-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ABMY+7f5mIvBwDR5olwHCWUm8EI6zTuiEucpL68I7R2fc68GS5WF0mJVRpwSloKq 32N6i5MgWUrru9hzOX+uNQ== 0001054522-98-000011.txt : 19980807 0001054522-98-000011.hdr.sgml : 19980807 ACCESSION NUMBER: 0001054522-98-000011 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 19980728 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980728 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: U S WEST INC /DE/ CENTRAL INDEX KEY: 0001054522 STANDARD INDUSTRIAL CLASSIFICATION: 4813 IRS NUMBER: 840953188 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-14087 FILM NUMBER: 98672302 BUSINESS ADDRESS: STREET 1: 1801 CALIFORNIA STREET STREET 2: SUITE 390 CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3036722700 MAIL ADDRESS: STREET 1: 1801 CALIFORNIA STREET STREET 2: SUITE 390 CITY: DENVER STATE: CO ZIP: 80202 FORMER COMPANY: FORMER CONFORMED NAME: USW-C INC DATE OF NAME CHANGE: 19980204 8-K 1 SECOND QUARTER EARNINGS =============================================================================== 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): July 28, 1998 U S WEST, Inc. (Formerly "USW-C, Inc.") (Exact name of registrant as specified in its charter)
A Delaware Corporation Commission File IRS Employer Identification (State of Incorporation) Number 1-14087 No. 84-0953188
1801 California Street, Denver, Colorado 80202 (Address of principal executive offices, including Zip Code) Telephone Number (303) 672-2700 (Registrant's telephone number, including area code) =============================================================================== Item 5. Other Events On July 27, 1998, U S WEST, Inc. (formerly "USW-C, Inc.") released its second quarter earnings results. The release and financial statements are attached hereto as Exhibits. Item 7. Exhibits Exhibit Description 99 Press Release issued July 27, 1998 concerning the earnings results of U S WEST, Inc. for the second quarter of 1998. 99A.1 Unaudited Combined Pro Forma Statements of Income of U S WEST, Inc. for the quarters and six-month periods ended June 30, 1997 and 1998, respectively, filed in connection with the Press Release dated July 27, 1998. 99A.2 Unaudited Pro Forma Earnings Normalization Schedule of U S WEST, Inc. for the quarters and six-months periods ended June 30, 1997 and 1998, respectively, filed in connection with the Press Release dated July 27, 1998. 99A.3 Unaudited Selected Consolidated Data of U S WEST, Inc. for the quarters and six-month periods ended June 30, 1997 and 1998, respectively, filed in connection with the Press Release dated July 27, 1998. 99A.4 Unaudited Consolidated Statements of Income of U S WEST, Inc. for the quarters and six-month periods ended June 30, 1997 and 1998, respectively, filed in connection with the Press Release dated July 27, 1998. 99A.5 Unaudited Consolidated Balance Sheets of U S WEST, Inc. for the six months ended June 30, 1998 and the year ended December 31, 1997, filed in connection with the Press Release dated July 27, 1998. 99A.6 Unaudited Consolidated Statements of Cash Flows of U S WEST, Inc. for the six-month periods ended June 30, 1997 and 1998, respectively, filed in connection with the Press Release dated July 27, 1998. 99A.7 Unaudited Combined Pro Forma Statements of Income of U S WEST, Inc. for the four quarters of 1997, the year ended December 31, 1997, and the first quarter of 1998. 99A.8 Unaudited Pro Forma Earnings Normalization Schedule of U S WEST, Inc. for the four quarters of 1997, the year ended December 31, 1997, and the first quarter of 1998, filed in connection with the Press Release dated July 27, 1998. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. U S WEST, Inc. (Formerly "USW-C, Inc.") By: /s/ Thomas O. McGimpsey ------------------------------------------- Thomas O. McGimpsey Assistant Secretary Dated: July 28, 1998 EX-99 2 EXHIBIT 99 - PRESS RELEASE U S WEST Investor Relations NEWS FLASH July 27, 1998 Note to investors: U S WEST (NYSE: USW) will hold a live teleconference call at 2:30 p.m. MDT (4:30 p.m. EDT) today to discuss second quarter, 1998 results. President and CEO, Sol Trujillo, will host the call. Those wishing to participate should call 1-800-946-0712 by the scheduled start time. It will be available for re-broadcast from 3:30 p.m. MDT today through 5 p.m. MDT on Wednesday, Aug. 5 by calling 1-888-821-9353. U S WEST POSTS EPS GROWTH OF 7 PERCENT IN SECOND QUARTER - Results driven by strong core telecommunications business, plus addition of Dex directory publishing - ENGLEWOOD, Colo. - U S WEST (NYSE: USW) today announced second quarter normalized, diluted earnings per share of $.76, up 7 percent from second quarter, 1997. These are the new U S WEST's first quarterly earnings since its June 12 split from MediaOne Group (NYSE: UMG). That transaction resulted in the transfer of U S WEST Dex, the company's directory publishing business, from MediaOne Group to U S WEST. [Note: Net income and EPS figures used in this release are pro-forma and include full-quarter and year-to-date, 1997 and 1998 impacts from the U S WEST Dex transaction.] Results were driven by strong revenue growth of nearly 8 percent. Adjusting for a $72 million out-of-period regulatory impact from second quarter, 1997, revenue growth would have been 5.2 percent. These improving revenue results show the early impacts from the company's new data and wireless growth businesses. "We're pleased with these results," said Sol Trujillo, president and CEO of U S WEST. "We're on plan and doing better than expectations. Local service revenues are very strong; the growth platforms we're building are performing well; productivity continues to improve; and our efforts to build our ATM and IP-centric networks are moving along nicely." Some key quarterly highlights included: o Local service revenue growth of 14.7 percent prior to adjustments. o Revenue growth from the company's data division, !NTERPRISE, of 42 percent for the quarter to $120 million from the same period in 1997. - more - U S WEST Second Quarter Earnings - Page 2 o Rollout of the company's first-in-the-nation, one-number Advanced PCS service in its fifth major market. The service is now available to 10 million POPs. o An improvement in revenue per sales representative per day of 42 percent and of revenue per order of 20 percent on the business sales channel. On the consumer side, revenue per sales representative per day was up 47 percent and revenue per order was up 13 percent. o We've more than doubled the number of ATM switches in our network. ATM provides advanced capabilities for carrying data traffic. o An increase of 14 percent in the total number of Frame Relay ports in service to 53,400. With its strategic ally, Intermedia Communications, U S WEST customers have access to the largest Frame Relay switching network in the country. The company achieved the EPS growth while absorbing significant costs related to expansion of new growth businesses, and expenses associated with mandated interconnection and number portability, and year 2000 expenses. U S WEST's healthy core business was boosted by a Caller ID campaign. This campaign, combined with a similar promotion during first quarter has helped increase net residential subscriber levels by nearly one million since second quarter, 1997. Additionally, the company filed for price cap regulation in Iowa during the quarter, and expects a commission ruling on its Minnesota filing soon. A similar plan is still pending in Colorado. If approved in these three states, a total of nine of the company's 14 states would be under price regulation. During the quarter, the company saw continuing impacts from competition in its local telephony business. It now has re-sold almost 171,000 lines to competitors. Results for the quarter were partially offset by previously announced one-time after-tax charges of $89 million related primarily to the split from MediaOne Group. EPS for the quarter was reported at $.59 including the impacts of these charges. Other second quarter highlights include: New Product Initiatives: o The company neared completion of the first phase of the wide-scale commercial deployment of its MegaBit high-speed digital subscriber line data services in 11 states and 31 cities throughout its region, including the Phoenix, Denver, Minneapolis/St. Paul, Salt Lake City and Seattle metro areas. In Oregon, the company plans to offer the service in five cities beginning in mid-August. - more - U S WEST Second Quarter Earnings - Page 3 o Rollout of the company's Advanced PCS service in two additional markets - Tucson, Ariz. (April 6) and Minneapolis (July 16) - bringing to 10 million (about 40 percent of the population in U S WEST's 14 states) the total number of POPs the company can reach with its one-number wireless service. In mid-July, U S WEST also introduced two new services to its PCS line to further integrate its wireless and wireline services. A new dialtone feature allows the phone to work just like a landline phone, and data mail allows subscribers to send or receive text messages similar to alphanumeric pagers. o The company signed up some 30,000 customers in its "Buyer's Advantage" program through its marketing alliance with Qwest. Though currently prohibited from expanding this base, this special long-distance plan enhanced the company's integrated customer-service portfolio. Additionally the company now has interstate long-distance filings in place in four states Montana, New Mexico, Nebraska and Wyoming. o In April, the company announced plans to roll out its VDSL video services in Phoenix by the end of the year. Volumes and Penetration: o More than 360,000 customers have signed up for the company's new "Custom Choice" package since its inception in February (200,000 alone in the second quarter). It generated approximately $3 million in incremental revenues during the quarter. Custom Choice combines U S WEST's most popular custom calling features into a discounted package, increasing penetration of these features. o Residential penetration levels at the end of the quarter for the company's most popular custom calling features continued to grow: Caller ID, 33 percent, Voice Messaging, 18 percent (industry leader) and Call Waiting, 36 percent. o The addition of 656,000 access lines (adjusted for the sales of selected rural exchanges) over the past 12 months for a normalized growth rate of 4.2 percent. On an adjusted basis, business access lines grew at 4.6 percent; residential access lines grew at 4.0 percent; and residential additional lines grew 24.6 percent, reaching a second-line penetration level of 15.0 percent. Special access services growth was 21.2 percent year-over-year. On a "voice-grade-equivalent" basis, access line growth was 9.3 percent. o On the small business side, the number of total access lines equipped with Centrex service increased by 56.3 percent year over year to nearly 1.3 million. - more - U S WEST Second Quarter Earnings - Page 4 Sales and Revenues: o Local service revenues continued at a strong growth clip, rising by 14.7 percent year over year (8.1 percent on an adjusted basis). Local service revenues on the consumer side were up 17.6 percent (almost 11 percent on an adjusted basis). o A revenue increase of 5.7 percent from Dex. o Revenue from U S WEST's data group, !NTERPRISE, grew 42 percent this quarter to $120 million. Part of this growth can be attributed to the successful launch of U S WEST's Internet access service, U S WEST.net. The product is now available in 42 cities, including: Albuquerque, N.M.; Denver; Minneapolis; Omaha, Neb.; Phoenix; Portland, Ore.; Salt Lake City; and Seattle with plans for 11 additional market introductions in the third quarter. o A 21.5 percent increase in private line and special access revenues, which totaled $245 million for the second 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. Costs and Margins: o Absorbed approximately $66 million in expenses and approximately $73 million in capital related to interconnection and number portability. o Absorbed $19 million in Year 2000 expenses during the quarter. U S WEST (NYSE: USW) provides a full range of telecommunications services - including wireline, wireless PCS, data networking, directory and information services - to more than 25 million customers nationally and in 14 western and midwestern states. More information about U S WEST can be found on the Internet at http://www.uswest.com. Safe Harbor statement: This document contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. For 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. ### Further information: Larry Thede, 303-896-3550; Rodney Miller, 303-896-3096; Hadley Evans, 303-896-5706. NOTE: This release and the financial statements will be available on the Internet after 11:30 a.m. (MDT) by accessing U S WEST's Internet site: www.uswest.com. EX-99 3 EXHIBIT 99A.1
COMBINED PRO FORMA STATEMENTS OF INCOME (1) U S WEST, INC. (UNAUDITED) Quarter Ended Six Months Ended June 30, % June 30, % In millions 1998 1997 Change 1998 1997 Change - - - ----------------------- ------- ------- -------------- ------- ------ OPERATING REVENUES Local service $1,369 $ 1,194 14.7 $2,719 $ 2,425 12.1 Interstate access 711 678 4.9 1,409 1,365 3.2 Intrastate access 202 200 1.0 408 400 2.0 Long-distance network 195 240 (18.8) 396 490 (19.2) Directory services 313 296 5.7 620 583 6.3 Other services 263 222 18.5 510 434 17.5 ---------------- ---------------- Total operating rev. 3,053 2,830 7.9 6,062 5,697 6.4 ---------------- ---------------- OPERATING EXPENSES Employee-related 1,069 971 10.1 2,075 1,897 9.4 Other operating 676 462 46.3 1,231 978 25.9 Taxes other than income taxes 89 102 (12.7) 190 214 (11.2) Depreciation & amort 535 539 (0.7) 1,067 1,075 (0.7) ---------------- ---------------- Total operating exp. 2,369 2,074 14.2 4,563 4,164 9.6 ---------------- ---------------- Operating income 684 756 (9.5) 1,499 1,533 (2.2) Interest expense 160 167 (4.2) 323 335 (3.6) Gains on sales of rural telephone exchanges - 29 - - 47 - Other expense 33 17 94.1 58 39 48.7 ---------------- ---------------- Income before income taxes 491 601 (18.3) 1,118 1,206 (7.3) Income tax provision 195 226 (13.7) 429 451 (4.9) ---------------- ---------------- PRO FORMA NET INCOME $ 296 $ 375 (21.1)$ 689 $ 755 (8.7) ================ ================
COMBINED PRO FORMA STATEMENTS OF INCOME, (1) U S WEST, INC. CONTINUED (UNAUDITED) Quarter Ended Six Months Ended In millions, except June 30, % June 30, % per share amounts 1998 1997 Change 1998 1997 Change - - - ----------------------- ------- ------- -------------- ------- ------ Pro forma basic average shares outstanding 501.5 498.9 0.5 501.4 498.3 0.6 ================ ================ Pro forma basic earnings per share: $ 0.59 $ 0.75 (21.3) $ 1.37 $ 1.52 (9.9) ================ ================ Pro forma diluted average shares outstanding 505.6 510.2 (0.9) 505.5 509.5 (0.8) ================ ================ Pro forma diluted earnings per share: $ 0.59 $ 0.74 (20.3)$ 1.36 $ 1.50 (9.3) ================ ================ (1) The separation of U S WEST, Inc. ("Old U S WEST") into two independent companies, U S WEST, Inc. ("New U S WEST") and MediaOne Group, Inc.,(the "Separation") occurred on June 12, 1998 (the "Separation Date"). The 1998 and 1997 pro forma results give effect to the Separation, including the assumption of indebtedness and the issuance of shares in connection with the Dex transaction, as if the Separation had been consummated as of the beginning of the periods indicated.
EX-99 4 EXHIIBT 99A.2
PRO FORMA EARNINGS NORMALIZATION SCHEDULE U S WEST, INC. (UNAUDITED) Quarter Ended Six Months Ended In millions, except June 30, % June 30, % per share amounts 1998 1997 Change 1998 1997 Change - - - ----------------------- ------- ------- -------------- ------- ------ NORMALIZED PRO FORMA INCOME: Reported pro forma net income $ 296 $ 375 (21.1) $ 689 $ 755 (8.7) Adjustments: Rural exchange sales - (18) - - (29) - Separation costs 68 - - 68 - - Asset impairment 21 - - 21 - - ---------------- ---------------- Normalized pro forma income $ 385 $ 357 7.8 $ 778 $ 726 7.2 ================ ================ NORMALIZED PRO FORMA BASIC EARNINGS PER SHARE: Reported pro forma basic earnings per share $ 0.59 $ 0.75 (21.3) $ 1.37 $ 1.52 (9.9) Adjustments: Rural exchange sales - (0.04) - - (0.06) - Separation costs 0.13 - - 0.13 - - Asset impairment 0.04 - - 0.04 - - ---------------- ---------------- Normalized pro forma basic earnings per share $ 0.77 #$ 0.72 # 6.9 $ 1.55 #$ 1.46 6.2 ================ ================ NORMALIZED PRO FORMA DILUTED EARNINGS PER SHARE: Reported pro forma diluted earnings per share $ 0.59 $ 0.74 (20.3) $ 1.36 $ 1.50 (9.3) Adjustments: Rural exchange sales - (0.04) - - (0.06) - Separation costs 0.13 - - 0.13 - - Asset impairment 0.04 - - 0.04 - - ---------------- ---------------- Normalized pro forma diluted earnings per share $ 0.76 $ 0.71 # 7.0 $ 1.54 #$ 1.44 6.9 ================ ================ # Amount does not foot due to rounding of the individual components.
EX-99 5 EXHIBIT 99A.3
SELECTED CONSOLIDATED DATA (UNAUDITED) U S WEST, INC. Quarter Ended Six Months Ended In millions, except June 30, % June 30, % per share amounts 1998 1997 Change 1998 1997 Change - - - ------------------- ------- ------- -------------- ------- ------ Normalized access lines (thousands): Business 4,891 4,678 4.6 4,891 4,678 4.6 Consumer 11,449 11,006 4.0 11,449 11,006 4.0 Total 16,340 15,684 4.2 16,340 15,684 4.2 Access lines (thousands): Business 4,884 4,678 4.4 4,884 4,678 4.4 Consumer 11,422 11,006 3.8 11,422 11,006 3.8 Total access lines 16,306 15,684 4.0 16,306 15,684 4.0 Billed access minutes of use (millions): Interstate 14,799 13,795 7.3 29,161 27,325 6.7 Intrastate 3,116 2,957 5.4 6,099 5,742 6.2 Total minutes of use 17,915 16,752 6.9 35,260 33,067 6.6 Employees: U S WEST, Inc. 53,535 50,513 6.0 53,535 50,513 6.0 Telephone operations only 45,497 44,469 2.3 45,497 44,469 2.3 Telephone empl per 10,000 access lines 27.9 28.4 (1.8) 27.9 28.4 (1.8) Dividends per common share (#1) $ 0.535$ 0.535 - $ 1.07$ 1.07 - Common shares outstanding (#1) 501.4 499.3 0.4 501.4 499.3 0.4 Capital expend $ 809 $ 523 54.7 $ 1,331 $ 932 42.8 EBITDA (#2) 1,219 1,295 (5.9) 2,566 2,608 (1.6) EBITDA margin 39.9% 45.8% - 42.3% 45.8% - Debt-to-capital ratio: Telephone operations only 56.4% 55.6%# - 56.4% 55.6%# - # As of December 31, 1997. # 1: Dividends per common share for the six month period of 1998 and for the three and six month periods of 1997, and common shares outstanding at June 30, 1997 are pro forma and assume the Separation had been consummated as of the indicated periods # 2: Earnings before interest, taxes, depreciation, amortization, and other (EBITDA). EBITDA also excludes gains on asset sales and is based on the combined pro forma financial results.
EX-99 6 EXHIBIT 99A.4
CONSOLIDATED STATEMENTS OF INCOME (1,2) U S WEST, INC. (UNAUDITED) Quarter Ended Six Months Ended June 30, % June 30, % In millions 1998 1997 Change 1998 1997 Change - - - ---------------------- --------------------- ------- ------- ------- OPERATING REVENUES Local service $1,369 $ 1,194 14.7 $ 2,719 $ 2,425 12.1 Interstate access 711 678 4.9 1,409 1,365 3.2 Intrastate access 202 200 1.0 408 400 2.0 Long-distance network 195 240 (18.8) 396 490 (19.2) Directory services 313 296 5.7 620 583 6.3 Other services 263 222 18.5 510 434 17.5 --------------- ---------------- Total operating rev. 3,053 2,830 7.9 6,062 5,697 6.4 --------------- ---------------- OPERATING EXPENSES Employee-related 1,069 971 10.1 2,075 1,897 9.4 Other operating 676 462 46.3 1,231 978 25.9 Taxes other than income taxes 89 102 (12.7) 190 214 (11.2) Depreciation & amort 535 539 (0.7) 1,067 1,075 (0.7) --------------- ---------------- Total operating exp. 2,369 2,074 14.2 4,563 4,164 9.6 --------------- ---------------- Operating income 684 756 (9.5) 1,499 1,533 (2.2) Interest expense 109 101 7.9 206 204 1.0 Gains on sales of rural telephone exchanges - 29 - - 47 - Other expense 33 17 94.1 58 39 48.7 --------------- ---------------- Income before income taxes 542 667 (18.7) 1,235 1,337 (7.6) Income tax provision 215 251 (14.3) 474 501 (5.4) --------------- ---------------- NET INCOME $ 327 $ 416 (21.4)$ 761 $ 836 (9.0) =============== ================ (1)The historical results prior to the Separation present unaudited historical financial information as if the businesses that comprise New U S WEST operated as a separate entity for the periods presented. The effects of the Separation, including the assumption of indebtedness and the issuance of shares in connection with the Dex transaction, have been included in the historical results as of the Separation Date. (2)The financial effects of the Separation and the Dex transaction are not fully reflected in the historical financial statements. Therefore, historical earnings per share is not presented as it is not meaningful. See pro forma basic and diluted earnings per share and pro forma average shares outstanding.
EX-99 7 EXHIBIT 99A.5
CONSOLIDATED BALANCE SHEETS U S WEST, Inc. (UNAUDITED) June 30, December 31, In millions 1998 1997 - - - -------------------------------------- ------------- -------------- ASSETS Current assets: Cash and cash equivalents $ 730 $ 27 Accounts and notes receivable 1,706 1,717 Inventories and supplies 213 150 Deferred directory costs 263 257 Deferred tax asset 217 271 Prepaid and other 87 82 ------------- -------------- Total current assets 3,216 2,504 ------------- -------------- Gross property, plant and equipment 34,565 33,651 Less accumulated depreciation 20,074 19,343 ------------- -------------- Property, plant and equipment - net 14,491 14,308 Other assets 890 855 ------------- -------------- Total assets $ 18,597 $ 17,667 ============= ============== LIABILITIES AND SHAREOWNERS' EQUITY Current liabilities: Short-term debt $ 2,753 $ 695 Accounts payable 1,187 1,377 Dividends payable 268 259 Other 1,782 1,868 ------------- -------------- Total current liabilities 5,990 4,199 ------------- -------------- Long-term debt 7,946 5,020 Postretirement and other postemployment benefit obligations 2,539 2,534 Deferred taxes, credits and other 1,642 1,547 Shareowners' equity 480 4,367 ------------- -------------- Total liabilities and shareowners' equity $ 18,597 $ 17,667 ============================
EX-99 8 EXHIBIT 99A.6
CONSOLIDATED STATEMENTS OF CASH FLOWS U S WEST, Inc. (UNAUDITED) Six Months Ended June 30, In millions 1998 1997 - - - ------------------------------------------------- -------- --------- OPERATING ACTIVITIES Net income $ 761 $ 836 Adjustments to net income: Depreciation and amortization 1,067 1,075 Gains on sales of rural telephone exchanges - (47) Deferred income taxes and amortization of investment tax credits 89 (10) Changes in operating assets and liabilities: Accounts receivable 11 22 Inventories, supplies and other current assets (88) (62) Accounts payable and accrued liabilities (76) 259 Other - net 88 95 - - - ------------------------------------------------- -------- --------- Cash provided by operating activities 1,852 2,168 - - - ------------------------------------------------- -------- --------- INVESTING ACTIVITIES Expenditures for property, plant and equipment (1,283) (849) Payment to MediaOne Group for the directory business (Dex) (3,829) - Proceeds from disposals of property, plant and equipment 34 4 Purchase of PCS licenses (18) - Proceeds from sales of rural telephone exchanges - 28 Other (34) - - - - ------------------------------------------------- -------- --------- Cash (used for) investing activities (5,130) (817) - - - ------------------------------------------------- -------- --------- FINANCING ACTIVITIES Net proceeds from (repayments of) short-term debt 2,060 (669) Net (repayments of) proceeds from issuance of Old U S WEST debt (198) 11 Proceeds from issuance of long-term debt 3,066 - Repayments of long-term debt (83) (86) Proceeds from issuance of common stock 23 38 Dividends paid on common stock (519) (475) Dividends paid to Old U S WEST (183) (161) Dividend paid to MediaOne Group (139) - Purchases of treasury stock (46) - - - - ------------------------------------------------- -------- --------- Cash provided by (used for) financing activities 3,981 (1,342) - - - ------------------------------------------------- -------- --------- CASH AND CASH EQUIVALENTS Increase 703 9 Beginning balance 27 80 - - - ------------------------------------------------- -------- --------- Ending balance $ 730 $ 89 ================================================= ======== =========
EX-99 9 EXHIBIT 99A.7
COMBINED PRO FORMA STATEMENTS OF INCOME U S WEST, INC. (UNAUDITED) ------------1997----------------1998 In millions Qtr 1 Qtr 2 Qtr 3 Qtr 4 Year Qtr 1 - - - ----------------------- -------------------------------------- OPERATING REVENUES Local service 1,231 1,194 1,314 1,277 5,016 1,350 Interstate access 687 678 663 638 2,666 698 Intrastate access 200 200 208 153 761 206 Long-distance network 250 240 231 164 885 201 Directory services 287 296 296 318 1,197 307 Other services 212 222 248 272 954 247 ------------------------------ ------ Total operating rev. 2,867 2,830 2,960 2,822 11,479 3,009 ------------------------------ ------ OPERATING EXPENSES Employee-related 926 971 1,018 1,038 3,953 1,006 Other operating 516 462 539 642 2,159 555 Taxes other than income taxes 112 102 106 108 428 101 Depreciation & amort 536 539 541 547 2,163 532 ------------------------------ ------ Total operating exp. 2,090 2,074 2,204 2,335 8,703 2,194 ------------------------------ ------ Operating income 777 756 756 487 2,776 815 Interest expense 168 167 165 167 667 163 Gain on sale of Bellcore - - - 53 53 - Gains on sales of rural telephone exchanges 18 29 30 - 77 - Other expense 22 17 12 21 72 25 ------------------------------ ------ Income before income taxes and extra- ordinary item 605 601 609 352 2,167 627 Income tax provision 225 226 226 125 802 234 ------------------------------ ------ PRO FORMA INCOME BEFORE EXTRAORDINARY ITEM 380 375 383 227 1,365 393 Extraordinary item - debt refinancing - - (3) - (3) - ------------------------------ ------ PRO FORMA NET INCOME 380 375 380 227 1,362 393 ============================== ======
COMBINED PRO FORMA STATEMENTS OF INCOME, (1) U S WEST, Inc. CONTINUED (UNAUDITED) In millions except per ------------1997----------------1998 share amounts Qtr 1 Qtr 2 Qtr 3 Qtr 4 Total Qtr 1 - - - ----------------------- ------------------------------------- ------ Pro forma basic average shares outstanding 497.7 498.9 499.6 500.2 499.1 501.3 ===================================== ====== Pro forma basic earnings per share before extraordinary item 0.76 0.75 0.77 0.45 2.73 0.78 Extraordinary item - - (0.01) - (0.01) - -------------------------------------- ------ Pro forma basic earnings per share 0.76 0.75 0.76 0.45 2.73 0.78 ====================================== ====== Pro forma diluted average shares outstanding 508.7 510.2 507.7 503.7 507.6 505.5 ====================================== ====== Pro forma diluted earnings per share before extraordinary item 0.75 0.74 0.76 0.45 2.71 0.78 Extraordinary item - - (0.01) - (0.01) - -------------------------------------- ------ Pro forma diluted earnings per share 0.75 0.74 0.75 0.45 2.70 0.78 ====================================== ====== Amounts may not foot due to rounding of individual components. (1) The separation of U S WEST, Inc. ("Old U S WEST") into two independent companies, U S WEST, Inc. ("New U S WEST") and MediaOne Group, Inc.,(the "Separation") occurred on June 12, 1998 (the "Separation Date"). The 1998 and 1997 pro forma results give effect to the Separation, including the assumption of indebtedness and the issuance of shares in connection with the Dex transaction, as if the Separation had been consummated as of the beginning of the periods indicated.
EX-99 10 EXHIBIT 99A.8
PRO FORMA EARNINGS NORMALIZATION SCHEDULE U S WEST, Inc. (UNAUDITED) Inmillions except per ------------1997---------------1998 share amounts Qtr 1 Qtr 2 Qtr 3 Qtr 4 Total Qtr 1 - - - ----------------------- -------------------------------------- ------ NORMALIZED PRO FORMA INCOME: Reported pro forma net income 380 375 380 227 1,362 393 Adjustments: Rural exchange sales (11) (18) (19) - (48) - Gain on Bellcore sale - - - (32) (32) - Early debt extinguishment - - 3 - 3 - --------------------------------------- ------ Normalized pro forma income 369 357 364 195 1,285 393 ======================================= ====== NORMALIZED BASIC PRO FORMA EARNINGS PER SHARE: Reported pro forma basic earnings per share 0.76 0.75 0.76 0.45 2.73 0.78 Adjustments: Rural exchange sales (0.02) (0.04) (0.04) - (0.10) - Gain on Bellcore sale - - - (0.06) (0.06) - Early debt extinguishment - - 0.01 - 0.01 - --------------------------------------- ------ Normalized pro forma basic earnings per share 0.74 0.72 0.73 0.39 2.57 0.78 ======================================= ====== NORMALIZED DILUTED PRO FORMA EARNINGS PER SHARE: Reported diluted pro forma earnings per share 0.75 0.74 0.75 0.45 2.70 0.78 Adjustments: Rural exchange sales (0.02) (0.04) (0.04) - (0.09) - Gain on Bellcore sale - - - (0.06) (0.06) - Early debt extinguishment - - 0.01 - 0.01 - --------------------------------------- ------ Normalized pro forma diluted earnings per share 0.73 0.71 0.72 0.39 2.55 0.78 ======================================= ======
Amounts may not foot due to rounding of individual components. -----END PRIVACY-ENHANCED MESSAGE-----