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 6, 1998
U S WEST, Inc.
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
<S> <C> <C>
A Delaware Corporation Commission File Number IRS Employer Identification No.
(State of incorporation) 1-8611 84-0926774
</TABLE>
7800 East Orchard Road
Englewood, Colorado 80111
(Address of principal executive offices)
(303) 793-6500
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events
On February 6, 1998 U S WEST Communications Group released its four quarter 1997
earnings results. In addition, U S WEST Media Group released its fourth quarter
1997 earnings results on February 12, 1998. The releases and financial
statements are attached hereto as Exhibits.
Item 7. Exhibits
<TABLE>
<CAPTION>
<S> <C>
Exhibit Description
27 Financial Data Schedule
99 Press Release issued February 6, 1998 concerning
the earnings results of U S WEST Communications Group
for the fourth quarter of 1997.
99A Unaudited Combined Statements of Operations of U S WEST
Communications Group for the quarters ended December 31,
1996 and 1997, and the years ended December 31, 1996 and
1997.
99A.1 Unaudited Earnings Normalization Schedule of U S WEST
Communications Group for the quarters ended December 31,
1996 and 1997, and the years ended December 31, 1996 and
1997.
99A.2 Unaudited Selected Combined Group Data of U S WEST
Communications Group for the quarters ended December 31,
1996 and 1997, and the years ended December 31, 1996 and
1997.
99A.3 Unaudited Combined Balance Sheets of U S WEST
Communications Group as of December 31, 1996 and 1997.
99A.4 Unaudited Combined Statements of Cash Flows of U S WEST
Communications Group for the years ended December 31, 1996
and 1997.
99B Press Release issued February 12, 1998 concerning the
earnings results of U S WEST Media Group for the fourth
quarter of 1997.
99B.1 Unaudited Pro Forma Combined Statements of Operations of
U S WEST Media Group for the quarters ended December 31,
1996 and 1997, and the years ended December 31, 1996 and
1997.
99B.2 Unaudited Selected Financial Data of U S WEST Media Group
for the quarters ended December 31, 1996 and 1997, and the
years ended December 31, 1996 and 1997.
99B.3 Unaudited Selected Financial and Operating Highlights of
Domestic Cable and Broadband for the quarters ended
December 31, 1996 and 1997, and the years ended December
31, 1996 and 1997.
99B.4 Unaudited Combined Balance Sheets of U S WEST Media Grou
as of December 31, 1996 and 1997.
99B.5 Unaudited Selected Proportionate Financial Data of
U S WEST Media Group for the years ended December 31,
1996 and 1997.
99B.6 Unaudited Other Proportionate Information of U S WEST
Medial Group for the quarters ended December 31, 1996 and
1997.
99B.7 Unaudited Investing Activity of U S WEST Media Group for
the quarters ended March 31, June 30, September 30, and
December 31, 1997, and year to date.
99B.8 Unaudited Investing Activity: Valuation of Investments
Publicly Traded of U S WEST Media Group as of December
31, 1997.
99B.9 Unaudited Consolidated Statements of Operations of
U S WEST, Inc. for the quarters ended December 31, 1996
and 1997, and the years ended December 31, 1996 and 1997.
99B.10 Unaudited Consolidated Balance Sheets of U S WEST, Inc.
for quarters ended December 31, 1996 and 1997, and year
ended December 31, 1996 and 1997.
</TABLE>
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, 1998
EXHIBIT 99
Date: February 6, 1998
Contact: Dave Banks (303) 896-3040
U S WEST COMMUNICATIONS ANNOUNCES SOLID FULL-YEAR
FINANCIAL RESULTS;
HIGHLIGHTS NEW DATA, WIRELESS AND WIRELINE ROLL OUTS
- 1997 EPS Up 6.1 Percent Before Regulatory Charges -
ENGLEWOODU S WEST Communications Group (NYSE: USW) today announced
fourth quarter adjusted earnings of $.60 per share before a regulatory charge.
Full-year 1997 earnings per share (EPS) were $2.59, up 6.1 percent compared to
1996, similarly adjusted.
On a reported basis including a regulatory charge of $250 million, the company's
normalized EPS for the quarter was 28 cents - versus 63 cents for the same
period in 1996 - and for the full year was $2.28 versus $2.44 in 1996.
Prior to the regulatory charge:
Operating revenues were up 5.7 percent for the quarter and 4.7 percent for
the year. Local service revenues grew 10.1 percent for the quarter and 7
percent for the year.
Normalized net income was $290 million for the quarter, down 4.6 percent,
and was $1.25 billion for the year, up 7.6 percent.
"1997 was a terrific year for U S WEST Communications," said Richard McCormick,
chairman and CEO of U S WEST, Inc. "The company delivered on its promises,
created excellent shareholder value, and offered customers unique solutions. The
people of U S WEST Communications should be commended for their hard work."
"We are right where we expected to be financially," said Sol Trujillo, president
and chief executive officer of U S WEST Communications Group. "Operationally, we
had an outstanding quarter. We entered six new markets with our integrated
Access2 Advanced PCS wireless product, completed the first-ever broad commercial
deployment of high-speed DSL Internet and data networking services, and
increased product penetration of our core telecommunications products
significantly. Truly, our customers are starting to see what we mean when we say
`we are the new telco.'"
-more-
U S WEST Communications Fourth Quarter Earnings - Page 2
Quarterly results were impacted by accelerated spending resulting from the
aggressive rollout of the company's first-in-the-nation "one-number" PCS
wireless services in six markets; introduction of the first commercial
high-speed DSL product; and significant spending for mandated interconnection
and number portability to help foster local competition.
Trujillo said that despite incurring negative regulatory hits this quarter, the
company had significant wins on the federal and state level in the regulatory
arena over the last few months which are already providing momentum for future
financial performance.
The bulk of the $250 million regulatory charge resulted from a refund to
Washington customers retroactive to May 1, 1996. This refund stemmed from a 1996
Washington Utilities and Transportation Commission (WUTC) ruling which reduced
the company's annual revenues by more than $90 million. In a subsequent WUTC
decision last month, the company was granted an annual rate increase of
approximately $60 million effective February 1, 1998. Another portion of the
$250 million charge was taken to accrue for a pending regulatory ruling at the
federal level.
Results for the quarter were also normalized for a $32 million one-time,
after-tax gain associated with the sale of Bellcore. Results for the fourth
quarter 1996 were normalized to reflect the effects of a change in accounting
principle and a one-time, after-tax gain associated with the sale of selected
rural exchanges in Idaho.
Other fourth quarter and full-year highlights include:
New Product Initiatives:
The roll out of U S WEST's Access2 Advanced PCS wireless service to six
new markets - three in Colorado (Colorado Springs, Ft. Collins, and
Greeley); two in Oregon (Portland and Salem); and Vancouver, Wash. Earlier
this week, U S WEST Communications launched Access2 service in Phoenix -
the third major-market introduction of the "one-number" integrated
wireless/wireline service. Coverage is now over six million POPs - more
than 20 percent of the population in U S WEST's 14 states.
In addition to its launch of high-speed DSL MegaBit Services in Phoenix in
October, the company also rolled out U S WEST.net, its Internet access
service, for consumers and businesses in Phoenix and Denver during the
fourth quarter. Last week, the company announced plans to roll out an
upgraded MegaBit Services ADSL and U S WEST.net to customers in 40 cities
throughout its region by mid-year 1998.
On the small business side, sales of Centrex 21 - the company's enhanced
Centrex product - increased by 52 percent during the quarter, bringing
total sales to more than 211,000 units.
-more-
U S WEST Communications Fourth Quarter Earnings - Page 3
The continuing 1997 rollout of National Directory Assistance to nine of
the company's 14 states. National DA service allows customers to obtain
phone numbers anywhere in the U. S. simply by calling 1-411. U S WEST
Communications continues to be the leader among the RBOCs with National DA
in terms of geographic coverage and speed to market. In each market
introduction, the company has attained better than 20 percent of market
share.
Volumes and Penetration:
The addition of 683,000 access lines (adjusted for the sales of selected
rural exchanges) in 1997 for an access-line growth rate of 4.4 percent. On
an adjusted basis for the year, business access lines grew at 5.8 percent;
residential access lines grew at 3.9 percent; and residential additional
lines grew 28.4 percent, reaching a second-line penetration level of 13.7
percent.
Residential penetration levels at year's end for the company's most
popular custom calling features remained strong: Voice Messaging, 18
percent (tops in the industry); Caller ID, 28 percent; and Call Waiting, 39
percent. The company also has a Caller ID campaign underway, which, through
Feb. 2 had added nearly 534,000 new subscribers.
Through the end of the year, the company has sold more than 205,000 Home
Receptionist and Business Receptionist Screen Phones, making it the
industry leader in sales of this product line. These phones visually and
functionally integrate a number of custom calling services, and increase
penetration of vertical services.
Sales and Revenues:
A 23 percent increase in private line and special access revenues, which
totaled $229 million for the fourth quarter -- 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.
Total vertical services revenue - including not only custom calling
services such as call waiting, but also voice messaging and Caller ID
(CLASS) services - are up 15 percent from fourth quarter 1996 to about $300
million. Those revenues now represent 11 percent of total revenues before
the regulatory charge.
Costs and Margins:
Absorbed approximately $150 million in expenses and approximately $190
million in capital related to interconnection and number portability in
1997. The company expects to increase spending on interconnection in 1998.
-more-
U S WEST Communications Fourth Quarter Earnings - Page 4
Growth in cash provided by operating activities of 16 percent, or $542
million, and even stronger growth in net cash flow, enabled the company to
reduce its borrowing levels by $852 million during the year.
U S WEST Communications (NYSE: USW) provides a full range of telecommunications
services - including wireline, wireless PCS and data networking - 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, 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, MediaOne Group, is
involved in domestic and international cable and telephony, wireless
communications, and directory and information services. U S WEST has proposed
splitting the two groups into separate public companies sometime after mid-1998,
pending shareowner and other approvals.
[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 those statements, we claim the protection of the safe harbor
for forward-looking statements contained in the Private Securities Litigation
Reform Act of 1995. Discussion of factors that may affect future results is
contained in our recent filings with the Securities and Exchange Commission.]
###
EXHIBIT 99A
COMBINED STATEMENTS OF OPERATIONS U S WEST COMMUNICATIONS GROUP
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended Year Ended
December 31, % December 31, %
In millions 1997 1996 Change 1997 1996 Change
- - ------------------------ ------- --------------------- -------------
<S> <C> <C> <C> <C> <C> <C>
OPERATING REVENUES
Local service $ 1,277 $ 1,238 3.2 $ 5,016 $ 4,770 5.2
Interstate access 638 653 (2.3) 2,666 2,507 6.3
Intrastate access 153 199 (23.1) 761 770 (1.2)
Long-distance network 164 260 (36.9) 885 1,100 (19.5)
Other services 284 249 14.1 991 932 6.3
---------------- -------- --------
Total operating revenues 2,516 2,599 (3.2) 10,319 10,079 2.4
---------------- -------- --------
OPERATING EXPENSES
Employee-related 978 906 7.9 3,697 3,594 2.9
Other operating 565 457 23.6 1,870 1,634 14.4
Taxes other than
income taxes 108 98 10.2 416 389 6.9
Depreciation & amort 535 542 (1.3) 2,126 2,122 0.2
---------------- -------- --------
Total operating expenses 2,186 2,003 9.1 8,109 7,739 4.8
---------------- -------- --------
Income from operations 330 596 (44.6) 2,210 2,340 (5.6)
Interest expense 100 113 (11.5) 403 445 (9.4)
Gains on sales of rural
telephone exchanges - 8 - 77 59 30.5
Gain on sale of investment
in Bellcore 53 - - 53 - -
Other expense 21 19 10.5 73 41 78.0
---------------- -------- --------
Income before income
taxes, extd item &
cum effect of change in
accounting principle 262 472 (44.5) 1,864 1,913 (2.6)
Income tax provision 92 161 (42.9) 684 698 (2.0)
---------------- -------- --------
Income before extd item &
cum effect of change in
accounting principle 170 311 (45.3) 1,180 1,215 (2.9)
Extraordinary item: Early
extinguishment of debt-
net of tax - - - (3) - -
---------------- -------- --------
Income before cum
effect of change in
accounting principle 170 311 (45.3) 1,177 1,215 (3.1)
Cumulative effect of
change in accounting
principle - net of tax - - - - 34 -
---------------- -------- --------
NET INCOME $ 170 $ 311 (45.3)$ 1,177 $ 1,249 (5.8)
================ ======== ========
</TABLE>
5
<TABLE>
<CAPTION>
COMBINED STATEMENTS OF OPERATIONS, U S WEST COMMUNICATIONS GROUP
CONTINUED (UNAUDITED)
Quarter Ended Year Ended
In millions, except December 31, % December 31, %
per share amounts 1997 1996 Change 1997 1996 Change
- - ------------------------ ------- --------------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Average common shares
outstanding 483.9 479.9 0.8 482.8 477.5 1.1
================ ======== ========
Earnings per common
share:
Income before extd
item & cum effect
of change in accounting
principle $ 0.35 $ 0.65 (46.2) $ 2.44 $ 2.55 (4.3)
Extraordinary item: Early
extinguishment of debt - - - (0.01) - -
Cumulative effect of
change in accounting
principle - - - - 0.07 -
---------------- -------- --------
Earnings per
common share $ 0.35 $ 0.65 (46.2) $ 2.43 $ 2.62 (7.3)
================ ======== ========
</TABLE>
6
EXHIBIT 99A.1
EARNINGS NORMALIZATION SCHEDULE U S WEST COMMUNICATIONS GROUP
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended Year Ended
In millions, except December 31, % December 31, %
per share amounts 1997 1996 Change 1997 1996 Change
- - ------------------------ ------- --------------------- -------------
<S> <C> <C> <C> <C> <C> <C>
NORMALIZED INCOME:
Reported net income $ 170 $ 311 (45.3 $1,177 $1,249 (5.8)
Adjustments to normalize
net income:
Rural exchange sales - (5) - (48) (36) 33.3
Bellcore sale (32) - - (32) - -
Extraordinary item-net
of tax - - - 3 - -
Cumulative effect of
change in accounting
principle-net of tax - - - - (34) -
Current year effect of
accounting change -
net of tax - (2) - - (15) -
---------------- -------- --------
Normalized income $ 138 $ 304 (54.6) $1,100 $1,164 (5.5)
================ ======== ========
NORMALIZED EARNINGS PER
COMMON SHARE:
Reported net income $ 0.35 $ 0.65 (46.2) $ 2.43 $ 2.62 (7.3)
Adjustments to normalize
net income:
Rural exchange sales - (0.01) - (0.10) (0.08) 25.0
Bellcore sale (0.07) - - (0.07) - -
Extraordinary item-net
of tax - - - 0.01 - -
Cumulative effect of
change in accounting
principle-net of tax - - - - (0.07) -
Current year effect of
accounting change -
net of tax - (0.01) - - (0.03) -
---------------- -------- --------
Normalized earnings
per common share $ 0.28 $ 0.63 (55.6) $ 2.28 #$ 2.44 (6.6)
================ ======== ========
<FN>
# Amount does not foot due to rounding of the individual components.
</FN>
</TABLE>
7
EXHIBIT 99A.2
SELECTED COMBINED GROUP DATA U S WEST COMMUNICATIONS GROUP
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended Year Ended
In millions, except December 31, % December 31, %
per share amounts 1997 1996 Change 1997 1996 Change
- - ------------------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Normalized access lines (thousands):
Business 4,805 4,543 5.8 4,805 4,543 5.8
Consumer 11,302 10,881 3.9 11,302 10,881 3.9
Total 16,107 15,424 4.4 16,107 15,424 4.4
Access lines
(thousands):
Business 4,790 4,543 5.4 4,790 4,543 5.4
Consumer 11,243 10,881 3.3 11,243 10,881 3.3
Total access lines 16,033 15,424 3.9 16,033 15,424 3.9
Billed access minutes
of use (millions):
Interstate 14,277 13,365 6.8 55,362 52,039 6.4
Intrastate 3,027 2,643 14.5 11,729 10,451 12.2
Total minutes of use 17,304 16,008 8.1 67,091 62,490 7.4
Employees:
Communications Grp 47,568 48,037 (1.0) 47,568 48,037 (1.0)
Telephone
operations only 43,749 45,427 (3.7) 43,749 45,427 (3.7)
Telephone empl per
10,000 access lines 27.3 29.5 (7.5) 27.3 29.5 (7.5)
Dividends per common
share $ 0.535 $ 0.535 - $ 2.14 $ 2.14 -
Common shares
outstanding 484.5 480.5 0.8 484.5 480.5 0.8
Capital expend $ 1,014 $ 798 27.1 $ 2,643 $ 2,806 (5.8)
EBITDA (#1) 865 1,138 (24.0) 4,336 4,462 (2.8)
EBITDA margin 34.4% 43.8% - 42.0% 44.3% -
Return on equity(#2) 15.6% 31.5% - 27.9% 32.0% -
Debt-to-capital ratio:
Communications Grp 57.3% 62.4% - 57.3% 62.4% -
Telephone
operations only 55.6% 60.5% - 55.6% 60.5% -
<FN>
<F1>
# 1: Earnings before interest, taxes, depreciation, amortization,
and other (EBITDA). EBITDA also excludes gains on asset sales.
<F2>
# 2: Based on income before extraordinary item and cumulative effect
of change in accounting principle.
</FN>
</TABLE>
8
EXHIBIT A.3
COMBINED BALANCE SHEETS U S WEST COMMUNICATIONS GROUP
(UNAUDITED)
<TABLE>
<CAPTION>
December 31,
In millions 1997 1996
- - -------------------------------------- ------------- --------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 27 $ 80
Accounts and notes receivable 1,681 1,622
Inventories and supplies 150 144
Deferred tax asset 247 171
Prepaid and other 77 65
------------- --------------
Total current assets 2,182 2,082
------------- --------------
Gross property, plant and equipment 33,408 32,645
Less accumulated depreciation 19,176 18,639
------------- --------------
Property, plant and equipment - net 14,232 14,006
Other assets 832 827
------------- --------------
Total assets $ 17,246 $ 16,915
============= ==============
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt $ 626 $ 834
Accounts payable 1,415 989
Dividends payable 259 257
Other 1,700 1,387
------------- --------------
Total current liabilities 4,000 3,467
------------- --------------
Long-term debt 5,020 5,664
Postretirement and other postemployment
benefit obligations 2,468 2,387
Deferred taxes, credits and other 1,559 1,480
Communications Group equity 4,199 3,917
------------- --------------
Total liabilities and equity $ 17,246 $ 16,915
============= ==============
</TABLE>
9
EXHIBIT 99A.4
COMBINED STATEMENTS OF U S WEST COMMUNICATIONS GROUP
CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Year Ended
December 31,
In millions 1997 1996
- - ------------------------------------------------- -------- ---------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 1,177 $ 1,249
Adjustments to net income:
Depreciation and amortization 2,126 2,122
Gains on sales of rural telephone exchanges (77) (59)
Gain on sale of investment in Bellcore (53) -
Cumulative effect of change in accounting
principle - (34)
Deferred income taxes and amortization
of investment tax credits (18) 91
Changes in operating assets and liabilities:
Restructuring payments (66) (226)
Postretirement medical and life costs,
net of cash fundings 80 28
Accounts receivable (46) (5)
Inventories, supplies and other (45) 27
Accounts payable and accrued liabilities 564 98
Other - net 206 15
- - ------------------------------------------------- -------- ---------
Cash provided by operating activities 3,848 3,306
- - ------------------------------------------------- -------- ---------
INVESTING ACTIVITIES
Expenditures for property, plant and equipment (2,139) (2,419)
Purchase of PCS wireless licenses (73) -
Proceeds from sales of rural telephone exchanges 67 174
Proceeds from sale of investment in Bellcore 65 -
Proceeds from disposals of property, plant
and equipment 22 15
- - ------------------------------------------------- -------- ---------
Cash (used for) investing activities (2,058) (2,230)
- - ------------------------------------------------- -------- ---------
FINANCING ACTIVITIES
Net (repayments of) proceeds from short-term debt (510) 96
Proceeds from issuance of long-term debt 29 23
Repayments of long-term debt (445) (482)
Dividends paid on common stock (992) (939)
Proceeds from issuance of common stock 75 134
- - ------------------------------------------------- -------- ---------
Cash (used for) financing activities (1,843) (1,168)
- - ------------------------------------------------- -------- ---------
CASH AND CASH EQUIVALENTS
Decrease (53) (92)
Beginning balance 80 172
- - ------------------------------------------------- -------- ---------
Ending balance $ 27 $ 80
================================================= ======== =========
</TABLE>
10
EXHIBIT 99B
Date: February 12, 1998
Contacts: Steve Lang Cathy Fowler
303-793-6290 303-793-6509
U S WEST MEDIA GROUP REPORTS NINTH CONSECUTIVE QUARTER
OF DOUBLE-DIGIT GROWTH IN OPERATING CASH FLOW
- Pares Asset Base to Focus on Broadband in U.S. and Abroad,
International Wireless -
- One Million American Homes Now Can Get High-Speed Data -
- International Lines of Business Cash-Flow Positive for Entire Year -
ENGLEWOOD, Colo. -- U S WEST Media Group (NYSE: UMG) today reported its ninth
straight quarter and second straight year of double-digit growth in operating
cash flow. Media Group is changing its name to MediaOne Group as part of U S
WEST's plan to split into two separate public companies.
For the fourth quarter, MediaOne Group reported - on a proportionate basis:
o A 27 percent increase in operating cash flow, to $677 million. MediaOne
Group's operating cash flow for the fourth quarter 1996 was $534 million.
Annual operating cash flow increased 18 percent, to $2.6 billion from $2.2
billion in 1996. When adjusted mainly for the sale of certain international
interests, operating cash flow increased 19 percent in 1997. (The 1996
numbers have been adjusted to include Continental Cablevision's results for
all of 1996, even though it didn't merge with MediaOne Group until Nov. 15,
1996.)
Operating cash flow, which represents earnings before interest, taxes,
depreciation and amortization (EBITDA), is a key indicator of the company's
operating performance.
o An 8.5 percent increase in revenue, to $2.4 billion. MediaOne Group's
revenue for the fourth quarter 1996 was $2.2 billion. Annual revenue
increased 12 percent, to $9.1 billion from $8.1 billion in 1996.
-more-
Page 2
Because MediaOne Group operates numerous joint ventures, the company uses
proportionate accounting to reflect its share of operating revenues and expenses
associated with these operations.
"This was a solid quarter and very good year for us," said Chuck Lillis,
MediaOne Group president and chief executive officer. "We announced several
major strategic initiatives that allow us to focus on broadband and
international wireless. We sold more than $2 billion of nonstrategic assets --
twice what we promised. And we delivered solid operations. As a result, we
generated $1.2 billion of net cash flow during 1997.
"All told, we made great strides during the year, both strategically and
operationally. And we are well positioned and highly focused for 1998," Lillis
said.
During the past 12 months, the company announced strategic initiatives that
include:
o A plan to split from U S WEST. The process is on schedule for completion
sometime after mid-1998. Included is the transfer of U S WEST Dex to U S
WEST Communications at the split, removing $3.9 billion in debt from
MediaOne Group's books and delivering $850 million in equity to MediaOne
Group shareowners.
o The pending merger of its domestic wireless assets with AirTouch, a $5.7
billion tax-efficient transaction, including the removal of $1.4 billion in
debt from MediaOne Group's books.
o The receipt of $2 billion from domestic and international asset sales
allowing MediaOne Group to focus on its core business.
Operationally during the past 12 months, the company:
o Brought high-speed data capability to one million American homes, and
signed up 23,000 customers, the highest penetration rate of any major
provider in the U.S.
o Announced that its high-speed data service, MediaOne Express, will be
combined with Time Warner's Road Runner service, creating the nation's
largest cable-modem operation.
o Increased to 57 percent the portion of its network that has been upgraded
to broadband (550 megahertz or better).
o Launched telephone service to residential customers in The Netherlands
and Japan, and in Belgium and Atlanta in January.
-more-
Page 3
o For the first time, achieved operating-cash-flow-positive results for a full
year in international operations.
o Hit the one-million customer milestone in two international markets: the
One 2 One wireless joint venture in the U.K. and the central European
wireless ventures.
Fourth quarter proportionate operating highlights include:
o Domestic Broadband: MediaOne ended the fourth quarter with 5.1 million
customers, up 2.4 percent from last year, normalized for various
transactions. Operating cash flow, including MediaOne Group's investment in
Time Warner Entertainment, increased 25 percent, to $445 million.
o International: MediaOne Group's wireless customer base doubled, to more
than one million, compared with the end of 1996. Normalized cable
subscribers grew 8 percent and telephone lines grew 33 percent compared
with 1996. Operating cash flow from international operations was $22
million during the period, compared with last year's $21 million.
MediaOne Group's fourth-quarter net loss was $133 million, of which $804 million
related to pre-tax, noncash items. Of this, $390 million was depreciation and
amortization; $414 million was equity losses, including a $200 million charge
arising from the Asian monetary crisis.
MediaOne 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 1997, MediaOne Group
had proportionate revenue of $9.1 billion.
MediaOne 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. U S WEST has proposed splitting the two groups
into separate public companies sometime after mid-1998, pending shareowner and
other approvals.
###
[Safe Harbor statement: This document contains statements about expected future
events and financial results that are forward-looking and subject to risk and
uncertainties. For those statements, we claim the protection of the safe harbor
for forward-looking statements contained in the Private Securities Litigation
Reform Act of 1995. Discussion of factors that may affect future results is
contained in our recent filings with the Securities and Exchange Commission.]
Note: This release and the financial statements will be available on the
Internet after 7:30 a.m.(MST) by accessing U S WEST's Internet site
www.uswest.com
<PAGE>
U S WEST Media Group Page 4
U S WEST MEDIA GROUP - SELECTED OPERATING HIGHLIGHTS
All Amounts Shown are Proportionate Unless Otherwise Stated
$ in millions
<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------------------------------------------------------------------
CABLE AND BROADBAND COMMUNICATIONS
- - --------------------------------------------------------------------------- ------------------------------------------------------
Domestic International
- - --------------------------------------------------------------------------- ------------------------------------------------------
1997 Growth * 1997 Growth*
---- -------- ---- -------
<S> <C> <C> <C> <C> <C>
Total Total
Revenue $5,210 6.5% Customers (000's) 899 8.2%**
Operating Cash Flow $1,641 11.5% Revenue $474 29.9%
Operating Cash Flow $36 up $40
Consolidated Cable (excluding new services)
Homes Passed (000's) 8,373 1.9%**
Multichannel Video Subscribers (000's) 5,091 2.4%**
Revenue $2,303 8.9%
Operating Cash Flow $1,013 10.0%
High Speed Data Customers (000's) 23.0 -
</TABLE>
<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------------------------------------------------------------------
WIRELESS
- - ----------------------------------------------------------------------------------------------------------------------------------
Domestic International
- - ----------------------------------------------------------------------------------------------------------------------------------
1997 Growth 1997 Growth
---- ------ ---- ------
<S> <C> <C> <C> <C> <C>
Cellular Total
POPs (millions) 20.8 2.5% Customers (000's) 1,018 100.0%
Subscribers (000's) 2,374 26.7% Revenue $756 73.4%
Service Revenue $1,153 18.4% Operating Cash Flow $41 up $43
Operating Cash Flow $479 36.9%
OCF as a % of service revenue 41.5% up 5.6 pp One 2 One
Average revenue per customer $46.42 -11.6% Subscribers (000's) 508 86.1%
(whole dollars) Market Share 12.0%
PrimeCo Personal Communications Coverage 95%
POPs (millions) 14.2 -
Subscribers (000's) 90 -
</TABLE>
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------------
DIRECTORY AND INFORMATION SERVICES
- - --------------------------------------------------------------------------------
Domestic International
- - --------------------------------------------------------------------------------
1997 Growth 1997 Growth
---- ------ ---- ------
<S> <C> <C> <C> <C> <C>
Directory Publishing Total
Local Advertisers (000's) 479 -0.6% Revenue $110 -46.6%
Revenue $1,181 7.2% Operating Cash Flow $4 down $16
Operating Cash Flow $617 16.2%
Operating Cash Flow Margin 52.2% up 4.0 pp
Revenue per Advertiser (whole dollars) $2,329 7.3%
<FN>
* Growth rates are pro forma as if the Continental merger occurred January 1, 1996.
** Normalized for sales and a domestic acquisition.
</FN>
</TABLE>
EXHIBIT 99B.1
PRO FORMA COMBINED U S WEST MEDIA GROUP
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended Year Ended
December 31, December 31,
1996 1996
Pro % Pro %
In millions 1997 forma Change 1997 forma Change
- - -------------------- ------- -------------- ------- --------------
<S> <C> <C> <C> <C> <C> <C>
SALES AND OTHER
REVENUES $1,289 $1,224 5.3 $5,043 $4,592 9.8
OPERATING EXPENSES
Costs of sales and
other revenues 414 432 (4.2) 1,666 1,566 6.4
Selling, general and
administrative 422 400 5.5 1,487 1,393 6.7
Depreciation 256 187 36.9 764 658 16.1
Amortization 134 134 - 530 520 1.9
---------------- ----------------
Depreciation & amort. 390 321 21.5 1,294 1,178 9.8
---------------- ----------------
Total oper. expenses 1,226 1,153 6.3 4,447 4,137 7.5
---------------- ----------------
Income from
operations 63 71 (11.3) 596 455 31.0
Interest expense 160 167 (4.2) 680 683 (0.4)
Equity losses in
unconsol. ventures 414 126 - 909 386 -
Gains on sales of
investments 313 - - 421 - -
Guaranteed minority
interest expense 21 19 10.5 87 55 58.2
Other income(expense) 31 - - 17 (32) -
---------------- ----------------
Loss before income
tax benefit (188) (241) (22.0) (642) (701) (8.4)
Income tax
benefit 55 67 (17.9) 162 188 (13.8)
---------------- ----------------
NET LOSS (133) (174) (23.6) (480) (513) (6.4)
Preferred dividends 13 13 - 52 50 4.0
---------------- ----------------
LOSS AVAILABLE
FOR COMMON STOCK $ (146)$ (187) (21.9) $ (532)$ (563) (5.5)
================ ================
</TABLE>
-5-
PRO FORMA COMBINED U S WEST MEDIA GROUP
STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended Year Ended
December 31, December 31,
1996 1996
In millions, except Pro % Pro %
per share amounts 1997 forma Change 1997 forma Change
- - -------------------- ------- -------------- ------- --------------
<S> <C> <C> <C> <C> <C> <C>
Basic and diluted
average common shares
outstanding 607.3 620.5 (2.1) 606.7 623.2 (2.6)
================ ================
Basic and diluted
loss per common
share $(0.24) $(0.30) (20.0) $(0.88) $ (0.90) (2.2)
================ ================
</TABLE>
merger, Continental's acquisition of the remaining interest in Meredith/New
Heritage Strategic Partners, L.P. and the reclassification of the Teleport
Communications Group, Inc. investment to equity method as if each transaction
occurred as of January 1, 1996. Also includes Continental's results for
cable-telephony ventures in Singapore and Argentina.
The average common shares outstanding for the quarter ended and year ended
December 31, 1996, include 131.3 million shares related to the Continental
merger as if it had occurred as of January 1, 1996.
-6-
EXHIBIT 99B.2
SELECTED FINANCIAL DATA U S WEST MEDIA GROUP
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended Year Ended
December 31, December 31,
1996 % 1996 %
In millions 1997 Pro forma Change 1997 Pro forma Change
- - ------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Consolidated Revenues
Cable & broadband
Domestic $ 602 $ 546 10.3 2,323 $2,125 9.3
Int'l 4 6 (33.3) 18 6 -
Wireless
Domestic 357 314 13.7 1,428 1,183 20.7
Directory &
info. svcs.
Domestic 318 294 8.2 1,197 1,120 6.9
Int'l - 57 - 48 139 (65.5)
Corp. & Other 8 7 14.3 29 19 52.6
------------------ ------------------
Total $1,289 $1,224 5.3 $5,043 $4,592 9.8
================== ==================
Consolidated EBITDA
Cable & broadband
Domestic $ 239 $ 209 14.4 $ 930 $ 892 4.3
Int'l (4) (4) - (6) (4) 50.0
Wireless
Domestic 98 83 18.1 533 390 36.7
Int'l (1) (2) (50.0) (11) (2) -
Directory &
info. svcs.
Domestic 164 139 18.0 586 488 20.1
Int'l - 13 - (4) 14 -
Corp. & Other (43) (46) (6.5) (138) (145) (4.8)
------------------ ------------------
Total $ 453 $ 392 15.6 $1,890 $1,633 15.7
================== ==================
</TABLE>
The 1996 amounts are pro forma as if the Continental Cablevision merger occurred
January 1, 1996.
EXHIBIT 99B.3
SELECTED FINANCIAL AND DOMESTIC CABLE AND BROADBAND
OPERATING HIGHLIGHTS
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended Year Ended
December 31, December 31,
1996 1996
Dollars in Pro % Pro %
millions 1997 forma Change 1997 forma Change
- - ------------------------- ---------------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Domestic Cable &
Broadband Results
Revenues
Basic cable $ 387 $ 348 11.2 $ 1,518 $1,372 10.6
Premium 81 86 (5.8) 326 346 (5.8)
Advertising 38 37 2.7 129 126 2.4
Primestar 31 20 55.0 109 69 58.0
Pay-per-view 13 15 (13.3) 56 49 14.3
New prod. tier 4 2 - 13 4 -
Equip. & Install 40 34 17.6 152 133 14.3
Other 8 4 - 20 26 (23.1)
------------------- -------------------
Total Revenue $ 602 $ 546 10.3 $ 2,323 $2,125 9.3
------------------- -------------------
EBITDA
Core cable $ 262 $ 219 19.6 $ 997 $ 912 9.3
Primestar 4 2 - 16 9 77.8
Other (27) (12) - (83) (29) -
------------------- -------------------
Total EBITDA $ 239 $ 209 14.4 $ 930 $ 892 4.3
------------------- -------------------
EBITDA margins
Core cable 46.5% 41.9% 45.4% 44.6%
Primestar 12.9% 10.0% 14.7% 13.0%
Other Operating
& Financial
Highlights
Homes passed
(thousands) 8,373 8,294 1.9* 8,373 8,294 1.9*
Subscribers
(thousands):
Basic cable 4,910 4,866 1.6* 4,910 4,866 1.6*
Primestar 181 138 31.2 181 138 31.2
Basic pen. 58.6% 58.7% 58.6% 58.7%
Premium units
(thousands) 4,012 3,862 4.2* 4,012 3,862 4.2*
Premium/Basic 81.7% 79.4% 81.7% 79.4%
High speed data
cust. (actual) 23,000 - - 23,000 - -
Core cbl. mnly.
rev./avg. sub $ 38.52 $ 36.54 5.4 $ 37.76 $36.06 4.7
<FN>
<F1>
The 1996 amounts are pro forma as if the Continental
Cablevision merger occurred January 1, 1996.
<F2>
* Excluding the effects of an acquisition and dispositions.
</FN>
</TABLE>
-8-
EXHIBIT 99B.4
COMBINED BALANCE SHEETS U S WEST MEDIA GROUP
(UNAUDITED) December 31,
<TABLE>
<CAPTION>
In millions 1997 1996
- - --------------------------------------- ------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 184 $ 121
Accounts and notes receivable 589 508
Deferred directory costs 257 259
Marketable securities - 58
Other assets 298 193
----------- -----------
Total current assets 1,328 1,139
----------- -----------
Property, plant and equipment - net 4,348 4,275
Investment in Time Warner Entertainment 2,486 2,477
Net investment in international ventures 475 1,548
Net investment in assets held for sale 419 409
Intangible assets - net 12,597 12,595
Other assets 961 1,618
----------- -----------
Total assets $ 22,614 $ 24,061
=========== ===========
LIABILITIES AND EQUITY
Current liabilities:
Short-term debt $ 804 $ 217
Due to Continental shareholders - 1,150
Accounts payable 432 425
Deferred revenue and customer deposits 152 129
Other payables 1,038 795
----------- -----------
Total current liabilities 2,426 2,716
----------- -----------
Long-term debt 8,228 8,636
Deferred income taxes 3,262 3,600
Deferred credits and other 393 346
Company-obligated mandatorily redeemable
preferred securities of subsidiary
trust holding solely Company-guaranteed
debentures 1,080 1,080
Preferred stock subject to
mandatory redemption 100 51
Media Group equity 7,171 7,723
Company LESOP guarantee (46) (91)
----------- -----------
Total equity 7,125 7,632
----------- -----------
Total liabilities and equity $ 22,614 $ 24,061
=========== ===========
</TABLE>
-9-
EXHIBIT 99B.5
SELECTED PROPORTIONATE U S WEST MEDIA GROUP
FINANCIAL DATA
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended Year Ended
December 31, December 31,
1996 % 1996 %
In millions 1997 Pro forma Change 1997 Pro forma Change
- - -------------------------- ----------------- -------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Proportionate Revenues
Cable & broadband
Domestic $1,402 $1,322 6.1 $5,210 $4,893 6.5
Int'l 109 109 - 474 365 29.9
Wireless
Domestic 331 288 14.9 1,340 1,075 24.7
Int'l 234 138 69.6 756 436 73.4
Directory &
info. svcs.
Domestic 319 294 8.5 1,200 1,120 7.1
Int'l 19 75 (74.7) 110 206 (46.6)
Corp. & Other 5 3 66.7 17 12 41.7
----------------- ---------------
Total $2,419 $2,229 8.5 $9,107 $8,107 12.3
================= ===============
Proportionate EBITDA
Cable & broadband
Domestic $ 445 $ 356 25.0 $1,641 $1,472 11.5
Int'l (2) 9 - 36 (4) -
Wireless
Domestic 68 54 25.9 398 307 29.6
Int'l 21 (3) - 41 (2) -
Directory &
info. svcs.
Domestic 162 139 16.5 581 488 19.1
Int'l 3 15 (80.0) 4 20 (80.0)
Corp. & Other (20) (36) (44.4) (80) (66) 21.2
----------------- ----------------
Total $ 677 $ 534 26.8 $2,621 $2,215 18.3
================= ================
<FN>
The 1996 amounts are pro forma as if the Continental
Cablevision merger occurred January 1, 1996.
</FN>
</TABLE>
-10-
EXHIBIT 99B.6
OTHER PROPORTIONATE INFORMATION U S WEST MEDIA GROUP
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended
December 31, %
In thousands unless noted 1997 1996 Change
- - ---------------------------- --------- --------- ---------
<S> <C> <C> <C>
Cable & broadband
Domestic
Homes passed 12,313 12,191 1.0
Subscribers 7,705 7,562 1.9
International
Homes passed 2,030 2,450 18.8 *
Cable subscribers 899 1,151 8.2 *
Telephone lines 403 303 33.0
Wireless
Domestic
Cellular POPs-managed
(millions) 20.8 20.3 2.5
Cellular subscribers 2,374 1,873 26.7
PCS POPs (millions) 14.2 14.7 (3.4)
PCS subscribers 90 9 -
International
POPs (millions) 76.9 77.3 (0.5)
Subscribers 1,018 509 100.0
Directory & information svcs.
Dex revenue per directory
advertiser (whole dollars) $ 2,329 $ 2,171 7.3
<FN>
* Excludes the effects of the sale of Fintelco.
</FN>
</TABLE>
-11-
EXHIBIT 99B.7
INVESTING ACTIVITY U S WEST MEDIA GROUP
<TABLE>
<CAPTION>
Quarter Ended
Dec Sep June Mar
31, 30, 30, 31, YTD
In millions 1997 1997 1997 1997 Total
- - ---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cash from (used for)
investing activities
Cable & broadband
Domestic invest. (1) $ (397) $ (295) $ (300) $ (261) $(1,253)
Int'l invest. (6) (277) (9) (12) (304)
Wireless
Domestic invest. (115) (113) (123) (141) (492)
Int'l invest. (8) - - (34) (42)
Directory & Other (25) (12) (6) (16) (59)
Asset sales 1,113 320 419 206 2,058
--------------------------------------------
Total $ 562 $ (377) $ (19) $ (258) $ (92)
============================================
</TABLE>
<TABLE>
<CAPTION>
Assets Sold Year-to-Date
- - -----------------------------------------------------------------
Asset Closed Proceeds
(millions)
- - -----------------------------------------------------------------
<S> <C> <C>
France PCN 1Q 81
Time Warner Inc. 2Q 220
Thomson Directories 2Q 121
Polska 4Q 27
Fintelco (2) 4Q 641
Teleport Communications Various 678
Capital Assets Various 231
Other Various 59
------
Total 2,058
======
<FN>
<F1>
(1) Excludes $1,150 paid to Continental shareholders in first quarter 1997.
<F2>
(2) Total sale price was approximately $1.1 billion, with consideration in the
form of cash and assumption of debt. Media Group's cash proceeds in
connection with this transaction amount to $641 million.
</FN>
</TABLE>
-12-
EXHIBIT 99B.8
INVESTING ACTIVITY U S WEST MEDIA GROUP
(UNAUDITED)
<TABLE>
<CAPTION>
Valuation of Investments Publicly Traded
- - -----------------------------------------------------------------
Number Price per Total
of shares share as of value
Investment (thousands) 12/31/97 (millions)
- - -----------------------------------------------------------------
<S> <C> <C> <C>
Telewest (TWSTY) 37,875 $ 12.25 464.0
Home Shopping
Network(HSNI) 220 51.50 11.3
Flextech (FLXT) 10,519 8.67 91.2
Sportsline (SPLN) 1,996 10.75 21.5
Preview Media (PTVL) 933 7.63 7.1
</TABLE>
-13-
EXHIBIT 99B.9
CONSOLIDATED STATEMENTS OF U S WEST, Inc.
OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended Year Ended
December 31, % December 31, %
In millions 1997 1996 Change 1997 1996 Change
- - ---------------------- ------- ------- ------ ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
SALES & OTHER REVENUE $3,764 $3,558 5.8 $15,235 $12,911 18.0
OPERATING EXPENSES
Employee-related 1,285 1,166 10.2 4,917 4,412 11.4
Other operating 1,045 848 23.2 3,617 2,671 35.4
Taxes other than
income taxes 116 110 5.5 475 429 10.7
Depreciation & amort 925 748 23.7 3,420 2,544 34.4
------- ------- ------- -------
Total oper expenses 3,371 2,872 17.4 12,429 10,056 23.6
------- ------- ------- -------
Income from operations 393 686 (42.7) 2,806 2,855 (1.7)
Interest expense 260 201 29.4 1,083 612 77.0
Equity losses in
unconsol ventures 414 122 - 909 346 -
Gains on sales of
investments 313 - - 421 - -
Gains on sales of rural
telephone exchanges - 8 - 77 59 30.5
Gain on sale of investment
in Bellcore 53 - - 53 - -
Guaranteed minority
interest expense 22 19 15.8 87 55 58.2
Other income (expense) 11 (14) - (56) (61) 8.2
-------- ------- ------- -------
Income before inc taxes,
extd item & cum effect
of chg in acctg princ 74 338 (78.1) 1,222 1,840 (33.6)
Income tax provision 37 108 (65.7) 522 696 (25.0)
-------- ------- ------- -------
Income before extd
item & cum effect
of chg in acctg princ 37 230 (83.9) 700 1,144 (38.8)
Extraordinary item:
Early extinguishment
of debt - net of tax - - - (3) - -
-------- ------- ------- -------
Income before cum effect
of chg in acctg princ 37 230 (83.9) 697 1,144 (39.1)
Cumulative effect of
change in accounting
principle - net of tax - - - - 34 -
-------- ------- ------- -------
NET INCOME 37 230 (83.9) 697 1,178 (40.8)
Preferred dividends 13 6 - 52 9 -
-------- ------- ------- -------
EARNINGS AVAILABLE FOR
COMMON STOCK $ 24 $ 224 (89.3) $ 645 $1,169 (44.8)
======= ======= ======= =======
</TABLE>
1
CONSOLIDATED STATEMENTS OF U S WEST, Inc.
OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended Year Ended
In millions, except December 31, % December 31, %
per share amounts 1997 1996 Change 1997 1996 Change
- - ----------------------------- ----- -------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
COMMUNICATIONS GROUP:
Average common shares
outstanding 483.9 479.9 0.8 482.8 477.5 1.1
=============== ======= =======
Earnings per common
share:
Income before extd
item & cum effect of
change in accounting
principle $ 0.35 $ 0.65 (46.2) $ 2.44 $ 2.55 (4.3)
Extraordinary item:
Early extinguishment
of debt - - - (0.01) - -
Cumulative effect of
change in accounting
principle - - - - 0.07 -
------- -------- -------- --------
Earnings per
common share $ 0.35 $ 0.65 (46.2) $ 2.43 $ 2.62 (7.3)
======= ======== ======== =======
MEDIA GROUP:
Average common shares
outstanding 607.3 546.8 11.1 606.7 491.9 23.3
======= ======== ======== =======
Loss per
common share $(0.24) $ (0.16) 50.0 $ (0.88) $ (0.16) -
======= ======== ======== =======
</TABLE>
2
CONSOLIDATED STATEMENTS OF U S WEST, Inc.
OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Quarter Ended Year Ended
December 31, % December 31, %
Dollars in millions 1997 1996 Change 1997 1996 Change
- - ----------------------------- ------- ------ ------ ------- ------
<S> <C> <C> <C> <C> <C> <C>
SELECTED CONSOLIDATED DATA
Capital
expenditures $1,502 $1,137 32.1 $4,174 $3,474 20.1
Debt-to-capital
ratio (#1) 54.0% 54.8% - 54.0% 54.8% -
Employees 67,461 69,286 (2.6) 67,461 69,286 (2.6)
EBITDA $1,318 $1,434 (8.1) $6,226 $5,399 15.3
EBITDA margin 35.0% 40.3% - 40.9% 41.8% -
<FN>
<F1>
#1 Ratio includes preferred securities and other preferred stock subject to
mandatory redemption as a component of total capital. Including debt related to
the net investment in assets held for sale, preferred securities and other
preferred stock subject to mandatory redemption, the Company's percentage of
debt to total capital was 58.9% and 59.6% at December 31, 1997 and 1996,
respectively.
</FN>
</TABLE>
3
EXHIBIT 99B.10
CONSOLIDATED BALANCE SHEETS U S WEST, Inc.
(UNAUDITED)
<TABLE>
<CAPTION>
December 31,
In millions 1997 1996
- - ------------------------------------------ ------------ -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 211 $ 201
Accounts and notes receivable 2,249 2,113
Inventories and supplies 179 159
Deferred tax asset 373 213
Prepaid and other 387 426
------------ -------------
Total current assets 3,399 3,112
------------ -------------
Property, plant and equipment - net 18,580 18,281
Investment in Time Warner Entertainment 2,486 2,477
Net investment in international ventures 475 1,548
Intangible assets - net 12,674 12,595
Net investment in assets held for sale 419 409
Other assets 1,707 2,433
------------ -------------
Total assets $ 39,740 $ 40,855
============ =============
LIABILITIES AND SHAREOWNERS' EQUITY
Current liabilities:
Short-term debt $ 1,430 $ 1,051
Accounts payable 1,751 1,316
Due to Continental Cablevision
shareholders - 1,150
Dividends payable 268 263
Other payables 2,866 2,294
------------ -------------
Total current liabilities 6,315 6,074
------------ -------------
Long-term debt 13,248 14,300
Postretirement and other postemployment
benefit obligations 2,570 2,479
Deferred taxes 4,068 4,349
Deferred credits and other 1,035 973
Company-obligated mandatorily redeemable
preferred securities of subsidiary
trust holding solely Company-guaranteed
debentures 1,080 1,080
Preferred stock subject to
mandatory redemption 100 51
Shareowners' equity:
Preferred shares 923 920
Common shares 10,876 10,741
Retained earnings (deficit) (334) 18
LESOP guarantee (46) (91)
Foreign currency translation adjustments (95) (39)
------------ -------------
Total shareowners' equity 11,324 11,549
------------ -------------
Total liabilities & shareowners' equity $ 39,740 $ 40,855
============ =============
</TABLE>
4
<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-31-1997 DEC-31-1997
<PERIOD-START> OCT-01-1997 JAN-01-1997
<PERIOD-END> DEC-31-1997 DEC-31-1997
<CASH> 211 211
<SECURITIES> 0 0
<RECEIVABLES> 2,249 2,249
<ALLOWANCES> 0 0
<INVENTORY> 179 179
<CURRENT-ASSETS> 3,399 3,399
<PP&E> 39,223 39,223
<DEPRECIATION> 20,643 20,643
<TOTAL-ASSETS> 39,740 39,740
<CURRENT-LIABILITIES> 6,315 6,315
<BONDS> 13,248 13,248
1,180 1,180
923 923
<COMMON> 10,876 10,876
<OTHER-SE> (475) (475)
<TOTAL-LIABILITY-AND-EQUITY> 39,740 39,740
<SALES> 3,764 15,235
<TOTAL-REVENUES> 3,764 15,235
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 3,371 12,429
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 260 1,083
<INCOME-PRETAX> 74 1,222
<INCOME-TAX> 37 522
<INCOME-CONTINUING> 37 700
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 (3)
<CHANGES> 0 0
<NET-INCOME> 24 645
<EPS-PRIMARY> .35 2.43
<EPS-DILUTED> .35 2.41
</TABLE>
