketing
successes, access line gains, and tighter controls on employee related
expenses, U S WEST Communications Group reported fourth quarter normalized net
income of $304 million, an increase of 11.8 percent over 1995, and normalized
earnings per share of $.63, up 10.5 percent over 1995.
For the year, normalized net income grew 5.1 percent, to $1.16 billion from
$1.11 billion in 1995. Normalized full-year EPS for 1996 was up 3.8 percent
to $2.44 from $2.35 in 1995.
Fourth quarter and year-end highlights included the following:
- - - For the quarter, revenues rose 6.6 percent (to $2.6 billion) over fourth
quarter, 1995 -- including an 11.2 percent gain in local service revenues from
$1.11 billion in fourth quarter, 1995 to $1.24 billion in fourth quarter,
1996. Annual operating revenues were up 6.3 percent over 1995, to $10.1
billion from $9.5 billion.
- - - U S WEST Communications Group added a record 742,000 access lines in
1996, 26 percent more than it added in 1995. The company now has more than
15.4 million access lines in service, 5.0 percent more than at the end of 1995
adjusted for the sale of certain rural exchanges. This annual growth rate
includes a 7.6 percent increase for business lines, a 4.0 percent increase for
residential lines, and a gain of 30.8 percent for residential additional
lines.
- - - Strong access line growth, coupled with telephone company employee
reductions of more than 2,500 for the year, drove the
employees-per-10,000-access-lines figure for the company's telephone
operations below 30 for the first time. It dropped 9 percent for the year
from 32.4 at the end of 1995 to 29.5 at the end of 1996.
- - - Operating expense growth slowed for the second consecutive quarter,
rising just 5.0 percent.
<PAGE>
- - - Service quality improved to the best levels of the 1990s, showing marked
gains for the year. For instance, orders "Held" more than 30 days for primary
service at the end of 1996 were 864, less than half of the 1,887 at the end of
1995. Also, 90 percent of the company's customers now reach a customer
service representative within three rings.
"U S WEST Communications Group made excellent progress in all areas of the
business during 1996, particularly in the fourth quarter," said Richard
McCormick, chairman and chief executive officer of U S WEST, Inc. "Top-line
results are starting to pay off on the bottom line. That tells me we turned
the corner in many respects in 1996 and can now enter 1997 with momentum and a
real sense of optimism."
"These are the best quarterly results we've had in several years," said Sol
Trujillo, president and CEO of U S WEST Communications Group. "We had a very
successful 1996 -- our marketing effort produced record growth, we drove costs
out of the business with productivity gains and capital efficiencies, and we
made good on our promise to dramatically improve our customer service.
"I'm very pleased with our fourth quarter results," Trujillo added. "They
show -- as we planned -- that our top-line growth is flowing to the bottom
line as we aggressively become more efficient and tighten management
disciplines throughout the business."
Other highlights for the quarter and year include:
- - - A reduction in employee overtime expenses of $24 million -- or 42
percent -- in the fourth quarter, 1996 versus the same period in 1995.
- - - Continued strong revenue growth in new products, such as Caller ID,
Voice Messaging and data networking services, up approximately 57 percent for
the year. Residential penetration levels for the company's top-selling
value-added services continued to show strength: Call Waiting, 36.9 percent;
Caller ID, 20.5 percent; Voice Messaging, 16 percent.
- - - Improved capital efficiency by reducing the cost per access line added
by 27 percent over 1995. This allowed the company to keep 1996 capital
expenditures at 1995 levels even with a 26 percent increase in the number of
access lines gained during the year, as compared with 1995.
- - - The company's large business division improved revenues by 13.6 percent
for the year to $1.6 billion, while winning 110 contracts over $1 million --
some 80 percent of the contracts for which it competed.
- - - Revenues from the company's data networking division, !NTERPRISE, were
up $123 million for the year, more than a 100 percent gain over 1995 revenues.
!NTERPRISE continued to rapidly deploy its leading-edge Frame Relay network,
<PAGE>
and by year-end, had more than 38,500 Frame Relay ports in service. Just
recently, that division announced it would become the first company in the
nation to widely deploy commercial Digital Subscriber Line (DSL) services.
These services initially will serve businesses' remote-access needs.
- - - Results of a study released late last year by the respected Boston-based
research firm, The Yankee Group, showed that U S WEST Communications scores
higher than any other RBOC in customer loyalty and better than AT&T in its
territory.
- - - In early January, U S WEST Communications acquired nearly 20 million PCS
POPs in recently concluded auctions of D&E block spectrum. These licenses
will allow the company to provide integrated, digital wireless services to the
majority of the major markets in its 14-state region. U S WEST Communications
paid $2.88 per POP -- the lowest price per POP of any of the previous spectrum
bidders.
U S WEST Communications Group provides telecommunications and high-speed data
services to more than 25 million customers in 14 western and midwestern
states. The company is one of two major groups that make up U S WEST. U S WEST
is in the connections business, helping customers share information,
entertainment and communications services in local markets worldwide. U S
WEST's other major group, U S WEST Media Group (NYSE:UMG), is involved in
domestic and international cable and wireless networks, directory publishing
and interactive multimedia services.
- - -------------------------
[Safe Harbor statement: Some of the information presented in or in
connection with this announcement constitutes "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
Although the Company believes that its expectations are based on reasonable
assumptions within the bounds of its knowledge of its business and operations,
there can be no assurance that actual results will not differ materially from
its expectations. Factors that could cause actual results to differ from
expectations include: (i) different than anticipated competition from new
entrants into the local exchange and intralata toll markets, (ii) changes in
demand for the Company's products and services, including optional custom
calling features, (iii) different than anticipated employee levels, capital
expenditures, and operating expenses as a result of unusually rapid, in-region
growth, (iv) the gain or loss of significant customers, (v) pending regulatory
actions in state jurisdictions, and (vi) regulatory changes affecting the
telecommunications industry, including changes that could have an impact on
the competitive environment in the local exchange market.]
- ### -
Note: This release and the attached tables are available on the internet by
accessing U S WEST's internet site: www.uswest.com.
<PAGE>
EXHIBIT 99A.1
<TABLE>
<CAPTION>
COMBINED STATEMENTS OF INCOME U S WEST COMMUNICATIONS GROUP
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Quarter Ended Year Ended
December 31, % December 31, %
In millions 1996 1995 Change 1996 1995 Change
- - -------------------------------- ------- ------------- ------- ------
OPERATING REVENUES
Local service $1,238 $1,113 11.2 $4,770 $4,344 9.8
Interstate access 653 604 8.1 2,507 2,378 5.4
Intrastate access 199 189 5.3 770 747 3.1
Long-distance network 260 298 (12.8) 1,100 1,189 (7.5)
Other services 249 235 6.0 932 826 12.8
---------------- ----------------
Total operating revenues 2,599 2,439 6.6 10,079 9,484 6.3
---------------- ----------------
OPERATING EXPENSES
Employee-related 906 862 5.1 3,594 3,341 7.6
Other operating 457 444 2.9 1,634 1,543 5.9
Taxes other than
income taxes 98 74 32.4 389 380 2.4
Depreciation & amort 542 528 2.7 2,122 2,042 3.9
---------------- ----------------
Total operating expenses 2,003 1,908 5.0 7,739 7,306 5.9
---------------- ----------------
Income from operations 596 531 12.2 2,340 2,178 7.4
Interest expense 113 112 0.9 445 427 4.2
Gains on sales of rural
telephone exchanges 8 24 (66.7) 59 136 (56.6)
Other expense - net 19 11 72.7 41 41 -
---------------- ----------------
Income before inc taxes,
extd item & cum effect
of chg in acctg princ 472 432 9.3 1,913 1,846 3.6
Income tax provision 161 148 8.8 698 662 5.4
---------------- ----------------
Income before extd
item & cum effect of
chg in acctg princ 311 284 9.5 1,215 1,184 2.6
Extraordinary item:
Early extinguishment
of debt, net of tax - (3) - - (8) -
---------------- ----------------
Income before cum effect
of chg in acctg princ 311 281 10.7 1,215 1,176 3.3
Cum effect of chg in
acctg princ, net of tax - - - 34 - -
---------------- ----------------
NET INCOME $311 $281 10.7 $1,249 $1,176 6.2
================ ================
</TABLE>
<TABLE>
<CAPTION>
COMBINED STATEMENTS OF INCOME U S WEST COMMUNICATIONS GROUP
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Quarter Ended Year Ended
In millions, except December 31, % December 31, %
per share amounts 1996 1995 Change 1996 1995 Change
- - -------------------------------- ------- ------------- ------- ------
Average common shares
outstanding (1)<F1> 479.9 472.6 1.5 477.5 470.7 1.4
================ ================
Earnings per common
share: (1)<F1>
Income before extraordi-
nary item & cumulative
effect of change in
accounting principle $0.65 $0.60 8.3 $2.55 $2.52 1.2
Extraordinary item - (0.01) - - (0.02) -
Cumulative effect of
change in accounting
principle - - - 0.07 - -
---------------- ----------------
Earnings per
common share $0.65 $0.59 10.2 $2.62 $2.50 4.8
================ ================
<FN>
<F1>
1: Effective November 1, 1995, each share of U S WEST, Inc.
common stock was converted into one share each of U S WEST Communi-
cations Group common stock and U S WEST Media Group common stock.
Earnings per common share for 1995 have been presented on a pro forma
basis to reflect the two classes of stock as if they were outstanding
since January 1, 1995. For periods prior to the recapitalization,
the average common shares outstanding are assumed to be equal to the
average common shares outstanding for U S WEST, Inc.
</FN>
</TABLE>
<PAGE>
EXHIBIT 99A.2
<TABLE>
<CAPTION>
EARNINGS NORMALIZATION SCHEDULE U S WEST COMMUNICATIONS GROUP
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Quarter Ended Year Ended
In millions, except December 31, % December 31, %
per share amounts 1996 1995 Change 1996 1995 Change
- - -------------------------------- ------- ------------- ------- ------
NORMALIZED INCOME:
Reported net income $311 $281 10.7 $1,249 $1,176 6.2
Adjustments to normalize
net income:
Rural exchange sales (5) (15)(66.7) (36) (85)(57.6)
Recapitalization costs - 3 - - 8 -
Extraordinary item - net
of tax - 3 - - 8 -
Cumulative effect of
change in accounting
principle-net of tax - - - (34) - -
Current year impact of
accounting change -
net of tax (2) - - (15) - -
---------------- ----------------
Normalized income $304 $272 11.8 $1,164 $1,107 5.1
================ ================
NORMALIZED EARNINGS PER
COMMON SHARE:
Reported net income $0.65 $0.59 10.2 $2.62 $2.50 4.8
Adjustments to normalize
net income:
Rural exchange sales (0.01) (0.03)(66.7) (0.08) (0.18)(55.6)
Recapitalization costs - - - - 0.01 -
Extraordinary item - net
of tax - 0.01 - - 0.02 -
Cumulative effect of
change in accounting
principle-net of tax - - - (0.07) - -
Current year impact of
accounting change -
net of tax (0.01) - - (0.03) - -
---------------- ----------------
Normalized earnings
per common share $0.63 $0.57 10.5 $2.44 $2.35 3.8
================ ================
</TABLE>
<PAGE>
EXHIBIT 99A.3
<TABLE>
<CAPTION>
SELECTED COMBINED GROUP DATA U S WEST COMMUNICATIONS GROUP
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
Quarter Ended Year Ended
In millions, except December 31, % December 31, %
per share amounts 1996 1995 Change 1996 1995 Change
- - ------------------------------- ------- ------------- ------- ------
Access lines
(thousands) (1):<F1>
Business 4,543 4,242 7.1 4,543 4,242 7.1
Consumer 10,881 10,553 3.1 10,881 10,553 3.1
Total access lines 15,424 14,795 4.3 15,424 14,795 4.3
Normalized access
lines 15,537 14,795 5.0 15,537 14,795 5.0
Billed access minutes
of use (millions):
Interstate 13,365 12,300 8.7 52,039 47,801 8.9
Intrastate 2,643 2,516 5.0 10,451 9,504 10.0
Total minutes of use 16,008 14,816 8.0 62,490 57,305 9.0
Employees:
Communications Grp 48,037 50,825 (5.5) 48,037 50,825 (5.5)
Telephone operations 45,427 47,934 (5.2) 45,427 47,934 (5.2)
Telephone employees per
10,000 access lines 29.5 32.4 (9.0) 29.5 32.4 (9.0)
Dividends per
common share (2)<F2> $0.535 $0.535 - $2.14 $2.14 -
Common shares
outstanding 480.5 473.6 1.5 480.5 473.6 1.5
Capital expenditures $798 $816 (2.2) $2,806 $2,739 2.4
EBITDA (3)<F3> $1,138 $1,059 7.5 $4,462 $4,220 5.7
EBITDA margin 43.8% 43.4% - 44.3% 44.5% -
Return on equity(4)<F4> 31.5% 34.2% - 32.0% 35.6% -
Debt-to-capital ratio:
Communications Grp 62.4% 66.0% - 62.4% 66.0% -
Telephone
operations only 60.5% 63.1% - 60.5% 63.1% -
<FN>
<F1>
<F2>
<F3>
<F4>
1: 1995 access lines have been restated to conform to current
year presentation.
2: Effective November 1, 1995, each share of U S WEST, Inc.
common stock was converted into one share each of U S WEST Communi-
cations Group common stock and U S WEST Media Group common stock.
The dividends per common share for 1995 are presented on a
pro forma basis.
3: Earnings before interest, taxes, depreciation, amortization,
and other (EBITDA). EBITDA also excludes gains on asset sales.
4: Based on income before one time items.
</FN>
</TABLE>
<PAGE>
EXHIBIT 99A.4
<TABLE>
<CAPTION>
COMBINED BALANCE SHEETS U S WEST COMMUNICATIONS GROUP
(UNAUDITED)
<S> <C> <C>
December 31,
In millions 1996 1995
- - -------------------------------------- ---------------------------
ASSETS
Current assets:
Cash and cash equivalents $80 $172
Accounts and notes receivable 1,622 1,617
Inventories and supplies 144 193
Deferred tax asset 97 259
Prepaid and other 65 51
---------------------------
Total current assets 2,008 2,292
---------------------------
Gross property, plant and equipment 32,645 31,178
Accumulated depreciation 18,639 17,649
---------------------------
Property, plant and equipment - net 14,006 13,529
Other assets 827 764
---------------------------
Total assets $16,841 $16,585
===========================
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt $834 $1,065
Accounts payable 989 851
Dividends payable 257 254
Other 1,387 1,437
---------------------------
Total current liabilities 3,467 3,607
---------------------------
Long-term debt 5,664 5,689
Postretirement and other postemployment
benefit obligations 2,387 2,351
Deferred taxes, credits and other 1,406 1,462
Communications Group equity 3,917 3,476
---------------------------
Total liabilities and equity $16,841 $16,585
===========================
</TABLE>
<PAGE>
EXHIBIT 99A.5
<TABLE>
<CAPTION>
COMBINED STATEMENTS OF U S WEST COMMUNICATIONS GROUP
CASH FLOWS (UNAUDITED)
<S> <C> <C>
Year Ended
December 31,
In millions 1996 1995
- - ---------------------------------------------------------------------
OPERATING ACTIVITIES
Net income $1,249 $1,176
Adjustments to net income:
Depreciation and amortization 2,122 2,042
Gains on sales of rural telephone exchanges (59) (136)
Cumulative effect of change in accounting
principle (34) -
Deferred income taxes and amortization
of investment tax credits 91 172
Changes in operating assets and liabilities:
Restructuring payments (226) (315)
Postretirement medical and life costs,
net of cash fundings 28 (90)
Accounts and notes receivable (5) (117)
Inventories, supplies and other 27 (51)
Accounts payable and accrued liabilities 98 7
Other - net 15 31
- - ---------------------------------------------------------------------
Cash provided by operating activities 3,306 2,719
- - ---------------------------------------------------------------------
INVESTING ACTIVITIES
Expenditures for property, plant and equipment (2,419) (2,462)
Proceeds from sales of rural telephone
exchanges 174 214
Proceeds from (payments on) disposals of
property, plant and equipment 15 (18)
Other - net - (2)
- - ---------------------------------------------------------------------
Cash (used for) investing activities (2,230) (2,268)
- - ---------------------------------------------------------------------
FINANCING ACTIVITIES
Net (repayments of) proceeds from issuance of
short-term debt 96 (832)
Proceeds from issuance of long-term debt 23 1,647
Repayments of long-term debt (482) (334)
Dividends paid on common stock (939) (926)
Proceeds from issuance of common stock 134 50
- - ---------------------------------------------------------------------
Cash (used for) financing activities (1,168) (395)
- - ---------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
Increase (decrease) (92) 56
Beginning balance 172 116
- - ---------------------------------------------------------------------
Ending balance $80 $172
=====================================================================
</TABLE>
<PAGE>
EXHIBIT 99A.5
<TABLE>
<CAPTION>
STATEMENTS OF INCOME U S WEST COMMUNICATIONS, Inc.
(UNAUDITED) (Telephone Operations Only)
<S> <C> <C> <C> <C> <C> <C>
Quarter Ended Year Ended
December 31, % December 31, %
In millions 1996 1995 Change 1996 1995 Change
- - -------------------------------- ------- ------------- ------- ------
OPERATING REVENUES
Local service $1,238 $1,113 11.2 $4,770 $4,344 9.8
Interstate access 653 604 8.1 2,507 2,378 5.4
Intrastate access 199 189 5.3 770 747 3.1
Long-distance network 260 298 (12.8) 1,100 1,189 (7.5)
Other services 177 171 3.5 684 626 9.3
---------------- ----------------
Total operating revenues 2,527 2,375 6.4 9,831 9,284 5.9
---------------- ----------------
OPERATING EXPENSES
Employee-related* 852 802 6.2 3,377 3,079 9.7
Other operating* 426 428 (0.5) 1,574 1,587 (0.8)
Taxes other than
income taxes 95 72 31.9 379 371 2.2
Depreciation & amort 536 523 2.5 2,101 2,022 3.9
---------------- ----------------
Total operating expenses 1,909 1,825 4.6 7,431 7,059 5.3
---------------- ----------------
Income from operations 618 550 12.4 2,400 2,225 7.9
Interest expense 106 102 3.9 414 386 7.3
Gains on sales of rural
telephone exchanges 8 24 (66.7) 59 136 (56.6)
Other expense - net 19 15 26.7 44 58 (24.1)
---------------- ----------------
Income before inc taxes,
extd item & cum effect
of chg in acctg princ 501 457 9.6 2,001 1,917 4.4
Income tax provision 194 155 25.2 768 698 10.0
---------------- ----------------
Income before extd
item & cum effect of
chg in acctg princ 307 302 1.7 1,233 1,219 1.1
Extraordinary item:
Early extinguishment
of debt, net of tax - (3) - - (8) -
---------------- ----------------
Income before cum effect
of chg in acctg princ 307 299 2.7 1,233 1,211 1.8
Cum effect of chg in
acctg princ, net of tax - - - 34 - -
---------------- ----------------
NET INCOME $307 $299 2.7 $1,267 $1,211 4.6
================ ================
*Employee-related expenses for the year ended December 31, 1996
include the impacts of employee transfers from affiliated
Communications Group companies to U S WEST Communications, Inc.
(USWC) during the first half of 1995. Prior to the transfers,
these affiliate employee costs were billed to USWC and reflected as
affiliate expense, which is included in other operating expenses.
</TABLE>
EXHIBIT 99B
U S WEST Media Group
7800 East Orchard Road
Englewood, Colorado 80111
303 793-6500
[U S WEST Media Group logo and registered mark]
News Release
Release Date: February 13, 1997
Contact: Blair Johnson Steve Lang
(303) 793-6296 (303) 793-6290
U S WEST MEDIA GROUP REPORTS 22 PERCENT INCREASE
IN OPERATING CASH FLOW IN 1996
ENGLEWOOD, Colo. - U S WEST Media Group (NYSE: UMG) today reported operating
cash flow growth of more than 20 percent for the fifth consecutive quarter,
results fueled by industry-leading growth in its cable TV, wireless and
directory operations.
For the fourth quarter, Media Group reported $415 million of proportionate
operating cash flow, a 29.5 percent normalized increase over the fourth
quarter of 1995.
Other highlights of 1996, Media Group's first full year, included:
- - - Merging with Continental Cablevision, which made Media Group the third
largest cable operator in the United States.
- - - Offering high-speed Internet access through cable modems and cable TV
lines in certain Boston suburbs, Jacksonville, Fla., and -- beginning this
week -- the Detroit area.
- - - Repurchasing $350 million worth, or 19 million shares, of Media Group
stock in a buyback started in 1996.
- - - Launching, with its PrimeCo Personal Communications partners, a new
generation of wireless telephone service, called PCS, in 16 U.S. cities.
In addition, strong market demand last month enabled U S WEST to sell $4.1
billion in bonds -- twice its initial offering -- in the largest
investment-grade debt transaction ever.
For the year ending December 31, 1996, Media Group reported -- on a
proportionate basis:
- A 22 PERCENT INCREASE IN OPERATING CASH FLOW, to $1.4 billion, not
including results from Continental Cablevision since the Nov. 15 merger.
Media Group's operating cash flow for 1995 was $1.15 billion. Including
Continental's results since Nov. 15, Media Group's 1996 operating cash flow
was $1.47 billion.
Operating cash flow, which represents earnings before interest, taxes,
depreciation and amortization (EBITDA), is an important indicator of the
company's operating performance.
- A 19 PERCENT INCREASE IN REVENUE, to $6.1 billion, not including
results from Continental. Media Group's revenue for 1995 was $5.1 billion.
Including Continental's results since Nov. 15, Media Group's 1996 revenue was
$6.4 billion.
- - - A 17 PERCENT INCREASE IN CUSTOMERS WORLDWIDE, not including those added in
the Continental merger. Including Continental's 4.9 million customers, Media
Group now serves 11.9 million customers on a proportionate basis.
Because Media Group participates in numerous joint ventures, the company uses
proportionate accounting to reflect its relative share of operating revenues
and expenses associated with these operations.
For 1996, Media Group reported a net loss of $71 million. Excluding
Continental, Media Group would have broken even.
"Media Group got off to a strong start in our first full year," said Richard
McCormick, U S WEST chairman and chief executive officer. "We produced
impressive cash flow growth. We set the stage for further growth by merging
with Continental and introducing PCS. And last month we got a strong vote of
confidence when investors bought $4.1 billion in U S WEST bonds."
Chuck Lillis, Media Group president and chief executive officer, said he was
particularly pleased that Media Group met -- and exceeded -- its aggressive
objectives for 1996.
"These results reflect our emphasis on superior operating performance," Lillis
said. "Our cable subscriber growth in Atlanta was twice the industry average.
Domestic cellular cash flow reached an all-time high. And directory revenue
growth led that industry for the sixth straight year."
In 1997, Lillis said Media Group will focus on two goals.
"We're committed to again delivering industry-leading growth and continuing to
upgrade our networks to offer new services," Lillis said.
Proportionate operating highlights for 1996 -- by line of business -- include:
- - - CABLE AND TELEPHONY: Subscriber growth of 4.5 percent for MediaOne, the
company's Atlanta cable operation, exceeded the industry average for the
eighth consecutive quarter. MediaOne ended 1996 with 512,000 customers. This
strong subscriber growth produced revenue of $236 million, a 9.8 percent
increase compared to 1995. Operating cash flow in 1996 was $109 million, a 9
percent increase.
For the six weeks since it merged with Media Group, Continental reported
domestic revenue of $263 million and operating cash flow of $87 million.
Continental ended the year with 4.5 million domestic subscribers.
Meanwhile, Media Group's investment in Time Warner Entertainment
generated operating cash flow of $590 million in 1996, a 15.7 percent increase
from 1995.
Media Group's international cable properties also produced strong
subscriber growth. At year-end, its share of subscribers in these joint
ventures was 1.2 million, a 15 percent (normalized) increase compared to 1995.
In the United Kingdom, the company's Telewest joint venture increased its
cable subscriber base by 32 percent over 1995. Media Group ended 1996 with
161,000 U.K. cable subscribers. In addition, Telewest provided 47 percent
more telephone lines in 1996, giving Media Group 207,000 lines. Nearly
three-fourths of Telewest's cable subscribers also take telephone service.
- WIRELESS: Media Group's domestic cellular operations continued to lead
the industry in two growth measurements. Its subscriber base increased 40
percent, to 1.9 million proportionate customers, and its operating cash flow
increased 50 percent, to $350 million. In addition, its operating cash flow
margins increased by more than 4 percentage points.
International wireless operations also grew rapidly. Media Group ended
1996 with 509,000 proportionate customers, up 65 percent from 1995. In the
U.K., the company's One 2 One joint venture increased its subscriber base by
45 percent in 1996. Media Group ended the year with 273,000 proportionate
customers. In Central Europe, Media Group's joint ventures in Hungary, the
Czech Republic, Slovakia and Poland added more than 87,000 proportionate
subscribers in 1996, largely due to the introduction of new digital wireless
phones.
- - - DIRECTORIES: Media Group's directory publishing business, now called U S
WEST Dex, was an industry leader in published revenue growth for the sixth
consecutive year. Boosted by a 5.7 percent increase in revenue per
advertiser, Media Group's domestic directories reported 1996 revenue of $1.1
billion, a 7.4 percent increase from 1995.
U S WEST Media Group, one of America's largest broadband communications
companies, is involved in domestic and international cable and telephony,
wireless communications, and directory and information services. For 1996, U S
WEST Media Group reported proportionate revenues of $6.4 billion.
Media Group is one of two major groups that make up U S WEST, a company in the
connections business helping customers share information, entertainment and
communications services in local markets worldwide. U S WEST's other major
group, U S WEST Communications, provides telecommunications services in 14
western and midwestern states.
# # #
Some of the information presented in or in connection with this announcement
constitutes "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Although the Company believes that
its expectations are based on reasonable assumptions within the bounds of its
knowledge of its business and operations, there can be no assurance that
actual results will not differ materially from its expectations. Factors that
could cause actual results to differ from expectations include: (i) a change
in economic conditions in the various markets served by the Company's
operations that could adversely affect the level of demand for cable,
wireless, directory or other services offered by the Company, (ii) greater
than anticipated competitive activity requiring new pricing for Company
services, (iii) higher than anticipated start-up costs associated with new
business opportunities, (iv) regulatory changes affecting the
telecommunications industry, (v) increases in fraudulent activity with respect
to wireless services, or (vi) delays in the development of anticipated
technologies, or the failure of such technologies to perform according to
expectations.
Note: This release and the accompanying financial information will be
available on the Internet after 8:00 a.m. MST, by accessing U S WEST's
Internet site: www.uswest.com
<PAGE>
U S WEST MEDIA GROUP
U S WEST MEDIA GROUP SELECTED OPERATING HIGHLIGHTS BY LINE OF BUSINESS
(ALL CHANGES ARE IN COMPARISON TO YEAR-END 1995)
U S WEST MEDIA GROUP COMBINED PROPORTIONATE RESULTS
Revenue of $6.4 billion
Operating cash flow of $1.47 billion
CABLE AND TELEPHONY
CONTINENTAL CABLEVISION (11/15/96-12/31/96)
- - - A 3.8% cable subscriber increase on a comparable basis
- - - Revenue of $263 million
- - - Operating cash flow of $87 million
INTERNATIONAL
- - - 1.2 million subscribers, a 15% increase on a comparable basis
- - - Revenue of $251 million, an 80% increase on a comparable basis
- - - Operating cash flow loss of $50 million
MEDIAONE
- - - 512,000 customers, a 4.5% increase
- - - Revenue of $236 million, a 9.8% increase
- - - Operating cash flow of $109 million, a 9% increase
TIME WARNER ENTERTAINMENT (TWE)
- - - A 3.6% cable subscriber increase on a comparable basis
- - - Revenue of $2.8 billion, a 14% increase
- - - Operating cash flow of $590 million, a 15.7% increase
WIRELESS
DOMESTIC WIRELESS
- - - 1.9 million customers, a 40% increase
- - - Revenue of $1.1 billion, a 31% increase
- - - Operating cash flow of $350 million, a 50% increase
- - - Operating cash flow, as a percent of net operating revenue, of 37.5%
INTERNATIONAL
- - - 509,000 subscribers, a 65% increase
- - - Revenue of $436 million, a 48% increase
- - - Operating cash flow loss of $2 million, compared with a loss of $40 million
in 1995
DIRECTORY AND INFORMATION SERVICES
U S WEST DEX (DIRECTORIES)
- - - Revenue of $1.1 billion, a 7.4% increase
- - - Operating cash flow of $531 million, a 2.3% increase
INTERNATIONAL
- - - Revenue of $206 million, a 45% increase
- - - Operating cash flow of $20 million, compared to $3 million in 1995
U S WEST MEDIA GROUP COMBINED GAAP RESULTS
- - - Revenue of $2.96 billion
- - - Operating cash flow of $937 million
- - - Net loss of $71 million
- - - Loss per common share of 16 cents
<PAGE>
EXHIBIT 99B.1
<TABLE>
<CAPTION>
COMBINED STATEMENTS OF OPERATIONS U S WEST MEDIA GROUP
(UNAUDITED)
Quarter Ended Year Ended
December 31, % December 31, %
In millions 1996 1995 Change 1996 1995 Change
- - ------------------------------ ------- -------------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
SALES AND OTHER REVENUES
Directory $351 $324 8.3 $1,259 $1,180 6.7
Wireless 314 265 18.5 1,183 941 25.7
Cable 312 50 - 488 215 -
Other 13 10 30.0 25 38 (34.2)
---------------- ----------------
Total revenues 990 649 52.5 2,955 2,374 24.5
---------------- ----------------
EXPENSES
Costs of sales and
other revenues 340 233 45.9 966 772 25.1
Selling, general and
administrative 354 252 40.5 1,052 886 18.7
Depreciation & amort 206 68 - 422 249 69.5
---------------- ----------------
Total oper. expenses 900 553 62.7 2,440 1,907 27.9
---------------- ----------------
Income from
operations 90 96 (6.3) 515 467 10.3
Interest expense 88 11 - 168 100 68.0
Equity losses in
unconsol ventures 122 79 54.4 346 207 67.1
Gain on merger of
joint ven interest - 157 - - 157 -
Guaranteed minority
interest expense 19 12 58.3 55 14 -
Other income
(expense) - net 5 (19) - (19) 5 -
---------------- ----------------
Income (loss) before
income taxes &
extraordinary item (134) 132 - (73) 308 -
Income tax (benefit)
expense (53) 60 - (2) 163 -
---------------- ----------------
Income (loss) before
extraordinary item (81) 72 - (71) 145 -
Extraordinary item:
Early extinguishment
of debt, net of tax - - - - (4) -
---------------- ----------------
NET INCOME (LOSS) (81) 72 - (71) 141 -
Preferred dividends 6 - - 9 3 -
---------------- ----------------
EARNINGS (LOSS) AVAILABLE
FOR COMMON STOCK ($87) $72 - ($80) $138 -
================ ================
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
COMBINED STATEMENTS OF OPERATIONS U S WEST MEDIA GROUP
(UNAUDITED)
Quarter Ended Year Ended
In millions, except December 31, % December 31, %
per share amounts 1996 1995 Change 1996 1995 Change
- - ------------------------------ ------- -------------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Average common shares
outstanding (#1)(#2) 546.8 472.0 15.8 491.9 470.5 4.5
================ ================
Earnings (loss) per
common share: (#1)
Income (loss)
available for
common stock before
extraordinary item ($0.16) $0.15 - ($0.16) $0.30 -
Extraordinary item - - - - (0.01) -
------- ------- ------- -------
Earnings (loss) per
common share ($0.16) $0.15 - ($0.16) $0.29 -
================ ================
<FN>
<F1>
#1: Effective November 1, 1995, each share of U S WEST, Inc.
common stock was converted into one share each of U S WEST
Communications Group common stock and U S WEST Media Group
common stock. Earnings per common share for 1995 have been
presented on a pro forma basis to reflect the two classes of
stock as if they were outstanding since January 1, 1995. For
periods prior to the recapitalization, the average common shares
outstanding are assumed to be equal to the average common shares
outstanding for U S WEST, Inc.
<F2>
#2 The average common shares outstanding for the quarter and
year ended December 31, 1996, includes 150.6 million shares
related to the November 15, 1996, Continental Cablevision, Inc.
merger.
</FN>
</TABLE>
7
<PAGE>
EXHIBIT 99B.2
<TABLE>
<CAPTION>
SELECTED COMBINED GROUP DATA U S WEST MEDIA GROUP
(UNAUDITED)
Quarter Ended Year Ended
Dollars in December 31, % December 31, %
millions 1996 1995 Change 1996 1995 Change
- - --------------------------------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
REVENUES
U S WEST Dex
directories $290 $266 9.0 $1,102 $1,026 7.4
Other
directories 61 58 5.2 157 154 1.9
Continental (#1) 252 - - 252 - -
MediaOne 60 50 20.0 236 215 9.8
NewVector:
Service 286 230 24.3 1,078 845 27.6
Equipment 28 35 (20.0) 105 96 9.4
-------------- ------------------
Total NewVector 314 265 18.5 1,183 941 25.7
Other 13 10 30.0 25 38 (34.2)
-------------- ------------------
Total revenues $990 $649 52.5 $2,955 $2,374 24.5
EBITDA (#2)
U S WEST Dex
directories $149 $135 10.4 $531 $519 2.3
Other
directories 3 (19) - (29) (85) 65.9
Continental (#1) 87 - - 87 - -
MediaOne 26 26 - 109 100 9.0
NewVector 83 51 62.7 390 268 45.5
Other (52) (29) (79.3) (151) (86) (75.6)
-------------- ------------------
Total EBITDA $296 $164 80.5 $937 $716 30.9
<FN>
<F1>
#1: Continental Cablevision, Inc. merged with U S WEST on
November 15, 1996.
<F2>
# 2: Earnings before interest, taxes, depreciation,
amortization and other (EBITDA). EBITDA also excludes
equity losses and guaranteed minority interest expense.
<F3>
Note: Certain reclassifications have been made to
conform to the current year presentation.
</FN>
</TABLE>
8
<PAGE>
EXHIBIT 99B.2 (cont'd.)
<TABLE>
<CAPTION>
SELECTED COMBINED GROUP DATA U S WEST MEDIA GROUP
(UNAUDITED)
Dollars in
millions; Quarter Ended Year Ended
statistics in December 31, % December 31, %
thousands 1996 1995 Change 1996 1995 Change
- - ----------------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Other Data:
U S WEST Dex directories (Yellow Pages)
Net income $85 $82 3.7 $309 $307 0.7
Advertisers 482 479 0.6 482 479 0.6
Continental (#1)
Basic sub-
scribers(#2) 4,492 4,270 5.2 4,492 4,270 5.2
Homes passed 7,404 7,191 3.0 7,404 7,191 3.0
MediaOne (Atlanta Cable)
Basic sub-
scribers 512 490 4.5 512 490 4.5
Homes passed 890 848 5.0 890 848 5.0
U S WEST NewVector (Cellular)
Subscribers
(consol.) 2,043 1,463 39.6 2,043 1,463 39.6
Proportionate
POPs managed
(millions) 20.3 20.0 1.5 20.3 20.0 1.5
<FN>
<F1>
#1: Continental Cablevision, Inc. merged with U S WEST on
November 15, 1996. The 1995 statistics are presented for
comparative purposes only.
<F2>
#2: Includes Primestar subscribers
</FN>
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
COMBINED BALANCE SHEETS U S WEST MEDIA GROUP
(UNAUDITED) December 31,
In millions 1996 1995
- - --------------------------------------- --------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $121 $20
Accounts and notes receivable 508 287
Deferred directory costs 259 247
Marketable securities 58 -
Other assets 193 187
--------------------------
Total current assets 1,139 741
--------------------------
Property, plant and equipment - net 4,275 1,148
Investment in Time Warner Entertainment 2,477 2,483
Intangible assets - net 12,078 1,798
Investment in international ventures 1,882 1,511
Net investment in assets held for sale 409 429
Other assets 1,618 505
--------------------------
Total assets $23,878 $8,615
==========================
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt $217 $836
Due to Continental shareholders 1,150 -
Accounts payable 425 235
Deferred revenue and customer deposits 129 87
Other payables 795 411
--------------------------
Total current liabilities 2,716 1,569
--------------------------
Long-term debt 8,636 1,265
Deferred taxes 3,455 382
Deferred credits and other 346 276
Preferred securities of subsidiary
trust holding Company-guaranteed
debentures 1,080 600
Preferred stock subject to
mandatory redemption 51 51
Media Group equity 7,685 4,599
Company LESOP guarantee (91) (127)
--------------------------
Total equity 7,594 4,472
--------------------------
Total liabilities and equity $23,878 $8,615
==========================
</TABLE>
10
<PAGE>
EXHIBIT 99B.4
<TABLE>
<CAPTION>
SELECTED PROPORTIONATE DATA (UNAUDITED) (1) U S WEST MEDIA GROUP
Cable and
Telecommunications Wireless
Dollars in millions Domestic (2) Int'l Domestic Int'l
- - ------------------- --------- ----- -------- -----
<S> <C> <C> <C> <C>
QTR Ended
December 31, 1996
Revenues $1,099 $94 $288 $138
EBITDA 260 (14) 54 (3)
Net income (loss) (75) (58) (1) (28)
Subscribers/advertisers
(thousands) 7,562 1,224 1,882 509
QTR Ended
December 31, 1995
Revenues $753 $46 $238 $95
EBITDA 151 (21) 36 (15)
Net income (loss) (16) 54 - (4)
Subscribers/advertisers
(thousands) 2,908 617 1,339 308
Year Ended
December 31, 1996
Revenues $3,267 $251 $1,075 $436
EBITDA 776 (50) 307 (2)
Net income (loss) (101) (215) 87 (98)
Year Ended
December 31, 1995
Revenues $2,643 $128 $818 $295
EBITDA 582 (55) 224 (40)
Net income (loss) (55) 18 56 (80)
<FN>
<F1>
(1) Proportionate data reflects the Media Group's relative
ownership interest in revenues and EBITDA for both its
consolidated and equity method entities. Proportionate data is
not required by GAAP or intended to replace the Combined Financial
Statements prepared in accordance with GAAP.
<F2>
(2) Includes the Media Group's 25.51 percent pro-rata priority
and residual equity interests in reported TWE results.
</FN>
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
SELECTED PROPORTIONATE DATA (UNAUDITED) (1) U S WEST MEDIA GROUP
Directory & Corp
Information Services &
Dollars in millions Domestic Int'l Other Total
- - ------------------- --------- ----- -------- -----
<S> <C> <C> <C> <C>
QTR Ended
December 31, 1996
Revenues $294 $75 $3 $1,991
EBITDA 139 15 (36) 415
Net income (loss) 75 10 (4) (81)
Subscribers/advertisers
(thousands) 482 260 - 11,919
QTR Ended
December 31, 1995
Revenues $274 $70 $4 $1,480
EBITDA 106 10 (3) 264
Net income (loss) 61 (2) (21) 72
Subscribers/advertisers
(thousands) 479 271 - 5,922
Year Ended
December 31, 1996
Revenues $1,120 $206 $12 $6,367
EBITDA 488 20 (66) 1,473
Net income (loss) 268 1 (13) (71)
Year Ended
December 31, 1995
Revenues $1,058 $142 $31 $5,115
EBITDA 424 3 11 1,149
Net income (loss) 247 (13) (32) 141
<FN>
<F1>
(1) Proportionate data reflects the Media Group's relative
ownership interest in revenues and EBITDA for both its
consolidated and equity method entities. Proportionate data is
not required by GAAP or intended to replace the Combined Financial
Statements prepared in accordance with GAAP.
</FN>
</TABLE>
12
<PAGE>
EXHIBIT 99C.1
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF U S WEST, Inc.
INCOME (UNAUDITED)
Quarter Ended Year Ended
December 31, % December 31, %
In millions 1996 1995 Change 1996 1995 Change
- - ------------------------------ ------- ------ ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
SALES & OTHER REVENUES $3,558 $3,060 16.3 $12,911 $11,746 9.9
OPERATING EXPENSES
Employee-related 1,166 1,089 7.1 4,412 4,071 8.4
Other operating 848 662 28.1 2,671 2,323 15.0
Taxes other than
income taxes 110 86 27.9 429 416 3.1
Depreciation & amort 748 596 25.5 2,544 2,291 11.0
---------------- -------- --------
Total operating expense 2,872 2,433 18.0 10,056 9,101 10.5
---------------- -------- --------
Income from operations 686 627 9.4 2,855 2,645 7.9
Interest expense 201 123 63.4 612 527 16.1
Equity losses in
unconsol ventures 122 79 54.4 346 207 67.1
Gain on merger of
joint ven interest - 157 - - 157 -
Gains on sales of rural
telephone exchanges 8 24 (66.7) 59 136 (56.6)
Guaranteed minority
interest expense 19 12 58.3 55 14 -
Other expense - net 14 30 (53.3) 61 36 69.4
---------------- -------- --------
Income before inc taxes,
extd item & cum effect
of chg in acctg princ 338 564 (40.1) 1,840 2,154 (14.6)
Income tax provision 108 208 (48.1) 696 825 (15.6)
---------------- -------- --------
Income before extd
item, cum effect of
chg in acctg princ 230 356 (35.4) 1,144 1,329 (13.9)
Extraordinary item:
Early extinguishment
of debt - net of tax - (3) - - (12) -
---------------- -------- --------
Income before cum effect
of chg in acctg princ 230 353 (34.8) 1,144 1,317 (13.1)
Cumulative effect of
change in accounting
principle - net of tax - - - 34 - -
---------------- -------- --------
NET INCOME 230 353 (34.8) 1,178 1,317 (10.6)
Preferred dividends 6 - - 9 3 -
---------------- -------- --------
EARNINGS AVAILABLE FOR
COMMON STOCK $224 $353 (36.5) $1,169 $1,314 (11.0)
================ ======== ========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF U S WEST, Inc.
INCOME (UNAUDITED)
Quarter Ended Year Ended
In millions, except December 31, % December 31, %
per share amounts 1996 1995 Change 1996 1995 Change
- - ------------------------------ ------- ------ ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
COMMUNICATIONS GROUP:
Average common shares
outstanding (#1) 479.9 472.6 1.5 477.5 470.7 1.4
================ ======== ========
Earnings per common
share: (#1)
Income before extraordi-
nary item & cumulative
effect of change in
accounting principle $0.65 $0.60 8.3 $2.55 $2.52 1.2
Extraordinary item - (0.01) - - (0.02) -
Cumulative effect of
change in accounting
principle - - - 0.07 - -
---------------- -------- --------
Earnings per
common share $0.65 $0.59 10.2 $2.62 $2.50 4.8
================ ======== ========
MEDIA GROUP:
Average common shares
outstanding (#1)(#2) 546.8 472.0 15.8 491.9 470.5 4.5
================ ======== ========
Earnings (loss) per
common share: (#1)
Income (loss)
available for
common stock before
extraordinary item ($0.16) $0.15 - ($0.16) $0.30 -
Extraordinary item - - - - (0.01) -
---------------- -------- --------
Earnings (loss) per
common share ($0.16) $0.15 - ($0.16) $0.29 -
================ ======== ========
<FN>
<F1>
#1 Effective November 1, 1995, each share of U S WEST, Inc.
common stock was converted into one share each of U S WEST Communi-
cations Group common stock and U S WEST Media Group common stock.
Earnings per common share for 1995 have been presented on a pro
forma basis to reflect the two classes of stock as if they were
outstanding since January 1, 1995. For periods prior to the
recapitalization, the average common shares outstanding
are assumed to be equal to the average common shares outstanding
for U S WEST, Inc.
<F2>
#2 The average common shares outstanding for the quarter and
year ended December 31, 1996, includes 150.6 million shares
related to the November 15, 1996, Continental Cablevision, Inc.
merger.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF U S WEST, Inc.
INCOME (UNAUDITED)
Quarter Ended Year Ended
December 31, % December 31, %
Dollars in millions 1996 1995 Change 1996 1995 Change
- - ------------------------------ ------- ------ ------- ------- ------
SELECTED CONSOLIDATED DATA
<S> <C> <C> <C> <C> <C> <C>
Capital
expenditures $1,137 $957 18.8 $3,474 $3,140 10.6
Debt-to-capital
ratio (#1) 54.8% 50.7% - 54.8% 50.7% -
Employees 69,286 61,047 13.5 69,286 61,047 13.5
EBITDA $1,434 $1,223 17.3 $5,399 $4,936 9.4
EBITDA margin 40.3% 40.0% - 41.8% 42.0% -
<FN>
<F1>
#1 Ratio includes preferred securities and other preferred stock
as a component of total capital. Including debt related to the net
investment in assets held for sale, preferred securities and other
preferred stock, the Company's percentage of debt to total capital
was 59.6% and 56.4% at December 31, 1996 and 1995, respectively.
</FN>
</TABLE>
<PAGE>
EXHIBIT C.2
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS U S WEST, Inc.
(UNAUDITED)
December 31,
In millions 1996 1995
- - --------------------------------------- -------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $201 $192
Accounts and notes receivable 2,113 1,886
Inventories and supplies 159 227
Deferred tax asset 140 282
Marketable securities 58 -
Prepaid and other 367 322
-------------------------
Total current assets 3,038 2,909
-------------------------
Property, plant and equipment - net 18,281 14,677
Investment in Time Warner Entertainment 2,477 2,483
Intangible assets - net 12,078 1,798
Investment in international ventures 1,882 1,511
Net investment in assets held for sale 409 429
Other assets 2,433 1,264
-------------------------
Total assets $40,598 $25,071
=========================
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities:
Short-term debt $1,051 $1,901
Accounts payable 1,316 975
Due to Continental shareholders 1,150 -
Dividends payable 263 254
Other payables 2,294 1,922
-------------------------
Total current liabilities 6,074 5,052
-------------------------
Long-term debt 14,300 6,954
Deferred taxes 4,304 1,270
Postretirement and other postemployment
benefit obligations 2,479 2,433
Deferred credits and other 799 763
Preferred securities of subsidiary
trust holding Company-guaranteed
debentures 1,080 600
Preferred stock subject to
mandatory redemption 51 51
Shareowners' equity:
Preferred shares 920 -
Common shares 10,741 8,228
Retained deficit (30) (115)
LESOP guarantee (91) (127)
Foreign currency translation adjustments (29) (38)
-------------------------
Total shareowners' equity 11,511 7,948
-------------------------
Total liabilities & shareowners' equity $40,598 $25,071
=========================
</TABLE>
<PAGE>
EXHIBIT 99C.3
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF U S WEST, Inc.
CASH FLOWS (UNAUDITED) Year Ended
December 31,
In millions 1996 1995
- - ---------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $1,178 $1,317
Adjustments to net income:
Depreciation and amortization 2,544 2,291
Equity losses in unconsolidated ventures 346 207
Gain on merger of joint venture interest - (157)
Gains on sales of rural telephone exchanges (59) (136)
Cumulative effect of change in accounting
principle (34) -
Deferred income taxes and amortization
of investment tax credits 5 274
Changes in operating assets and liabilities:
Restructuring payments (242) (334)
Postretirement medical and life costs,
net of cash fundings 39 (24)
Accounts and notes receivable (56) (169)
Inventories, supplies and other 31 (79)
Accounts payable and accrued liabilities 225 45
Other - net 21 185
- - ---------------------------------------------------------------------
Cash provided by operating activities 3,998 3,420
- - ---------------------------------------------------------------------
INVESTING ACTIVITIES
Expenditures for property, plant and equipment (3,071) (2,825)
Investment in international ventures (243) (681)
Proceeds from disposals of property,
plant and equipment 189 201
Cash from net investment in assets
held for sale 213 -
Other - net (136) (201)
- - ---------------------------------------------------------------------
Cash (used for) investing activities (3,048) (3,506)
- - ---------------------------------------------------------------------
FINANCING ACTIVITIES
Net proceeds from (repayments of) issuance of
short-term debt 3,987 (1,281)
Proceeds from issuance of long-term debt 383 2,732
Repayments of long-term debt (4,699) (1,058)
Proceeds from issuance of trust
originated preferred securities - net 465 581
Dividends paid on common and preferred stock (948) (929)
Proceeds from issuance of common stock 168 87
Purchases of treasury stock (297) (63)
- - ---------------------------------------------------------------------
Cash (used for) provided by financing activities (941) 69
- - ---------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
Increase (decrease) 9 (17)
Beginning balance 192 209
- - ---------------------------------------------------------------------
Ending balance $201 $192
=====================================================================
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000732718
<NAME> U S WEST, INC.
<MULTIPLIER> 1,000,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996
<PERIOD-END> DEC-31-1996 DEC-31-1996
<CASH> 201 201
<SECURITIES> 58 58
<RECEIVABLES> 2,113 2,113
<ALLOWANCES> 0 0
<INVENTORY> 159 159
<CURRENT-ASSETS> 3,038 3,038
<PP&E> 37,756 37,756
<DEPRECIATION> 19,475 19,475
<TOTAL-ASSETS> 40,598 40,598
<CURRENT-LIABILITIES> 6,074 6,074
<BONDS> 14,300 14,300
1,131 1,131
920 920
<COMMON> 10,741 10,741
<OTHER-SE> (150) (150)
<TOTAL-LIABILITY-AND-EQUITY> 40,598 40,598
<SALES> 3,558 12,911
<TOTAL-REVENUES> 3,558 12,911
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 2,872 10,056
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 201 612
<INCOME-PRETAX> 338 1,840
<INCOME-TAX> 108 696
<INCOME-CONTINUING> 230 1,444
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 34
<NET-INCOME> 230 1,178
<EPS-PRIMARY> .65 2.62
<EPS-DILUTED> .65 2.62
</TABLE>
