-----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, ARb7xYPwYY5X1kQCjbIw2iUxQqQs17z3xHcSOlHxO29ITax9+Y9zqJBlvLccYJRT f8udoXS8Xre8cuBymx9Z8Q== 0001054522-99-000024.txt : 19990423 0001054522-99-000024.hdr.sgml : 19990423 ACCESSION NUMBER: 0001054522-99-000024 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 19990331 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990422 FILER: COMPANY DATA: COMPANY CONFORMED NAME: U S WEST INC /DE/ CENTRAL INDEX KEY: 0001054522 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [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: 99598559 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 FORM 8-K RE: EARNINGS RELEASE ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): April 21, 1999 U S WEST, Inc. (Fomerly "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 April 21, 1999, U S WEST, Inc. released its second quarter earnings results. The release and financial statements are attached hereto as Exhibits. Item 7. Exhibits Exhibit Description 27 Financial Data Schedule 99 Press Release issued April 21, 1999 concerning the earnings results of U S WEST, Inc. for the first quarter of 1999. 99A.1 Unaudited Consolidated Statements of Income of U S WEST, Inc. for the quarters ended March 31, 1998 and 1999, respectively, filed in connection with the Press Release dated April 21, 1999. 99A.2 Unaudited Consolidated Balance Sheets of U S WEST, Inc. for the quarter ended March 31, 1999 and the year ended December 31, 1998, respectively, filed in connection with the Press Release dated April 21, 1999. 99A.3 Unaudited Consolidated Statements of Cash Flows of U S WEST, Inc. for the quarters ended March 31, 1998 and 1999, respectively, filed in connection with the Press Release dated April 21, 1999. 99A.4 Unaudited Selected Consolidated Data of U S WEST, Inc. for the quarters ended March 31, 1998 and 1999, respectively, filed in connection with the Press Release dated April 21, 1999. 99A.5 Unaudited New R-Line Format by Quarter of U S WEST, Inc. for 1996 - 1998, filed in connection with the Press Release dated April 21, 1999. 99A.6 New R-Line Format Definition of U S WEST, Inc. filed in connection with the Press Release dated April 21, 1999. 99A.7 Unaudited Old R-Line Format of U S WEST, Inc. for the quarters ended March 31, 1998 and 1999, respectively, filed in connection with the Press Release dated April 21, 1999. 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: April 21, 1999 EX-27 2 FDS --
5 0001054522 U S WEST, Inc. 1,000,000 3-MOS DEC-31-1999 JAN-01-1999 MAR-31-1999 36 0 1,700 0 236 2,536 36,031 20,933 18,709 4,849 8,642 0 0 0 920 18,709 3,182 3,182 0 0 2,389 0 153 639 242 397 0 0 0 397 .79 .78
EX-99 3 PRESS RELEASE EXHIBIT 99 U S WEST (REGISTERED TRADEMARK) INVESTOR RELATIONS April 21, 1999 - -------------------------------------------------------------------------------- Note to investors: U S WEST (NYSE: USW) will hold a live teleconference call at 9:00 a.m. MDT (11:00 a.m. EDT) today to discuss first quarter, 1999 results. Participants should call 1-888-569-5033 by the scheduled start time. A replay will be available starting at noon MDT, through 6 p.m. MDT on Wednesday, Apr. 28 by calling 1-888-203-1112 and entering confirmation number 652668. - -------------------------------------------------------------------------------- U S WEST Announces First Quarter Earnings Results -- PCS, DSL, Internet Access Products Achieving Strong Growth -- -- Accelerating Revenues, Slowing Expenses Expected to Yield Growth Through Remainder of Year -- DENVER - U S WEST (NYSE: USW) today announced first quarter diluted earnings per share of $.78, unchanged from pro forma first quarter 1998 earnings. Results were aided by overall revenue growth of 5.7 percent, better than the 5.0 percent normalized growth in fourth quarter, 1998. Capitalizing on the opportunity in the high-growth wireless and data markets, the company's quarterly results were offset by increased investment in these areas. Additional spending to increase the company's electronic sales capabilities and continue improving its infrastructure - spending which is expected to ease later in the year - also affected first-quarter earnings. "The continued strength in our revenues led to bottom-line results that met first quarter expectations," said Sol Trujillo, president and CEO. "However, our first quarter spending was well above last year. That was driven not only by our own growth and long-distance compliance initiatives, but also by the escalating costs for a customer base that has increasingly complex demands. For the year, we expect to achieve our full-year growth of around 10 percent, but it will be dependent on our ability to moderate the current cost trend and execute on certain investments and initiatives, including those we announced in February. "Meanwhile, our growth initiatives continue to show very strong results," he added. "Our wireless offering continues to increase penetration, our Internet access product is showing incredible growth, our industry-leading DSL data offering continues to perform well, and our electronic commerce effort is starting to build momentum." - more - U S WEST First Quarter Earnings - Page 2 Trujillo said the company drove strong quarterly revenue growth in several ways. U S WEST's data and wireless businesses posted strong subscriber growth gains for the quarter. U S WEST Dex, the company's directory and Internet Yellow Pages business, turned in very good quarterly results. Additionally, the core telephony business benefited from strength in its deployment of vertical services. o First quarter data revenues grew to nearly $380 million, up 31 percent over first quarter 1998. !NTERPRISE - which manages the company's in-region and out-of-region emerging data products, including digital subscriber line, Internet access, ATM and Frame Relay - grew revenues by 50 percent over first quarter 1998 to $173 million for the quarter. Customer levels for the company's Internet access service, uswest.net, grew by almost 50,000 to nearly 200,000. o Customers opting for the company's high-speed digital subscriber line (DSL) data product, MegaBit Services, grew by about 10,000 for the quarter and now total more than 30,000. U S WEST expects to have more than 100,000 DSL subscribers by year's end. o During the quarter, the company's Advanced PCS wireless product grew its customer base to nearly 220,000 - a gain of about 35,000 for the quarter in what is traditionally the slowest quarter of the year in the wireless business. On a weighted average basis, these customer levels now represent about 2 percent penetration. Average monthly revenue per subscriber remained at $54. Nearly 50 percent of all PCS customers continue to take advantage of Advanced PCS' first-in-the-nation integrated features. The company estimates it will have more than 370,000 subscribers by the end of 1999. o U S WEST Dex grew revenues at 6.5 percent compared to first quarter 1998, led by strong print directory results in Minneapolis and Phoenix. In addition, Dex accelerated its efforts in the Internet advertising and commerce arena, with sales of more than 6,000 Internet advertising items, such as web sites, links and banners. Dex's Internet Yellow Pages, the region's leading on-line directory, is attracting nearly 2 million visits per month, nearly three times the amount of usage compared with first quarter 1998. During the quarter, Dex also invested in Flycast, a leading Web advertising network, and signed long-term distribution agreements with Flycast and DoubleClick, another on-line advertising network. o Total "growth subscribers" (customers for the company's PCS, DSL and Internet access service) now total 450,000, up nearly 95,000 for the quarter -- a three-fold increase over first quarter 1998. Investment in these growth initiatives negatively impacted EPS by $0.16 for the quarter versus $0.08 for first quarter, 1998. This spending is expected to peak by third quarter 1999. o In the core telephony business, vertical services continued to show strength. The company added more than 300,000 Caller ID subscribers during the quarter. Residential Caller ID penetration is now at 35.7 percent. And more than 20,000 customers signed up for "No Solicitation," a recently introduced service that combats unwanted sales calls. - more - U S WEST First Quarter Earnings - Page 3 On the expense side, Trujillo said he believes the spending growth rate peaked during the first quarter and should slow later in the year as first quarter initiatives begin to take effect and infrastructure spending eases. The quarter's increased spending resulted primarily from: o additional spending for data, wireless and electronic commerce growth initiatives; o accelerated spending to create new electronic channel capabilities and infrastructure enhancements; o additional expenses related to mandates, such as year 2000 compliance and interconnection to enable the company more rapid entry into the long-distance market; o escalating network costs, including pro-active maintenance and delivery of increasingly complex products. During the quarter, the company saw continuing impacts from competition in its local telephony business in both line growth and pricing. It now has re-sold nearly 444,000 lines to competitors. It also opened five additional states to 1-plus pre-subscription for intraLATA toll calls. This contributed to the 14.7 percent decline in intraLATA toll revenues versus first quarter 1998. Other first quarter highlights include: Volumes and Penetration: o Residential subscriber levels at the end of the quarter for the company's most popular custom calling features continued to grow, with Voice Messaging now at 19.3 percent penetration (tops in the industry) and Call Waiting at 36.5 percent penetration. o Sales of the company's bundled "Custom Choice" package for residential customers surpassed 800,000 during the quarter. o The addition of 569,000 access lines over the past 12 months for a growth rate of 3.5 percent. On a "voice-grade-equivalent" basis, business access line growth was 15.8 percent. o On the small business side, total access lines equipped with Centrex 21 services grew to 450,000, an 89 percent year-over-year increase. Sales and Revenues: o A 16.7 percent increase compared with first quarter 1998 in private line and special access revenues, which totaled $279 million - a reflection of the company's growing data networking services business and its ability to successfully compete in one of the most highly competitive segments of the telecommunications market. o During the quarter, consumer revenues from vertical services increased by nearly 16 percent, compared to first quarter 1998. - more - U S WEST First Quarter Earnings - Page 4 o Frame Relay revenues increased by 29 percent quarter-over-quarter and ISDN revenues jumped by 62 percent quarter-over-quarter. Costs and Margins: o Absorbed approximately $85 million in incremental expenses related to interconnection, number portability and Year 2000 compliance during the quarter. To date, the company has spent $140 million on Y2K. It expects to spend another $80 during the balance of 1999. 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 these statements, we claim the safe harbor for "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Factors that could cause actual results to differ from expectations include: (i) greater than anticipated competition from new entrants into the local exchange, intraLATA toll, wireless, data and directories markets, causing loss of customers and increased price competition; (ii) changes in demand for U S WEST's products and services, including optional custom calling features; (iii) higher than anticipated employee levels, capital expenditures and operating expenses (such as costs associated with interconnection and year 2000 remediation); (iv) the loss of significant customers; (v) pending and future state and federal regulatory changes affecting the telecommunications industry, including changes that could have an impact on the competitive environment in the local exchange market; (vi) a change in economic conditions in the various markets served by U S WEST's operations; (vii) higher than anticipated start-up costs associated with new business opportunities; (viii) delays in U S WEST's ability to begin offering interLATA long-distance services; (ix) consumer acceptance of broadband services, including telephony, data and wireless services; and (x) delays in the development of anticipated technologies, or the failure of such technologies to perform according to expectations. These cautionary statements by U S WEST should not be construed as exhaustive or as any admission regarding the adequacy of disclosures made by U S WEST. U S WEST cannot always predict or determine after the fact what factors would cause actual results to differ materially from those indicated by the forward-looking statements or other statements. In addition, readers are urged to consider statements that include the terms "believes", "belief", "expects", "plans", "objectives", "anticipates", "intends", "targets", or the like to be uncertain and forward-looking. All cautionary statements should be read as being applicable to all forward-looking statements wherever they appear. U S WEST does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. - ### - Further information: Larry Thede, 303-896-3550; Rodney Miller, 303-896-3096; Martha Daniele Paine, 303-896-5706. NOTE: This release and the financial statements will be available on the Internet after 7 a.m. (MST) by accessing U S WEST's Internet site: www.uswest.com. EX-99 4 EXHIBIT 99A.1
CONSOLIDATED STATEMENTS OF INCOME (1) U S WEST, INC. (UNAUDITED) Quarter Ended In millions, except March 31, % per share amounts 1999 1998 Change - ------------------------------------ ------- ------- ------- OPERATING REVENUES Local service $1,867 $ 1,730 7.9 Exchange access 681 665 2.4 Long-distance services 174 204 (14.7) Directory services 326 306 6.5 Other services 134 104 28.8 ---------------- Total operating rev. 3,182 3,009 5.7 ---------------- OPERATING EXPENSES Employee-related 1,125 1,006 11.8 Other operating 662 656 0.9 Depreciation & amort 602 532 13.2 ---------------- Total operating exp. 2,389 2,194 8.9 ---------------- Operating income 793 815 (2.7) Interest expense 153 163 (6.1) Other expense 1 25 (96.0) ---------------- Income before income taxes 639 627 1.9 Income tax provision 242 234 3.4 ---------------- NET INCOME $ 397 $ 393 1.0 ================ Basic earnings per share $ 0.79 $ 0.78 1.3 ================ Basic average shares outstanding 503.3 501.3 0.4 ================ Diluted earnings per share $ 0.78 $ 0.78 - ================ Diluted average shares outstanding 508.1 505.5 0.5 ================ (1) The separation of U S WEST, Inc. into two independent companies, U S WEST, Inc. ("New U S WEST") and MediaOne Group, Inc.,(the "Separation") occurred on June 12, 1998. The results for the quarter ended March 31, 1998 give effect to the Separation as if the business that comprised New U S WEST operated as a separate entity for the entire period. Additionally, the results of operations include pro forma adjustments for the assumption of indebtedness and the issuance of shares in connection with the alignment of the directory business with New U S WEST, as if the Separation had been consummated as of the beginning of the period indicated.
EX-99 5 EXHIBIT 99A.2
CONSOLIDATED BALANCE SHEETS U S WEST, Inc. March 31, December 31, In millions 1999 1998 - -------------------------------------- ------------- -------------- ASSETS (Unaudited) Current assets: Cash and cash equivalents $ 36 $ 49 Accounts receivable, net 1,700 1,743 Inventories and supplies 236 197 Deferred directory costs 276 274 Deferred tax asset 161 151 Prepaid and other 127 78 ------------- -------------- Total current assets 2,536 2,492 Property, plant and equipment - net 15,098 14,908 Other assets - net 1,075 1,007 ------------- -------------- Total assets $ 18,709 $ 18,407 ============= ============== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term debt $ 1,393 $ 1,277 Accounts payable 1,326 1,347 Accrued expenses 1,753 1,702 Advanced billings and deposits 377 370 ------------- -------------- Total current liabilities 4,849 4,696 Long-term debt 8,642 8,642 Postretirement and other postemployment benefit obligations 2,632 2,643 Deferred taxes, credits and other 1,666 1,671 Stockholders' equity 920 755 ------------- -------------- Total liabilities and stockholders' equity $ 18,709 $ 18,407 ============================
EX-99 6 EXHIBIT 99A.3
CONSOLIDATED STATEMENTS OF CASH FLOWS U S WEST, Inc. (UNAUDITED) Quarter Ended March 31, In millions 1999 1998 - -------------------------------------------------- -------- -------- OPERATING ACTIVITIES Net income $ 397 $ 393 Adjustments to net income: Depreciation and amortization 602 532 Deferred income taxes and amortization of investment tax credits 14 40 Changes in operating assets and liabilities: Accounts receivable 43 101 Inventories, supplies and other current assets (109) (41) Accounts payable, accrued expense and advance billings 51 201 Other (61) (17) - -------------------------------------------------- -------- -------- Cash provided by operating activities 937 1,209 - -------------------------------------------------- -------- -------- INVESTING ACTIVITIES Expenditures for property, plant and equipment (753) (563) Proceeds from (payments on) disposals of property, plant and equipment (8) 19 Other (11) (18) - -------------------------------------------------- -------- -------- Cash used for investing activities (772) (562) - -------------------------------------------------- -------- -------- FINANCING ACTIVITIES Net proceeds from short-term debt 256 119 Net repayments of Old U S WEST debt - (44) Repayments of long-term debt (181) (23) Proceeds from issuance of common stock 16 17 Dividends paid on common stock (269) (259) Dividends paid to Old U S WEST - (90) Purchases of treasury stock - (21) - -------------------------------------------------- -------- -------- Cash used for financing activities (178) (301) - -------------------------------------------------- -------- -------- CASH AND CASH EQUIVALENTS Increase (decrease) (13) 346 Beginning balance 49 27 - -------------------------------------------------- -------- -------- Ending balance $ 36 $ 373 ================================================= ======== ========
EX-99 7 EXHIBIT 99A.4
SELECTED CONSOLIDATED DATA U S WEST, INC. (UNAUDITED) Quarter Ended Dollars in millions, except March 31, % per share amounts 1999 1998 Change Access lines (thousands): Business 4,972 4,839 2.9 Consumer 11,799 11,363 3.8 Total access lines 16,771 16,202 3.5 Minutes of use (millions): Interstate 15,305 14,362 6.6 Intrastate 3,139 2,983 5.2 Total minutes of use 18,444 17,345 6.3 Employees: U S WEST, Inc. 55,324 52,142 6.1 Telephone operations only 47,007 44,667 5.2 Telephone empl per 10,000 access lines 28.0 27.6 1.4 Dividends per common share $0.535$ 0.535 - Common shares outstanding (millions) (#1) 503.5 501.3 0.4 Capital expend $ 787 $ 522 50.8 EBITDA (#2) 1,395 1,347 3.6 EBITDA margin 43.8% 44.8% (2.2) Debt-to-capital ratio (#3) 57.4% 55.6% 3.2 # 1: Common shares outstanding at March 31, 1998 are pro forma, assuming the Separation had been consummated as of the date indicated. # 2: Earnings before interest, taxes, depreciation, amortization, and other expense (EBITDA). # 3: Telephone operations only.
EX-99 8 EXHIBIT 99A.5
NEW R-LINE FORMAT BY QUARTER FOR 1996-1998 U S WEST, INC. (UNAUDITED) 1998 revenues for the quarter ended In millions Mar 31, Jun 30, Sep 30, Dec 31, Total ------- ------- ------- ------- ------ OPERATING REVENUES Local services $1,730 $1,756 $1,805 $1,837 $7,128 Access services 665 671 660 673 2,669 Long-distance services 204 200 202 189 795 Directory services 306 310 313 339 1,268 Other services 104 116 132 166 518 ------- ------- ------- ------- ------ Total operating rev. $3,009 $3,053 $3,112 $3,204 $12,378 ======= ======= ======= ======= ====== 1997 revenues for the quarter ended In millions Mar 31, Jun 30, Sep 30, Dec 31, Total ------- ------- ------- ------- ------ OPERATING REVENUES Local services $1,530 $1,498 $1,639 $1,613 $6,280 Access services 701 689 669 586 2,645 Long-distance services 250 240 235 172 897 Directory services 286 294 295 315 1,190 Other services 100 109 122 136 467 ------- ------- ------- ------- ------ Total operating rev. $2,867 $2,830 $2,960 $2,822 $11,479 ======= ======= ======= ======= ====== 1996 revenues for the quarter ended In millions Mar 31, Jun 30, Sep 30, Dec 31, Total ------- ------- ------- ------- ------ OPERATING REVENUES Local services $1,423 $1,463 $1,493 $1,527 $5,906 Access services 631 634 617 667 2,549 Long-distance services 290 277 271 259 1,097 Directory services 263 271 268 286 1,088 Other services 122 126 134 146 528 ------- ------- ------- ------- ------ Total operating rev. $2,729 $2,771 $2,783 $2,885 $11,168 ======= ======= ======= ======= ======
EX-99 9 EXHIBIT 99A.6
NEW R-LINE FORMAT DEFINITION U S WEST, INC. Commencing with the first quarter of 1999, the revenue lines on the income statement have been recast to more accurately depict the point of origin of revenue by customer. The revenue lines now in use and the types of revenue contained in each revenue line are as follows: Local services revenue Access services Long-distance services - ----------------------- --------------- ---------------------- Basic local Interstate access Intralata long- telephone services distance services Vertical services Intrastate access Long-distance (caller ID, calling cards (1) call waiting, etc.) Wireless services (1) Directory services Other services ------------------ -------------- Carrier access line charge (2) Yellow page Unregulated products services sales Inside wire installation and maintenance (1) Billing and collection services Megabit services (2) Enhanced white pages directory listings (1) Public payphone services (1) (1) Previously included in Other Services. (2) Previously included in Interstate and Intrastate Access Services.
EX-99 10 EXHIBIT 99A.7
OLD R-LINE FORMAT (UNAUDITED) Quarter Ended March 31, % In millions 1999 1998 Change ----------- ---- ---- ------ OPERATING REVENUES Local services $1,413 $1,350 4.7 Interstate access 739 698 5.9 Intrastate access 197 206 (4.4) Long-distance network 171 201 (14.9) Directory services 329 307 7.2 Other services 333 247 34.8 ---- ---- ------ Total operating rev. $3,182 $3,009 5.7 ===== ===== ======
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