-----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, CfM6TLv/kOCyiim0cGM9IBRy6P+jdtnQtdNarXuLq9lP+3Vw6DqFmxj/Ul/Fk+c3 D3/DSTfGF7WxgLiubqLMdg== 0000732718-95-000021.txt : 19951031 0000732718-95-000021.hdr.sgml : 19951031 ACCESSION NUMBER: 0000732718-95-000021 CONFORMED SUBMISSION TYPE: 8-K CONFIRMING COPY: PUBLIC DOCUMENT COUNT: 16 CONFORMED PERIOD OF REPORT: 19951027 ITEM INFORMATION: Acquisition or disposition of assets FILED AS OF DATE: 19951030 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: US WEST INC CENTRAL INDEX KEY: 0000732718 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 840926774 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08611 FILM NUMBER: 00000000 BUSINESS ADDRESS: STREET 1: 7800 E ORCHARD RD STREET 2: SUITE 480 CITY: ENGLEWOOD STATE: CO ZIP: 80111 BUSINESS PHONE: 3037936629 MAIL ADDRESS: STREET 1: 7800 EAST ORCHARD ROAD STREET 2: SUITE 480 CITY: ENGLEWOOD STATE: CO ZIP: 80111 8-K 1 FORM 8-K THIS DOCUMENT IS A COPY OF THE FORM 8-K FILED ON OCTOBER 27, 1995 PURSUANT TO A RULE 201 TEMPORARY HARDSHIP EXEMPTION 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: October 27, 1995 U S WEST, Inc. A Delaware Commission File IRS Employer Corporation Number 1-8611 Identification No. 84-0926774 7800 East Orchard Road, Englewood, Colorado 80111 Telephone Number (303) 793-6500 Item 4. Changes in Registrant's Certifying Accountant In view of the expected implementation of the Company's targeted stock structure, the Company has determined, following a recommendation of the Audit Committee, that it will be more efficient and effective for the Company to have a single firm perform the auditing function for the entire business. This decision has resulted in a difficult choice between two highly qualified auditing firms. Until now, Coopers & Lybrand L.L.P. has served as the Company's independent auditor, and Arthur Andersen LLP has served as the primary auditing firm for major subsidiaries within the U S WEST Media Group. After careful consideration and review, the Company has determined that Arthur Andersen LLP will serve as the Company's independent auditor. For that reason, the Company has notified Coopers & Lybrand L.L.P. that the Company will no longer retain the firm as its independent auditor, effective upon the completion of the audit of the Company's financial statements for the fiscal year ending December 31, 1995. The Company maintains high regard for Coopers & Lybrand L.L.P. and is grateful for the work it has performed over the years. During the Company's two most recent fiscal years ended December 31, 1994 and December 31, 1993, the reports of Coopers & Lybrand L.L.P. on the Company's financial statements contained no adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles. During the Company's two most recent fiscal years ended December 31, 1994 and December 31, 1993, and interim periods thereafter: (1) No disagreements with Coopers & Lybrand L.L.P. have occurred on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Coopers & Lybrand L.L.P., would have caused it to make reference to the subject matter of the disagreement in connection with its reports on the Company's financial statements. (2) No reportable events involving Coopers & Lybrand L.L.P. have occurred that must be disclosed under Item 304(a)(1)(v) of Regulation S-K. (3) The Company has not consulted with Arthur Andersen LLP on items that concerned the application of accounting principles to a specific transaction, either completed or proposed, or on the type of audit opinion that might be rendered on the Company's financial statements. The Company requested, and Coopers & Lybrand L.L.P. has furnished, a letter addressed to the Securities and Exchange Commission stating that Coopers & Lybrand L.L.P. agrees with the statements set forth in the second paragraph above and in numbered paragraphs (1) and (2) above. A copy of that letter from Coopers & Lybrand L.L.P. to the Securities and Exchange Commission is filed as Exhibit 16 to this Form 8-K. Item 7. Exhibits
EXHIBIT NO. DESCRIPTION 4.1 Form of Note concerning the U S WEST Capital Funding, Inc. 6.31% Notes due November 1, 2005, unconditionally guaranteed as to payment of principal and interest by U S WEST, Inc. 4.2 Form of Distribution Agreement between U S WEST Capital Funding, Inc.; Merrill Lynch & Co.; Merrill Lynch, Pierce; Fenner & Smith Incorporated; Goldman, Sachs & Co.; Lehman Brothers; Lehman Brothers, Inc.; Morgan Stanley & Co. Incorporated and Salomon Brothers Inc, dated October 13, 1995. 4.3 Form of U S WEST Capital Funding, Inc. Fixed Rate Medium-Term Note. 4.4 Form of U S WEST Capital Funding, Inc. Floating Rate Medium-Term Note. 16 Letter from Coopers & Lybrand L.L.P. dated October 27, 1995. 27 Financial Data Schedule. 99A Press Release issued October 27, 1995 concerning the third quarter earnings results of U S WEST, Inc. (the "Company"). 99A.1 Unaudited Consolidated Statements of Income of the Company for quarters and nine months ended September 30, 1994 and September 30, 1995, filed in connection with the Press Release dated October 27, 1995. 99A.2 Unaudited Consolidated Balance Sheets of the Company for the year ended December 31, 1994 and nine months ended September 30, 1995, filed in connection with the Press Release dated October 27, 1995. 99A.3 Unaudited Consolidated Statements of Cash Flows of the Company for nine months ended September 30, 1994 and September 30, 1995, filed in connection with the Press Release dated October 27, 1995.
EXHIBIT NO. DESCRIPTION 99A.4 Unaudited Combined Statements of Income of U S WEST Communications Group for quarters and nine months ended September 30, 1994 and September 30, 1995, filed in connection with the Press Release dated October 27, 1995. 99A.5 Unaudited Selected Combined Group Data of U S WEST Communications Group for quarters and nine months ended September 30, 1994 and September 30, 1995, filed in connection with the Press Release dated October 27, 1995. 99A.6 Unaudited Combined Statements of Income of U S WEST Media Group for quarters and nine months ended September 30, 1994 and September 30, 1995, filed in connection with the Press Release dated October 27, 1995. 99A.7 Unaudited Selected Combined Group Data of U S WEST Media Group for quarters and nine months ended September 30, 1994 and September 30, 1995, filed in connection with the Press Release dated October 27, 1995. 99A.8 Unaudited Selected Proportionate Data of U S WEST Media Group for quarters ended September 30, 1994 and September 30, 1995 and year to date 1994 and 1995, filed in connection with the Press Release dated October 27, 1995.
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. U S WEST, Inc. /s/ STEPHEN E. BRILZ By:___________________________ Stephen E. Brilz Senior Attorney and Assistant Secretary Dated: October 27, 1995 EX-4 2 EXHIBIT 4.1 EXHIBIT 4.1 REGISTERED PRINCIPAL AMOUNT $ U S WEST CAPITAL FUNDING, INC. 6.31% NOTES DUE NOVEMBER 1, 2005 UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF PRINCIPAL AND INTEREST BY U S WEST, INC. CUSIP 912912AC6 Unless and until it is exchanged in whole or in part for Notes in definitive form, this Note may not be transferred except as a whole by the Depositary to a nominee of the Depositary, or by a nominee of the Depositary to the Depositary or another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such Depositary. Unless this certificate is presented by an authorized representative of The Depository Trust Company (55 Water Street, New York, New York) to the issuer or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, since the registered owner hereof, Cede & Co., has an interest herein. U S WEST Capital Funding, Inc., a corporation duly organized and existing under the laws of the State of Colorado (herein called the "Company") for value received hereby promises to pay Cede & Co. or registered assigns, the principal sum of $ ( Dollars) on November 1, 2005, by wire transfer of immediately available funds in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts and to pay interest semiannually on each May 1 and November 1 on said principal sum at the rate per annum specified in the title of this Note, in the same manner, in like coin or currency, from the first day of May or November, as the case may be, to which interest on this Note has been paid preceding the date hereof (unless the date hereof is a May 1 or November 1 to which interest has been paid, in which case from the date hereof, or unless the date hereof is prior to the first payment of interest, in which case from October 27, 1995) until payment of said principal sum has been made or duly provided for. Notwithstanding the foregoing, unless this Note shall be authenticated at a time when there is an existing default in the payment of interest on the Notes, if the date hereof is between April 15 and the immediately following May 1 or is between October 15 and the immediately following November 1, this Note shall bear interest from such May 1 or November 1; provided, however, that if the Company shall default in the payment of interest due on such May 1 or November 1, then this Note shall bear interest from the next preceding date to which interest has been paid or, if no interest has been paid on this Note, from October 27, 1995. The interest so payable on any May 1 or November 1 will, subject to certain exceptions provided in the Indenture referred to herein, be paid to the person in whose name this Note shall be registered at the close of business on the April 15 prior to such May 1 or the October 15 prior to such November 1 unless such April 15 or October 15 shall be a Legal Holiday (as defined in said Indenture), in which event the next preceding day that is not a Legal Holiday. Interest will be computed on the basis of a year of twelve 30-day months. This Note is one of the duly authorized issue of Notes of the Company, designated as set forth herein (the "Notes"), limited to the aggregate principal amount of $250,000,000, all issued or to be issued under and pursuant to an Indenture dated as of April 15, 1988 and amended by the Trust Indenture Reform Act of 1990 (herein referred to as the "Indenture"), duly executed and delivered by the Company and U S WEST, Inc. (the "Guarantor") to First National Bank of Santa Fe (formerly Banquest/First National Bank of Santa Fe), as Trustee (herein referred to as the "Trustee"), to which Indenture and all Indentures supplemental thereto reference is hereby made for a description of the rights, limitation of rights, obligations, duties and immunities thereunder of the Trustee, the Company, the Guarantor and the Holders (the words "Holders" or "Holder" meaning the registered holders or registered holder of the Notes). In case an Event of Default shall occur and be continuing, the principal hereof may be declared, and upon such declaration shall become due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture contains provisions permitting the Company, the Guarantor and the Trustee, with the written consent of the Holders of a majority in principal amount of the outstanding Securities of each series affected by a supplemental indenture (with each series voting as a class), to enter into a supplemental indenture to add any provisions to or to change or eliminate any provisions of the Indenture or of any supplemental indenture or to modify, in each case in any manner not covered by provisions in the Indenture relating to amendments and waivers without the consent of Holders, the rights of the Holders of each such series. The Holders of a majority in principal amount of the outstanding Securities of each series affected by such waiver (with each series voting as a class), by notice to the Trustee, may waive compliance by the Company or the Guarantor with any provision of the Indenture, any supplemental indenture or the Securities of any such series, except a Default in payment of the principal of or interest on any Security. However, without the consent of each Holder affected, an amendment or waiver may not: (1) reduce the amount of Securities whose Holders must consent to an amendment or waiver; (2) change the rate of or change the time for payment of interest on any Security; (3) change the principal of or change the fixed maturity of any Security; (4) waive a Default in the payment of the principal of or interest on any Security; (5) make any Security payable in money other than that stated in the Security; or (6) make any change in the provisions of the Indenture: (i) with respect to the right of the Holders of a majority in principal amount of any series of Securities, by notice to the Trustee, to waive an existing Default with respect to that series and its consequences; (ii) with respect to the right of any Holder of a Security to receive payment of principal of and interest on the Security, on or after the respective due dates expressed in the Security, the right of any Holder of a coupon to receive payment of interest due as provided in such coupon, or the right to bring suit for enforcement of any such payments on or after their respective dates; and (iii) described in this sentence. This Note is not redeemable prior to maturity, and is not entitled to a sinking fund. This Note is repayable, in whole or in part, at the option of the Holder hereof, on November 1, 2000 (the "Repayment Date"), at a price equal to the principal amount hereof to be repaid plus all accrued interest hereon to the Repayment Date. In order to exercise such repayment option, the Holder hereof must deliver to the Paying Agent, at the corporate trust office in the Borough of Manhattan in the City of New York, this Note, or such portion hereof, as to which an election to exercise the repayment option is being made, together with a duly signed and completed notice of election to have this Note, or such portion hereof repaid by the Company. This Note and such notice of election to exercise the repayment option must be delivered to the Paying Agent no earlier than September 1, 2000 and no later than October 1, 2000. Once made, an election to exercise the repayment option by the Holder hereof will be irrevocable. Such option may be exercised with respect to less than the entire principal amount hereof, but any such redemption in part will be in increments of $1,000 or any amount in excess thereof which is an integral multiple of $1,000. All determinations as to the validity, form, eligibility (including time of receipt) and acceptance of this Note for repayment will be determined by the Company, whose determination will be final and binding. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the place, at the respective times, at the rate, and in the coin or currency herein prescribed. No director, officer, employee or stockholder, as such, of the Company or the Guarantor shall have any liability for any obligations of the Company under this Note or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Holder, by accepting this Note, waives and releases all such liability. The waiver and release are part of the consideration for the issue of this Note and the Guarantee endorsed hereon. The laws of the State of New York shall govern the Indenture and this Note. Ownership of Notes shall be proved by the register for the Notes kept by the Registrar. The Company, the Guarantor, the Trustee and any agent of the Company may treat the person in whose name a Note is registered as the absolute owner thereof for all purposes. Terms used herein without definition that are defined in the Indenture shall have the meanings assigned to them in the Indenture. Unless the Certificate of Authentication hereon has been executed by the Trustee under the Indenture referred to herein by the manual signature of one of its authorized officers, or on behalf of the Trustee by the manual signature of an authorized officer of the Trustee's authenticating agent, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. _____________________________________________ GUARANTEE OF U S WEST, INC. FOR VALUE RECEIVED, U S WEST, Inc., a corporation duly organized and existing under the laws of the State of Colorado (the "Guarantor"), hereby unconditionally guarantees to the holder of the Note upon which this Guarantee is endorsed the due and punctual payment of the principal of and interest on said Note, when and as the same shall become due and payable, whether at maturity or otherwise, according to the terms thereof and of the Indenture referred to therein. The Guarantor agrees to determine, at least one business day prior to the date upon which a payment of principal of or interest on said Note is due and payable, whether U S WEST Capital Funding, Inc. (the "Company") has available the funds to make such payment as the same shall become due and payable. In case of the failure of the Company punctually to pay any such principal or interest, the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at maturity or otherwise, and as if such payment were made by the Company. The Guarantor hereby agrees that its obligations hereunder shall be unconditional, irrevocable and absolute, irrespective of the validity, regularity, or enforceability of said Note or said Indenture, the absence of any action to enforce the same, any waiver or consent by the holder of said Note with respect to any provisions thereof, the recovery of any judgment against the Company or any action to enforce the same, or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. The Guarantor hereby waives diligence, presentment, demand or payment, filing of claims with a court in the event of merger or bankruptcy of the Company, any right to require a proceeding first against the Company, protest or notice with respect to said Note or indebtedness evidenced thereby and all demands whatsoever and covenants that this Guarantee will not be discharged except by complete performance of the obligations contained in said Note and in this Guarantee. The Guarantor shall be subrogated to all rights of the holder of said Note against the Company in respect of any amounts paid by the Guarantor pursuant to the provisions of this Guarantee; provided, however, that the Guarantor shall not, without the consent of the holders of all of the Notes then outstanding, be entitled to enforce or to receive any payments arising out of, or based upon, such right of subrogation until the principal of and interest of all Notes of the Company known as "6.31% Notes Due November 1, 2005" shall have been paid in full or payment thereof shall have been provided for in accordance with said Indenture. Notwithstanding anything to the contrary contained herein, if following any payment of principal or interest by the Company on the Notes to the holders of the Notes, it is determined by a final decision of a court of competent jurisdiction that such payment shall be avoided by a trustee in bankruptcy (including any debtor-in-possession) as a preference under 11 U.S.C. 547 and such payment is paid by such holder to such trustee in bankruptcy, then and to the extent of such repayment the obligations of the Guarantor hereunder shall remain in full force and effect. This Guarantee shall not be valid or become obligatory for any purpose with respect to a Note until the certificate of authentication of such Note shall have been signed by the Trustee or on its behalf by the Trustee's authenticating agent. This Guarantee shall be governed by the laws of the State of New York. IN WITNESS WHEREOF, U S WEST, Inc. has caused this Guarantee to be signed in its corporate name by the signature of two of its officers thereunto duly authorized and has caused its corporate seal to be affixed hereunto. U S WEST, Inc. By:______________________________ Charles J. Burdick Vice President and Assistant Treasurer By:______________________________ Stephen E. Brilz Assistant Secretary (SEAL) ________________________________________________________ IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed, manually or by facsimile, and its corporate seal or a facsimile of its corporate seal to be imprinted hereon. Dated: October 27, 1995 U S WEST Capital Funding, Inc. By:_____________________________ Charles J. Burdick Vice President and Treasurer (SEAL) By:_____________________________ J. Roger Fox Assistant Treasurer CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated herein, issued under the Indenture described herein. FIRST NATIONAL BANK OF SANTA FE By Citibank, N.A., as Authenticating Agent By:_________________________________ Authorized Officer FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto __________________________________________ Please insert social security number or other identifying number of assignee: _______________________________ Please print or type name and address (including zip code) of assignee: ___________________________________ ___________________________________ ___________________________________ ___________________________________ the within Note and all rights thereunder, hereby irrevocably constituting and appointing _______________________ attorney to transfer said Note of U S WEST Capital Funding, Inc. on the books of the Company, with full power of substitution in the premises. ___________________________________ Dated:_____________________________ NOTICE: The signature to this assignment must correspond with the name as written upon the face of this Note in every particular without alteration or enlargement or any change whatever. NOTICE OF ELECTION The undersigned hereby irrevocably request(s) and instruct(s) the Company to repay this Note (or portion hereof specified below) pursuant to its terms at a price equal to the principal amount to be repaid, together with unpaid interest accrued hereon to the Repayment Date, to the undersigned, at __________________________________________________________ (Please print or typewrite name and address of the undersigned). For this Note to be repaid, the Paying Agent must receive at its corporate trust office, no earlier than September 1, 2000 and no later than October 1, 2000, this Note with this "Notice of Election" form duly completed. If less than the entire principal amount of this Note is to be repaid, specify the portion hereof (which shall be increments of $1,000) which the Holder elects to have repaid and specify the denomination or denominations (which shall be in increments of $1,000 or any amount in excess thereof which is an integral multiple of $1,000) of the Notes to be issued to the Holder for the portion of this Note not being repaid (in the absence of any such specification, one such Note will be issued for the portion not being repaid). Principal Amount to be Repaid: ______________________ Date: ______________________________ ___________________________________ Notice: The signature on this Notice of Election must correspond with the name as written upon the face of this Note in every particular without alteration or enlargement or any change whatever. EX-4 3 EXHIBIT 4.2 (..continued) 10 EXHIBIT 4.2 U S WEST CAPITAL FUNDING, INC. MEDIUM-TERM NOTES DUE NINE MONTHS OR MORE FROM DATE OF ISSUE DISTRIBUTION AGREEMENT October 13, 1995 MERRILL LYNCH & CO. Merrill Lynch, Pierce, Fenner & Smith Incorporated World Financial Center North Tower, 10th Floor New York, New York 10281_1310 GOLDMAN, SACHS & CO. 85 Broad Street New York, New York 10004 LEHMAN BROTHERS Lehman Brothers Inc. 3 World Financial Center, 12th Floor New York, New York 10285-1200 MORGAN STANLEY & CO. INCORPORATED 1585 Broadway New York, New York 10036 SALOMON BROTHERS INC Seven World Trade Center New York, New York 10048 Dear Sirs: U S WEST Capital Funding, Inc., a Colorado corporation (the "Company"), confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co., Lehman Brothers, Lehman Brothers Inc., Morgan Stanley & Co. Incorporated and Salomon Brothers Inc (each, an "Agent", and collectively, the "Agents") with respect to the issue and sale by the Company of its Medium-Term Notes Due Nine Months or More from Date of Issue (the "Notes"). The Notes are to be issued pursuant to an indenture, dated as of April 15, 1988, as amended, supplemented or modified from time to time (the "Indenture"), among the Company, U S WEST, Inc., a Colorado corporation ("U S WEST"), and First National Bank of Santa Fe, as trustee (the "Trustee"). The Notes will be unconditionally guaranteed as to payment of principal, premium, if any, and interest by U S WEST. As of the date hereof, the Company has authorized the issuance and sale of up to U.S. $500,000,000 aggregate initial offering price (or its equivalent, based upon the applicable exchange rate at the time of issuance, in such foreign or composite currencies as the Company shall designate at the time of issuance) of Notes to or through the Agents pursuant to the terms of this Agreement. It is understood, however, that the Company may from time to time authorize the issuance of additional Notes and that such additional Notes may be sold to or through the Agents pursuant to the terms of this Agreement, all as though the issu-ance of such Notes were authorized as of the date hereof. The Notes will have the benefit of a Guarantee (the "Guarantees") between the Company and U S WEST. This Agreement provides both for the sale of Notes by the Company to one or more Agents as principal for resale to investors and other purchasers and for the sale of Notes by the Company directly to investors (as may from time to time be agreed to by the Company and the applicable Agent), in which case such Agent will act as an agent of the Company in soliciting purchases of the Notes. The Company and U S WEST have filed with the Securities and Exchange Commission (the "SEC") a joint registration statement on Form S-3 (Registration Nos. 33-50049, 33-50049-01, 33-19226 and 33-19226-01) for the registration of debt securities, including the Notes, under the Securities Act of 1933, as amended (the "1933 Act"), and the offering thereof from time to time in accordance with Rule 415 of the rules and regulations of the SEC under the 1933 Act (the "1933 Act Regulations"). Such registra-tion statement has been declared effective by the SEC and the Indenture has been qualified under the Trust Indenture Act of 1939, as amended (the "1939 Act"). Such registration statement (and any further registration statements which may be filed by the Company and U S WEST for the purpose of registering additional Notes and in connection with which this Agreement is included or incorporated by reference as an exhibit) and the prospectus constituting a part thereof, and any prospectus supplement and pricing supplement relating to the Notes, including all documents incorporated therein by reference, as from time to time amended or supplemented by the filing of documents pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act"), or the 1933 Act or otherwise, are referred to herein as the "Registration Statement" and the "Prospectus," respectively, except that if any revised prospectus shall be provided to the Agents by the Company for use in connection with the offering of the Notes, whether or not such revised prospectus is required to be filed by the Company pursuant to Rule 424(b) of the 1933 Act Regulations, the term "Prospectus" shall refer to such revised prospectus from and after the time it is first provided to the Agents for such use. ECTION Appointment as Agent. 2. ECTION Appointment. Subject to the terms and conditions stated herein and subject to the reservation by the Company of the right to sell Notes directly on its own behalf, the Company hereby agrees that Notes will be sold exclusively to or through the Agents. The Company agrees that it will not, without the consent of all such Agents, solicit any other agents to purchase Notes or appoint any other agents to act on its behalf, or to assist it, in the placement of the Notes; provided, however, the Company expressly reserves the right to enter into an agreement or agreements substantially identical hereto, upon notice to the Agents, with such other agent or agents as may approach the Company from time to time for purposes of selling Notes with specific terms to or through such agent or agents. Sale of Notes. The Company shall not sell or approve the solicitation of purchases of Notes in excess of the amount which shall be authorized by the Company from time to time or in excess of the aggregate initial offering price of Notes registered pursuant to the Registration Statement. The Agents shall have no responsibility for maintaining records with respect to the aggregate initial offering price of Notes sold, or of otherwise monitoring the availability of Notes for sale, under the Registration Statement. Purchases as Principal. The Agents shall not have any obligation to purchase Notes from the Company as principal, but one or more Agents may agree from time to time to purchase Notes as principal for resale to investors and other purchasers determined by such Agent or Agents. Any such purchase of Notes by an Agent as principal shall be made in accordance with Section 3(a) hereof. Solicitations as Agent. If agreed upon by an Agent and the Company, such Agent, acting solely as agent for the Company and not as principal, will solicit purchases of the Notes. Such Agent will communicate to the Com-pany, orally, each offer to purchase Notes solicited by it on an agency basis, other than those offers rejected by such Agent. Such Agent shall have the right, in its discretion reasonably exercised, to reject any proposed purchase of Notes, as a whole or in part, and any such rejection shall not be deemed a breach of its agreement contained herein. The Company may accept or reject any proposed purchase of Notes, in whole or in part. Such Agent shall make reasonable efforts to assist the Company in obtaining performance by each purchaser whose offer to purchase Notes has been solicited by it and accepted by the Company. Such Agent shall not have any liability to the Company in the event that any such purchase is not consummated for any reason. If the Company shall default on its obligation to deliver Notes to a purchaser whose offer it has accepted, the Company shall (i) hold such Agent harmless against any loss, claim or damage arising from or as a result of such default by the Company and (ii) notwithstanding such default, pay to such Agent any commission to which it would otherwise be entitled. Reliance. The Company and the Agents agree that any Notes purchased by one or more Agents as principal shall be purchased, and any Notes the placement of which an Agent arranges as agent shall be placed by such Agent, in reliance on the representations, warranties, covenants and agreements of the Company and U S WEST contained herein and on the terms and conditions and in the manner provided herein. ECTION Representations and Warranties. The Company and U S WEST, jointly and severally, represent and warrant to the Agents as of the date hereof, as of the date of each acceptance by the Company of an offer for the purchase of Notes (whether to one or more Agents as principal or through an Agent as agent), and as of the date of each delivery of Notes (whether to one or more Agents as principal or through an Agent as agent) (the date of each such delivery to one or more Agents as prin-cipal being hereafter referred to as a "Settlement Date") (each of the times referenced above being referred to herein as a "Representation Date"), as follows: The Registration Statement, including a prospectus relating to the debt securities of the Company, has been filed with the SEC and has become effective. On the effective date of the Registration Statement, the Registration Statement and the Prospectus (including the documents incorporated by reference therein) conformed in all respects to the requirements of the 1933 Act, the 1939 Act, and the 1933 Act Regulations and did not include any untrue statements of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and as of each applicable Representation Date, the Registration Statement and the Prospectus will conform in all respects to the requirements of the 1933 Act, the 1939 Act and the 1933 Act Regulations and neither of such documents will include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that the foregoing does not apply to statements in or omissions from any such documents based upon written information furnished to the Company by the Agents specifically for use therein or based upon the Statement of Eligibility of the Trustee under the Indenture or to statements in or omissions from such Statement of Eligibility. Additional Certifications. Any certificate signed by any director or officer of the Company or U S WEST and delivered to one or more Agents or to counsel for the Agents in connection with an offering of Notes to one or more Agents as principal or through an Agent as agent shall be deemed a representation and warranty by the Company or U S WEST, as the case may be, to such Agent or Agents as to the matters covered thereby on the date of such certificate and at each Representation Date subsequent thereto. ECTION Purchases as Principal; Solicitations as Agent. Purchases as Principal. Unless otherwise agreed by an Agent and the Com-pany, Notes shall be purchased by such Agent as principal. Such purchases shall be made in accordance with terms agreed upon by one or more Agents and the Company (which terms, unless otherwise agreed, shall, to the extent applicable, include those terms specified in Exhibit A hereto and be agreed upon orally, with written confirmation prepared by such Agent or Agents and mailed to the Company). An Agent's commit-ment to purchase Notes as principal shall be deemed to have been made on the basis of the representations and warranties of the Company and U S WEST herein contained and shall be subject to the terms and conditions herein set forth. Unless the context otherwise requires, references herein to "this Agreement" shall include the agreement of one or more Agents to purchase Notes from the Company as principal. Each purchase of Notes, unless otherwise agreed, shall be at a discount from the principal amount of each such Note equivalent to the applicable commission set forth in Schedule A hereto for a Note of identical maturity. The Agents may engage the services of any other broker or dealer in connection with the resale of the Notes purchased by them as principal and may allow any portion of the discount received in connection with such purchases from the Company to such brokers and dealers. At the time of each purchase of Notes by one or more Agents as principal, such Agent or Agents shall specify the requirements for the stand-off agreement, officers' certifi-cates, opinions of counsel and comfort letter pursuant to Sections 4(h), 8(b), 8(c) and 8(d) hereof. Solicitations as Agent. On the basis of the representations and warranties herein contained, but subject to the terms and conditions herein set forth, when agreed by the Company and an Agent, such Agent, as an agent of the Company, will use its reasonable efforts to solicit offers to purchase the Notes upon the terms and conditions set forth herein and in the Prospectus. The Agents are not authorized to appoint sub-agents with respect to Notes sold through them as agent. All Notes sold through an Agent as agent will be sold at 100% of their principal amount unless otherwise agreed to by the Company and such Agent. The Company reserves the right, in its sole discretion, to suspend solicitation of purchases of the Notes through an Agent, as agent, commencing at any time for any period of time or permanently. As soon as practicable after receipt of instructions from the Company, such Agent will suspend solicitation of purchases from the Company until such time as the Company has advised such Agent that such solicita-tion may be resumed. The Company agrees to pay each Agent a commission, in the form of a discount, equal to the applicable percentage of the principal amount of each Note sold by the Company as a result of a solicitation made by such Agent as set forth in Schedule A hereto. Administrative Procedures. The purchase price, interest rate or formula, maturity date and other terms of the Notes (as applicable) specified in Exhibit A hereto shall be agreed upon by the Company and the applicable Agent or Agents and specified in a pricing supplement to the Prospectus (each, a "Pricing Supplement") to be prepared in connection with each sale of Notes. Except as may be otherwise specified in the applicable Pricing Supplement, the Notes will be issued in denominations of U.S. $1,000 or any larger amount that is an integral multiple of U.S. $1,000. Administrative procedures with respect to the sale of Notes shall be agreed upon from time to time by the Company, U S WEST, the Agents and Citibank, N.A., as authenticating and paying agent (the "Procedures"). The Agents, the Company and U S WEST agree to perform, and the Company agrees to cause Citibank, N.A. to agree to perform, their respective duties and obligations specifically provided to be performed by them in the Procedures. ECTION Covenants of the Company and U S WEST. The Company and U S WEST covenant with the Agents as follows: Copies of the Registration Statement. The Company and U S WEST will furnish to counsel for the Agents one signed copy of the Registration Statement, including all exhibits, relating to the Notes in the form it became effective and of all amendments thereto and will furnish to the Agents copies of the Registration Statement, including all exhibits, in the form it became effective and of all amendments thereto. Notice of Certain Proposed Filings and Certain Events. The Company and U S WEST will advise the Agents promptly of any amendment or supplementation of the Registration Statement or the Prospectus and will not effect such amendment or supplementation without the consent of counsel for the Agents; the Company and U S WEST will also advise the Agents of any official request made by the SEC for an amendment to the Registration Statement or Prospectus or for additional information with respect thereto and of the institution by the SEC of any stop order proceedings in respect of the Registration Statement, and will use their best efforts to prevent the issuance of any such stop order and to obtain as soon as possible its lifting, if issued. The Company and U S WEST will not file any document pursuant to the 1934 Act which is deemed to be incorporated by reference in the Prospectus unless counsel to the Agents shall have been previously advised thereof. Revisions of Prospectus -- Material Changes. If, at any time when a prospectus relating to the Notes is required to be delivered under the 1933 Act, any event occurs as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact, or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend or supplement the Registration Statement or the Prospectus to comply with the 1933 Act, the Company and U S WEST will immediately notify the Agents to cease the solicitation of offers to purchase the Notes in their capacity as Agent and to cease sales of any Notes the Agents may then own as principal, and the Company and U S WEST promptly will prepare and file with the SEC an amendment or supplement which will correct such untrue statement or omission or effect such compliance. Earnings Statements. U S WEST and, to the extent separately required pursuant to Rule 158 under the Act, the Company will make generally available to their security holders as soon as practicable, but not later than ninety days after the close of the period covered thereby, earning statements (in form complying with the provisions of Rule 158) covering a twelve month period beginning not later than the first day of the fiscal quarter of U S WEST and the Company next following the effective date of the Registration Statement (as defined in Rule 158) with respect to each sale of Notes. Copies of the Prospectus. The Company and U S WEST will furnish to the Agents copies of the Prospectus and all amendments and supplements thereto, in each case as soon as available and in such quantities as are reasonably requested. Blue Sky Qualifications. The Company and U S WEST will use their respective best efforts to arrange for the qualification of the Notes for sale and the determination of their eligibility for investment under the laws of such jurisdictions as the Agents designate and will continue such qualifications in effect so long as required for their distribution. Copies of Public Reports. The Company and U S WEST will furnish to the Agents, at the earliest time the Company and U S WEST make the same available to others, a copy of their annual reports and other financial reports furnished or made available to the public generally. Stand-Off Agreement. If specified by the applicable Agent or Agents in connection with a purchase of Notes as principal, neither the Company nor U S WEST will, without such Agents prior consent, between the date of any agreement to purchase such Notes and the Settlement Date with respect to such purchase, offer to sell any debt securities of the Company or U S WEST having a maturity of more than one year, except as may otherwise be provided in any such agreement. Prospectus Revisions -- Periodic Financial Information. Except as otherwise provided in subsection (k) of this Section, on or prior to the date on which there shall be released to the general public interim financial statement information related to the Company or U S WEST with respect to any of the first three quarters of any fiscal year or preliminary financial statement information with respect to any fiscal year, the Company and U S WEST shall furnish such information to the Agents, confirmed in writing, and shall cause the Prospectus to be amended or supplemented to include or incorporate by reference capsule financial information with respect to the results of operations of the Company or U S WEST, as the case may be, for the period between the end of the preceding fiscal year and the end of such quarter or for such fiscal year, as the case may be, and corresponding information for the comparable period of the preceding fiscal year, as well as such other information and explanations as shall be necessary for an understanding of such amounts, or as shall be required by the 1933 Act or the 1933 Act Regulations. Prospectus Revisions -- Audited Financial Information. Except as otherwise provided in subsection (k) of this Section, on or prior to the date on which there shall be released to the general public financial information included in or derived from the audited financial statements of the Company or U S WEST for the preceding fiscal year, the Company and U S WEST shall cause the Registration Statement and the Prospectus to be amended, whether by the filing of documents or otherwise, to include or incorporate by reference such audited financial statements and the report or reports, and consent or consents to such inclusion or incorporation by reference, of the independent accountants with respect thereto, as well as such other information and explanations as shall be necessary for an understanding of such financial statements, or as shall be required by the 1933 Act or the 1933 Act Regulations. Suspension of Certain Obligations. The Company and U S WEST shall not be required to comply with the provisions of subsections (i) or (j) of this Section during any period from the time (i) the Agents shall have suspended solicitation of purchases of the Notes in their capacities as agents pursuant to a request from the Company and (ii) no Agent shall then hold any Notes purchased as principal pursuant hereto, until the time the Company shall determine that solicitation of purchases of the Notes should be resumed or an Agent shall subsequently purchase Notes from the Company as principal. ECTION Conditions of Agents' Obligations. The obligations of the Agents to purchase Notes as principal and to solicit offers to purchase the Notes as agent of the Company, and the obligations of any purchasers of the Notes sold through an Agent as agent, will be subject to the accuracy of the representations and warranties on the part of the Company and U S WEST herein and to the accuracy of the statements of the officers of the Company and U S WEST made in any certificate furnished pursuant to the provisions hereof, to the performance and observance by the Company and U S WEST of all covenants and agreements herein contained on their respective parts to be performed and observed and to the following additional condi-tions precedent: Compliance with the 1933 Act and the 1939 Act. On the date hereof, the Indenture shall be qualified under the 1939 Act and no stop order suspending the effectiveness of the Registration Statement, as amended from time to time, shall be in effect, no proceedings for that purpose shall have been instituted or, to the knowledge of the Company, U S WEST, or the Agents, shall be contemplated by the SEC. Legal Opinions. On the date hereof, the Agents shall have received the following legal opinions, dated as of the date hereof and in form and substance satisfactory to the Agents: Opinion of Counsel to the Company and U S WEST. The favorable opinion of Stephen E. Brilz, counsel to the Company and U S WEST, or other counsel satisfactory to the Agents, to the effect that: The Company is a corporation in good standing, duly incorporated and validly existing under the laws of the State of Colorado, and is authorized by its Articles of Incorporation to transact the business in which it is engaged, as set forth in the Prospectus; U S WEST is a corporation in good standing, duly incorporated and validly existing under the laws of the state of its incorporation, and is authorized by its Articles or Certificate of Incorporation to transact the business in which it is engaged, as set forth in the Prospectus; The execution, delivery and performance of the Indenture by the Company and U S WEST have been duly authorized by all necessary corporate action on the part of the Company and U S WEST; the Indenture has been duly and validly executed and delivered by the Company and U S WEST and (assuming due authorization, execution and delivery by the Trustee) constitutes the legal, valid, and binding agreement of the Company and U S WEST enforceable against each of them in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting enforcement of creditors' rights or by general equitable principles; and the Indenture has been duly qualified under the 1939 Act; The Notes, when duly executed and authenticated pursuant to the Indenture and delivered in accordance with the provisions of this Agreement, will constitute legal, valid, and binding obligations of the Company enforceable against the Company in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting enforcement of creditors' rights or by general equitable principles; The execution, delivery and performance of this Agreement by the Company and U S WEST have been duly authorized by all necessary corporate action on the part of the Company and U S WEST, and this Agreement has been duly and validly executed and delivered by each of the Company and U S WEST; All federal and state regulatory consents, approvals, authorizations, or other orders (except as to state securities or "blue sky" laws, as to which such counsel need express no opinion) legally required for the execution by the Company and U S WEST of the Indenture, and the issuance and sale of the Notes and the Guarantees pursuant to the terms of this Agreement, have been obtained; Except as to financial statements and schedules contained therein, which such opinion need not pass upon, the Registration Statement (including the Prospectus) complies, and at the time it became effective complied, as to form in all material respects with the requirements of the 1933 Act and the applicable instructions, rules and regulations of the SEC thereunder; The Guarantees, when duly executed pursuant to the Indenture and delivered in accordance with the provisions of this Agreement, will constitute legal, valid, and binding obligations of U S WEST, as guarantor, enforceable against U S WEST in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting enforcement of creditors' rights or by general equitable principles; ( The Registration Statement is effective under the 1933 Act and, to the best of such counsel's knowledge and information, no stop order suspending the effectiveness of the Registration Statement has been issued under the 1933 Act or proceedings therefor initiated or threatened by the SEC; and The enforceability and legal, valid, and binding nature of the agreements and obligations of the Company and U S WEST set forth in the Indenture, the Guarantees, the Notes and this Agreement (the "Agreements") are not affected by, and the performance of the obligations set forth in such Agreements, the issuance and sale of the Notes and the Guarantees and the consummation of the transactions contemplated in such Agreements are not prevented or restricted by, any action, suit, proceeding, order, or ruling relating to, or issued or arising as a result of, the Divestiture (as hereinafter defined). In rendering such opinion, such counsel may rely (i) as to matters of New York law upon the opinion referred to in Section 5(b)(2) hereof without independent verification; and (ii) as to matters of fact, to the extent such counsel deems proper, on certificates of responsible officers of the Company, U S WEST, and public officials. In addition, such counsel shall state that it has not independently verified the accuracy, completeness or fairness of the statements contained in the Registration Statement or the Prospectus and does not assume any responsibility for the accuracy, completeness or fairness of such statements; however, nothing has come to such counsel's attention which leads such counsel to believe that the Registration Statement and the Prospectus (except as to the financial statements and the notes thereto, and the other financial and statistical data included therein, as to which such counsel need express no opinion), and each amendment or supplement thereto, as of their respective effective or issue dates or, if an Annual Report on Form 10-K has been filed by the Company or U S WEST with the SEC subsequent to the effectiveness of the Registration Statement, then at the time of the most recent such filing, and at the date of such opinion, contained or contains any untrue statements of a material fact or omitted or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus, as amended or supplemented as of the date of such opinion (or, if such opinion is being delivered in connection with the purchase of Notes by an Agent as principal pursuant to Section 8(c) hereof, at the date of any agreement by the Agent to purchase Notes as principal and at the Settlement Date with respect thereto), contains an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Except as specifically provided in clause (ix) above, such opinion may state that it does not address the impact on the opinions contained therein of any litigation or ruling relating to the divestiture by American Telephone and Telegraph Company of ownership of its operating telephone companies (the "Divestiture"). Opinion of Counsel to the Agents. The favorable opinion of Brown & Wood, counsel to the Agents, covering the matters referred to in subsection (b)(1) under the subheadings (i), (ii), (iii), (iv), (v), (vii), (viii) and (ix) and the penultimate paragraph of subsection (b)(1) above, subject to the final paragraph of subsection (b)(1) above, and with respect to such other matters as the Agents may reasonably request. In rendering such opinion, Brown & Wood may rely as to matters of Colorado law, upon the opinion referred to in Section 5(b)(1) without independent verification. Company Officers' Certificate. On the date hereof, the Agents shall have received a certificate of the President, any Vice President, an assistant secretary or an assistant treasurer, and the chief financial officer, chief accounting officer, treasurer, controller, or an assistant treasurer or assistant controller of the Company in which such officers shall state that the representations and warranties of the Company in this Agreement are true and correct as if made at and as of such date, that the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to such date, that no stop order suspending the effectiveness of the Registration Statement is in effect and no proceedings for that purpose are pending or are contemplated by the SEC, and that, subsequent to the date of the most recent financial statements in the Prospectus, there has been no material adverse change in the financial position or results of operations of the Company and its subsidiaries, taken as a whole, except as set forth in or contemplated by the Prospectus. US West Officers' Certificate. On the date hereof, the Agents shall have received a certificate of the President, any Vice President, an assistant secretary or an assistant treasurer, and the chief financial officer, chief accounting officer, treasurer, controller, or an assistant treasurer or controller of U S WEST in which such officers shall state that the representations and warranties of U S WEST in this Agreement are true and correct as if made at and as of such date, that U S WEST has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to such date, that no stop order suspending the effectiveness of the Registration Statement is in effect and no proceedings for that purpose are pending or are contemplated by the SEC, and that, subsequent to the date of the most recent financial statements in the Prospectus, there has been no material adverse change in the financial position or results of operations of U S WEST and its subsidiaries, taken as a whole, except as set forth in or contemplated by the Prospectus. Comfort Letter of Coopers & Lybrand L.L.P.. On the date hereof, the Agents shall have received a letter from Coopers & Lybrand L.L.P. addressed to the Company, U S WEST and the Agents, dated as of the date hereof and in form and substance satisfactory to the Agents. Other Documents. On the date hereof and on each Settlement Date, counsel to the Agents shall have been furnished with such documents and opinions as such counsel may reasonably require for the purpose of enabling such counsel to pass upon the issuance and sale of Notes as herein contemplated and related proceedings, or in order to evidence the accuracy and completeness of any of the representations and warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company and U S WEST in connection with the issuance and sale of Notes as herein contemplated shall be satisfactory in form and substance to the Agents and to counsel to the Agents. If any condition specified in this Section 5 shall not have been fulfilled when and as required to be fulfilled, this Agreement may be terminated by the applicable Agent or Agents by written notice to the Company and U S WEST at any time and any such termination shall be without liability of any party to any other party, except that the covenant regarding provision of an earnings statement set forth in Section 4(d) hereof, the indemnity and contribution agreement set forth in Section 9 hereof, the provi-sions concerning payment of expenses under Section 10 hereof, the provisions concerning the representations, warranties, indemnities and agreements to survive delivery of Section 11 hereof, the provisions relating to notices set forth in Section 13 hereof, the provisions relating to governing law and forum set forth in Section 14 hereof, and the provisions relating to parties set forth in Section 15 hereof shall remain in effect. ECTION Conditions of Company's Obligations. The obligation of the Company to deliver the Notes upon payment therefor will be subject to the conditions that (i) the Indenture will be qualified under the 1939 Act, (ii) no stop order suspending the effectiveness of the Registration Statement, as amended from time to time, shall be in effect, and (iii) no proceedings for that purpose shall be pending before, or threatened by, the SEC. If any condition specified in this Section 6 shall not have been fulfilled when required to be fulfilled, this Agreement may be terminated by the Company by written notice to the Agents at any time and such termination shall be without liability of any party to any other party, except that the covenant regarding provision of an earnings statement set forth in Section 4(d) hereof, the indemnity and contribution agreement set forth in Section 9 hereof, the provisions regarding payment of expenses under Section 10 hereof, the provisions concerning the representations, warranties, indemnities and agreements to survive delivery of Section 11 hereof, the provisions relating the notices set forth in Section 13 hereof, the provisions relating to governing law and forum set forth in Section 14 hereof, and the provisions relating to parties set forth in Section 15 hereof shall remain in effect. ECTION Delivery of and Payment for Notes Sold through an Agent. Delivery of Notes sold through an Agent as agent shall be made by the Company to such Agent for the account of any purchaser only against payment therefor in immediately available funds. In the event that a purchaser shall fail either to accept delivery of or to make payment for a Note on the date fixed for settlement, such Agent shall promptly notify the Company and deliver such Note to the Company and, if such Agent has theretofore paid the Company for such Note, the Company will promptly return such funds to such Agent. If such failure occurred for any reason other than default by such Agent in the performance of its obligations hereunder, the Company will reimburse such Agent on an equitable basis for its loss of the use of the funds for the period such funds were credited to the Company's account. ECTION Additional Covenants of the Company and U S WEST. The Company and U S WEST covenant and agree with the Agents that: Reaffirmation of Representations and Warranties. Each acceptance by the Company of an offer for the purchase of Notes (whether to one or more Agents as principal or through an Agent as agent), and each delivery of Notes (whether to one or more Agents as principal or through an Agent as agent), shall be deemed to be an affirmation that the representations and warranties of the Company and U S WEST contained in this Agreement and in any certificate theretofore delivered to the Agents pursuant hereto are true and correct at the time of such acceptance or sale, as the case may be, and an undertaking that such representa-tions and warranties will be true and correct at the time of delivery to such Agent or Agents or to the purchaser or its agent, as the case may be, of the Note or Notes relating to such acceptance or sale, as the case may be, as though made at and as of each such time (and it is understood that such representations and warranties shall relate to the Registration Statement and Prospectus as amended and supplemented to each such time). Subsequent Delivery of Certificates. Each time that the Registration Statement or the Prospectus shall be amended or supplemented (other than by an amendment or supplement providing solely for a change in the interest rate or formula applicable to the Notes or a change in the principal amount of Notes remaining to be sold or similar changes), or there is filed with the SEC any document incorporated by reference into the Prospectus or (if required in connection with the purchase of Notes by one or more Agents as principal) the Company sells Notes to such Agent or Agents as principal, each of the Company and U S WEST shall furnish or cause to be furnished to the Agent(s) forthwith a certifi-cate in form satisfac-tory to the Agent(s) to the effect that the statements contained in the certificates referred to in Sections 5(c) and 5(d) hereof which were last furnished to the Agents are true and correct at the time of such amendment or supplement or filing or sale, as the case may be, as though made at and as of such time (except that such statements shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to such time) or, in lieu of such certificates, certificates of the same tenor as the certificates referred to in Sections 5(c) and 5(d) hereof, modified as necessary to relate to the Registration Statement and the Pro-spectus as amended and supplemented to the time of delivery of such certificates. Subsequent Delivery of Legal Opinions. Each time that the Registration Statement or the Prospectus shall be amended or supplemented (other than by an amendment or supplement providing solely for a change in the interest rate or formula applicable to the Notes or a change in the principal amount of Notes remaining to be sold or similar changes), or there is filed with the SEC any document incorporated by reference into the Prospectus (other than a document setting forth or incorporating by reference financial statements or other information as of and for a fiscal quarter, unless specifically requested by all of the Agents) or (if required in connection with the purchase of Notes by one or more Agents as principal) the Company sells Notes to such Agent or Agents as principal, the Company and U S WEST shall furnish or cause to be furnished to the Agent(s) and to counsel to the Agents a written opinion of counsel to the Company and U S WEST, satisfactory to the Agent(s), dated the date of delivery of such opinion, in form satisfac-tory to the Agent(s), of the same tenor as the opinion referred to in Section 5(b)(1) hereof but modified, as necessary, to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such opinion or, in lieu of such opinion, counsel last furnishing such opinion to the Agents shall furnish the Agent(s) with a letter to the effect that the Agent(s) may rely on such last opinion to the same extent as though it was dated the date of such letter authorizing reliance (except that statements in such last opinion shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such letter authorizing reliance). Subsequent Delivery of Comfort Letters. Each time that the Registration Statement or the Prospectus shall be amended or supplemented to include additional financial information or there is filed with the SEC any docu-ment incorporated by reference into the Prospectus which contains additional financial information, or (if required in connection with the purchase of Notes by one or more Agents as principal) the Company sells Notes to such Agent or Agents as principal, the Company and U S WEST shall cause Coopers & Lybrand L.L.P. forthwith to furnish to the Agent(s) a letter, dated the date of filing of such amendment, supplement or document with the SEC, or the date of such sale, as the case may be, in form satisfactory to the Agent(s), of the same tenor as the portions of the letter referred to in Section 5(g) hereof, but modified to relate to the Registration Statement and Prospectus, as amended and supplemented to the date of such letter, and with such other changes as may be necessary to reflect changes in the financial statements and other information derived from the accounting records of the Company and U S WEST; provided, however, that if the Registration Statement or the Prospectus is amended or supplemented solely to include financial information as of and for a fiscal quarter, Coopers & Lybrand L.L.P. may limit the scope of such letter to the unaudited financial statements included in such amendment or supplement, unless any other information included therein of an accounting, financial, or statistical nature is of such a nature that, in the reasonable judgment of the Agent(s), such letter should cover such other information. ECTION Indemnification and Contribution. The Company and U S WEST, jointly and severally, will indemnify and hold each Agent harmless against any losses, claims, damages, or liabilities, joint or several, to which such Agent may become subject, under the 1933 Act or otherwise, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, the Prospectus, or any amendment or supplement thereto, or any related preliminary prospectus supplement, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and will reimburse each Agent for any legal or other expenses reasonably incurred by such Agent, as such expenses are incurred in connection with investigating or defending any such loss, claim, damage, liability or action or amounts paid in settlement of any litigation or investigation or proceeding related thereto if such settlement is effected with the written consent of the Company and U S WEST; provided, however, that the Company and U S WEST will not be liable in any such case to the extent that any such loss, claim, damage, or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in any of such documents in reliance upon and in conformity with written information furnished to the Company or U S WEST by the Agents specifically for use therein or in reliance upon and in conformity with the Statement of Eligibility of the Trustee under the Indenture. The Agents will indemnify and hold harmless the Company and U S WEST against any losses, claims, damages, or liabilities to which they may become subject, under the 1933 Act or otherwise, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, the Prospectus, or any amendment or supplement thereto, or any related preliminary prospectus supplement, or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company or U S WEST by the Agents specifically for use therein, and will reimburse any legal or other expenses reasonably incurred by the Company or U S WEST, as such expenses are incurred in connection with investigating or defending any such loss, claim, damage, liability, or action or amounts paid in settlement of any litigation or investigation or proceeding related thereto if such settlement is effected with the consent of the Agents. Promptly after receipt by an indemnified party under this Section 9 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section, notify the indemnifying party of the commencement thereof, but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than under this Section. In case any such action is brought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section 9 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. The indemnifying party or parties shall not be liable under this Agreement with respect to any settlement made by any indemnified party or parties without prior written consent by the indemnifying party or parties to such settlement. If the indemnification provided for in this Section 9 is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages, or liabilities referred to in subsection (a) or (b) above in such proportion as is appropriate to reflect the relative benefits received by the Company and U S WEST on the one hand and the Agents on the other from the offering of the Notes and also to reflect the relative fault of the Company and U S WEST on the one hand and the Agents on the other in connection with the statements or omissions which resulted in such losses, claims, damages, or liabilities as well as any other relevant equitable considerations. The relative benefits received by the Company and U S WEST on the one hand and the Agents on the other shall be deemed to be in the same proportion as the total net proceeds from the offering of Notes by the Agents (before deducting expenses) received by the Company and U S WEST bear to the total underwriting discounts and commissions received by the Agents. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, U S WEST, or the Agents and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages, or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), the Agents shall not be required to contribute any amount in excess of the amount by which the total price at which the Notes sold by such Agents and distributed to the public were offered to the public exceeds the amount of any damages which such Agents have otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of the Company and U S WEST under this Section 9 shall be in addition to any liability which the Company or U S WEST may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls each Agent within the meaning of the Act or the 1934 Act; the Agents' obligations under this Section 9 shall be in addition to any liability which the Agents may otherwise have and shall extend, upon the same terms and conditions, to each director of the Company or U S WEST, to each officer of the Company or U S WEST who has signed the Registration Statement, and to each person, if any, who controls the Company or U S WEST within the meaning of the 1933 Act or the 1934 Act. ECTION Payment of Expenses. The Company will pay all expenses incident to the performance of its obligations under this Agreement, including: The preparation and filing of the Registration Statement and all amendments thereto and the Prospectus and any amendments or supplements thereto; The preparation, filing and reproduction of this Agreement; The preparation, printing, issuance and delivery of the Notes, including any fees and expenses relating to the use of Notes in book-entry form; The fees and disbursements of the Company's accountants and counsel, of the Trustee and its counsel, and of any calculation agent or exchange rate agent; The reasonable fees and disbursements of counsel to the Agents incurred in connection with the establishment of the program relating to the Notes and incurred from time to time in connection with the transactions contemplated hereby; The qualification of the Notes under state securities laws in accordance with the provisions of Section 4(f) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Agents in connection there-with and in connec-tion with the preparation of any Blue Sky or Legal Investment Survey; The printing and delivery to the Agents in such quantities as are reasonably requested of copies of the Registration Statement and any amendments thereto, and of the Prospectus and any amendments or supplements thereto, and the delivery by the Agents of the Prospectus and any amendments or supplements thereto in connection with solicitations or confirmations of sales of the Notes; The preparation, reproducing and delivery to the Agents of copies of the Indenture and all supplements and amendments thereto; Any fees charged by rating agencies for the rating of the Notes; The fees and expenses incurred in connection with any listing of Notes on a securities exchange; The fees and expenses incurred with respect to any filing with the National Association of Securi-ties Dealers, Inc.; Any advertising and other out_of_pocket expenses of the Agents incurred with the approval of the Company; and The cost of providing any CUSIP or other identification numbers for the Notes. ECTION Representations, Warranties, Indemnities and Agreements to Survive Delivery. All representations, warranties, indemnities and agreements contained in this Agreement or in certificates of officers of the Company or U S WEST submitted pursuant hereto or thereto shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Agents of the Company, or U S WEST, or any of their officers, directors or any controlling person, and shall survive each delivery of and payment for any of the Notes. In no event shall the Company or U S WEST be liable to the Agents for damages on account of loss of anticipated profits. ECTION Termination. Termination of this Agreement. This Agreement (excluding any agreement hereunder by one or more Agents to purchase Notes as principal) may be terminated, for any reason at any time, by any Agent as to itself or by the Company as to all or any of the Agents upon the giving of 7 days written notice of such termination to the other parties hereto. Termination of Agreement to Purchase Notes as Principal. The applicable Agent or Agents may terminate any agreement hereunder by such Agent or Agents to purchase Notes as principal, immediately upon notice to the Company and U S WEST, at any time prior to the Settlement Date relating thereto if (i) there has been, since the respective dates as of which information is given in the Registration Statement, any change in the financial condition of the Company or of U S WEST and its subsidiaries considered as one enterprise, or in the earnings, affairs, or business prospects of the Company or of U S WEST and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, the effect of which is, in the judgment of such Agent or Agents, so material and adverse as to make it impracticable to market the Notes or enforce contracts for the sale thereof; or (ii) trading in any securities of the Company or U S WEST shall have been suspended by the SEC or the New York Stock Exchange, or trading in securities generally on the New York Stock Exchange shall have been suspended or limited or minimum prices shall have been established on such exchange; or (iii) a banking moratorium shall have been declared either by Federal or New York State authorities or a banking moratorium shall have been declared by the relevant authorities in the country or countries of origin of any foreign currency or currencies in which the Notes are denominated or payable, or (iv) there shall have occurred any outbreak or material escalation of hostilities or other calamity or crisis the effect of which in the financial markets in the United States is such as to make it, in the judgment of such Agent or Agents, impracticable to market the Notes or enforce contracts for the sale thereof; or (v) the rating assigned by any nationally recognized securities rating agency to any debt securities of the Company or U S WEST as of the date of the agreement to purchase the Notes shall have been lowered since that date or any such rating agency shall have publicly announced that it has any of such debt securities under consideration for possible downgrade. General. In the event of any such termination, no party will have any liability to any other party hereto, except that (i) the Agents shall be entitled to any commissions earned in accordance with the third paragraph of Section 3(b) hereof, (ii) if at the time of termination (a) any Agent shall own any Notes purchased by it as principal with the intention of reselling them or (b) an offer to purchase any of the Notes has been accepted by the Company but the time of delivery to the purchaser or his agent of the Notes relating thereto has not occurred, the conditions set forth in Sections 5 and 6 hereof shall remain in effect until such Notes are so resold or delivered, as the case may be, and (iii) the covenant set forth in Section 4(d) hereof, the indemnity and contribution agreements set forth in Section 9 hereof, and the provisions of Sections 10, 11, 13, 14 and 15 hereof shall remain in effect. ECTION Notices. Unless otherwise provided herein, all notices required under the terms and provisions hereof shall be in writing, either delivered by hand, by mail or by telecopier or telegram, and any such notice shall be effective when received at the address specified below. If to the Company: U S WEST Capital Funding, Inc. 7800 East Orchard Road Englewood, Colorado 80111 Attention: Treasurer Telecopy No.: (303) 793-6657 If to U S WEST: U S WEST, Inc. 7800 East Orchard Road Englewood, Colorado 80111 Attention: Treasurer Telecopy No.: (303) 793-6657 If to the Agents: Merrill Lynch & Co. Merrill Lynch, Pierce, Fenner & Smith Incorporated North Tower _ 10th Floor World Financial Center New York, New York 10281_1310 Attention: MTN Product Management Telecopy No.: (212) 449-2234 Goldman, Sachs & Co. 85 Broad Street New York, New York 10004 Attention: Credit Department Telecopy No.: (212) 363-7609 Lehman Brothers Lehman Brothers Inc. 3 World Financial Center, 12th Floor New York, New York 10285-1200 Attention: MTN Department Telecopy No.: (212) 528-1718 Morgan Stanley & Co. Incorporated 1221 Avenue of the Americas New York, New York 10020 Attention: Manager-Continuously Offered Products Telecopy No.: (212) 764-7490 Salomon Brothers Inc Seven World Trade Center New York, New York 10048 Attention: Medium-Term Note Department Telecopy No.: (212) 783-2274 or at such other address as such party may designate from time to time by notice duly given in accordance with the terms of this Section 13. ECTION Governing Law; Forum. This Agreement and all the rights and obligations of the parties shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed in such State. Any suit, action or proceeding brought by the Company or U S WEST against any Agent in connection with or arising under this Agreement shall be brought solely in the state or federal court of appropriate jurisdiction located in the Borough of Manhattan, The City of New York. ECTION Parties. This Agreement shall inure to the benefit of and be binding upon the Agents, the Company, U S WEST and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the parties hereto and their respective successors and the controlling persons and officers and directors referred to in Section 9 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the parties hereto and respective successors and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Notes shall be deemed to be a successor by reason merely of such purchase. ECTION Counterparts. This Agreement may be executed in one or more counterparts and, if executed in more than one counterpart, the executed counterparts hereof shall constitute a single instrument. If the foregoing is in accordance with the Agents' under-standing of our agreement, please sign and return to the Company a counter-part hereof, whereupon this instrument along with all counter-parts will become a binding agreement among the Agents, U S WEST and the Company in accordance with its terms. Very truly yours, U S WEST CAPITAL FUNDING, INC. By: _____________________________________ Name: Title: U S WEST, INC. By:_______________________________________ Name: Title: Confirmed and Accepted, as of the date first above written: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED By: Name: Title: GOLDMAN, SACHS & CO. LEHMAN BROTHERS INC. By: Name: Title: MORGAN STANLEY & CO. INCORPORATED By: Name: Title: SALOMON BROTHERS INC By: Name: Title: EXHIBIT A The following terms, if applicable, shall be agreed to by one or more Agents and the Company in connection with each sale of Notes: Principal Amount: $_______ (or principal amount of foreign currency or composite currency) Interest Rate: If Fixed Rate Note, Interest Rate: If Floating Rate Note: Interest Rate Basis: Initial Interest Rate, if any: Spread and/or Spread Multiplier, if any: Interest Reset Date(s): Interest Payment Date(s): Index Maturity: Maximum Interest Rate, if any: Minimum Interest Rate, if any: Fixed Rate Commencement Date: Fixed Interest Rate: Calculation Agent: If Redeemable: Initial Redemption Date: Initial Redemption Percentage: Annual Redemption Percentage Reduction, if any: If Repayable: Optional Repayment Date(s): Stated Maturity Date: Purchase Price: ___%, plus accrued interest, if any, from ______________________ Settlement Date and Time: Specified Currency: Authorized Denominations: Additional/Other Terms: Also, in connection with the purchase of Notes by one or more Agents as principal, agreement as to whether the following will be required: Officers' Certificates pursuant to Section 8(b) of the Distribution Agreement. Legal Opinions pursuant to Section 8(c) of the Distribution Agreement. Comfort Letter pursuant to Section 8(d) of the Distribution Agreement. Stand_off Agreement pursuant to Section 4(h) of the Distribution Agreement. SCHEDULE A As compensation for the services of the Agents hereunder, the Company shall pay the applicable Agent, on a discount basis, a commission for the sale of each Note equal to the principal amount of such Note multiplied by the appropriate percentage set forth below:
PERCENT OF MATURITY RANGES PRINCIPAL AMOUNT - ----------------------------------- ----------------- From 9 months to less than 1 year 125% From 1 year to less than 18 months 150 From 18 months to less than 2 years 200 From 2 years to less than 3 years 250 From 3 years to less than 4 years 350 From 4 years to less than 5 years 450 From 5 years to less than 6 years 500 From 6 years to less than 7 years 550 From 7 years to less than 10 years 600 From 10 years to less than 15 years 625 From 15 years to less than 20 years 700 From 20 years to 40 years 750 Greater than 40 years * _____________________ * As agreed to by the Company and the applicable Agent at the time of sale.
EX-4 4 EXHIBIT 4.3 (..continued) 2 EXHIBIT 4.3 [FACE OF NOTE] UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER HEREOF OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTA-TIVE OF THE DEPOSITARY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.(1) UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR TO ANOTHER NOMINEE OF THE DEPOSITARY, OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR OF THE DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR.(1)
REGISTERED CUSIP No. PRINCIPAL AMOUNT No. FXR- _______________
U S WEST CAPITAL FUNDING, INC. MEDIUM_TERM NOTE (Fixed Rate)
ORIGINAL ISSUE DATE: INTEREST RATE: % STATED MATURITY DATE: INTEREST PAYMENT DATE(S) DEFAULT RATE: [ ] May 15 and November 15 [ ] Other: INITIAL REDEMPTION INITIAL REDEMPTION ANNUAL REDEMPTION DATE: PERCENTAGE: PERCENTAGE REDUCTION: ____________________ (1) This paragraph applies to global Notes only.
OPTIONAL REPAYMENT DATE(S): [ ] CHECK IF AN ORIGINAL ISSUE DISCOUNT NOTE: Issue Price: % Total Amount of OID: Initial Accrual Period: Yield to Maturity:
SPECIFIED CURRENCY: OPTION TO ELECT PAYMENT [ ] United States dollars IN SPECIFIED CURRENCY (only [ ] Other: applicable if Specified Currency is other than United States dollars): [ ] Yes [ ] No
EXCHANGE RATE AGENT: AUTHORIZED DENOMINATION: [ ] $1,000 and integral multiples thereof [ ] Other: DEFAULT RATE: % ADDENDUM ATTACHED: [ ] Yes [ ] No OTHER PROVISIONS: U S WEST Capital Funding, Inc., a Colorado corporation (the "Company", which terms include any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to , or registered assigns, the principal sum of , on the Stated Maturity Date specified above (or any Redemption Date or Optional Repayment Date, each as defined on the reverse hereof) (each such Stated Maturity Date, Redemption Date or Optional Repayment Date being hereinafter referred to as the "Maturity Date" with respect to the principal repayable on such date) and to pay interest thereon, at the Interest Rate per annum specified above, until the principal hereof is paid or duly made available for payment, and (to the extent that the payment of such interest shall be legally enforceable) at the Default Rate per annum, if any, specified above on any overdue principal, premium and/or interest. The Company will pay interest in arrears on each Interest Payment Date, if any, specified above (each, an "Interest Payment Date"), commencing with the first Interest Payment Date next succeeding the Original Issue Date specified above, and on the Maturity Date; provided, however, that if the Original Issue Date occurs between a Record Date (as defined below) and the next succeeding Interest Payment Date, interest payments will commence on the second Interest Payment Date next succeeding the Original Issue Date to the holder of this Note on the Record Date with respect to such second Interest Payment Date. Interest on this Note will be computed on the basis of a 360-day year of twelve 30-day months. Interest on this Note will accrue from, and including, the immediately preceding Interest Payment Date to which interest has been paid or duly provided for (or from, and including, the Original Issue Date if no interest has been paid or duly provided for with respect to this Note) to, but excluding, the applicable Interest Payment Date or the Maturity Date, as the case may be (each, an "Interest Period"). The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, subject to certain exceptions described herein, be paid to the person in whose name this Note (or one or more predecessor Notes) is registered at the close of business on the fifteenth calendar day (whether or not a Business Day, as defined below) immediately preceding such Interest Payment Date (the "Record Date"); pro-vided, however, that interest payable on the Maturity Date will be payable to the person to whom the principal hereof and premium, if any, hereon shall be payable. Any such interest not so punctually paid or duly provided for ("Defaulted Interest") will forthwith cease to be payable to the holder on any Record Date, and shall be paid to the person in whose name this Note is registered at the close of business on a special record date (the "Special Record Date") for the payment of such Defaulted Interest to be fixed by the Issuing and Paying Agent (as defined on the reverse hereof), notice whereof shall be given to the holder of this Note by the Issuing and Paying Agent not less than 10 calendar days prior to such Special Record Date or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which this Note may be listed, and upon such notice as may be required by such exchange, all as more fully provided for in the Indenture (as defined on the reverse hereof). Payment of principal, premium, if any, and interest in respect of this Note due on the Maturity Date will be made in immediately available funds upon presentation and surrender of this Note (and, with respect to any applicable repayment of this Note, a duly completed election form as contemplated on the reverse hereof) at the corporate trust office of the Issuing and Paying Agent maintained for that purpose in the Borough of Manhattan, The City of New York, currently located at 111 Wall Street, New York, New York 10043, or at such other paying agency as the Company may determine; provided, however, that if such payment is to be made in a Specified Currency other than United States dollars as set forth below, such payment will be made by wire transfer of immediately available funds to an account with a bank designated by the holder hereof at least 15 calendar days prior to the Maturity Date, provided that such bank has appropriate facilities therefor and that this Note (and, if applicable, a duly completed election form) is presented and surrendered at the aforementioned office of the Issuing and Paying Agent in time for the Issuing and Paying Agent to make such payment in such funds in accordance with its normal procedures. Payment of interest due on any Interest Payment Date other than the Maturity Date will be made by check mailed to the address of the person entitled thereto as such address shall appear in the Security Register maintained at the aforementioned office of the Issuing and Paying Agent; provided, however, that a holder of U.S.$10,000,000 (or, if the Specified Currency specified above is other than United States dollars, the equivalent thereof in the Specified Currency) or more in aggregate principal amount of Notes (whether having identical or different terms and provisions) will be entitled to receive interest payments on such Interest Payment Date by wire transfer of immediately available funds if appropriate wire transfer instructions have been received in writing by the Issuing and Paying Agent not less than 15 calendar days prior to such Interest Payment Date. Any such wire transfer instructions received by the Issuing and Paying Agent shall remain in effect until revoked by such holder. If any Interest Payment Date or the Maturity Date falls on a day that is not a Business Day, the required payment of principal, premium, if any, and/or interest shall be made on the next succeeding Business Day with the same force and effect as if made on the date such payment was due, and no interest shall accrue with respect to such payment for the period from and after such Interest Payment Date or the Maturity Date, as the case may be, to the date of such payment on the next succeeding Business Day. As used herein, "Business Day" means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions are authorized or required by law, regulation or executive order to close in The City of New York; provided, however, that if the Specified Currency is other than United States dollars and any payment is to be made in the Specified Currency in accordance with the provisions hereof, such day is also not a day on which banking institutions are authorized or required by law, regulation or executive order to close in the Principal Financial Center (as defined below) of the country issuing the Specified Currency (or, in the case of the European Currency Unit ("ECU"), is not a day that appears as an ECU non-settlement day on the display designated as "ISDE" on the Reuter Monitor Money Rates Service (or a day so designated by the ECU Banking Association) or, if ECU non-settlement days do not appear on that page (and are not so designated), is not a day on which payments in ECU cannot be settled in the international interbank market). "Principal Financial Center" means the capital city of the country issuing the Specified Currency, except that with respect to United States dollars, Australian dollars, Deutsche marks, Dutch guilders, Italian lire, Swiss francs and ECUs, the "Principal Financial Center" shall be The City of New York, Sydney, Frankfurt, Amsterdam, Milan, Zurich and Luxembourg, respectively. The Company is obligated to make payment of principal, premium, if any, and interest in respect of this Note in the Specified Currency (or, if the Specified Currency is not at the time of such payment legal tender for the payment of public and private debts, in such other coin or currency of the country which issued the Specified Currency as at the time of such payment is legal tender for the payment of such debts). If the Specified Currency is other than United States dollars, any such amounts so payable by the Company will be converted by the Exchange Rate Agent specified above into United States dollars for payment to the holder of this Note; provided, however, that the holder of this Note may elect to receive such amounts in the Specified Currency pursuant to the provisions set forth below. If the Specified Currency is other than United States dollars and the holder of this Note shall not have duly made an election to receive all or a specified portion of any payment of principal, premium, if any, and/or interest in respect of this Note in the Specified Currency, any United States dollar amount to be received by the holder of this Note will be based on the highest bid quotation in The City of New York received by the Exchange Rate Agent at approximately 11:00 A.M., New York City time, on the second Business Day preceding the applicable payment date from three recognized foreign exchange dealers (one of whom may be the Exchange Rate Agent) selected by the Exchange Rate Agent and approved by the Company for the purchase by the quoting dealer of the Specified Currency for United States dollars for settlement on such payment date in the aggregate amount of the Specified Currency payable to all holders of Notes scheduled to receive United States dollar payments and at which the applicable dealer commits to execute a contract. All currency exchange costs will be borne by the holder of this Note by deductions from such payments. If three such bid quotations are not available, payments on this Note will be made in the Specified Currency. If the Specified Currency is other than United States dollars, the holder of this Note may elect to receive all or a specified portion of any payment of principal, premium, if any, and/or interest in respect of this Note in the Specified Currency by submitting a written request for such payment to the Issuing and Paying Agent at its corporate trust office in The City of New York on or prior to the applicable Record Date or at least 15 calendar days prior to the Maturity Date, as the case may be. Such written request may be mailed or hand delivered or sent by cable, telex or other form of facsimile transmission. The holder of this Note may elect to receive all or a specified portion of all future payments in the Specified Currency in respect of such principal, premium, if any, and/or interest and need not file a separate election for each payment. Such election will remain in effect until revoked by written notice to the Issuing and Paying Agent, but written notice of any such revocation must be received by the Issuing and Paying Agent on or prior to the applicable Record Date or at least 15 calendar days prior to the Maturity Date, as the case may be. If the Specified Currency is other than United States dollars and the holder of this Note shall have duly made an election to receive all or a specified portion of any payment of principal, premium, if any, and/or interest in respect of this Note in the Specified Currency and if the Specified Currency is not available due to the imposition of exchange controls or other circumstances beyond the control of the Company, the Company will be entitled to satisfy its obligations to the holder of this Note by making such payment in United States dollars on the basis of the Market Exchange Rate (as defined below) on the second Business Day prior to such payment date or, if such Market Exchange Rate is not then available, on the basis of the most recently available Market Exchange Rate or as otherwise specified on the face hereof. The "Market Exchange Rate" for the Specified Currency other than United States dollars or a composite currency means the noon dollar buying rate in The City of New York for cable transfers for such Specified Currency as certified for customs purposes by (or if not so certified, as otherwise determined by) the Federal Reserve Bank of New York. Any payment made under such circumstances in United States dollars will not constitute an Event of Default (as defined in the Indenture) with respect to this Note. If the Specified Currency is a composite currency and the holder of this Note shall have duly made an election to receive all or a specified portion of any payment of principal, premium, if any, and/or interest in respect of this Note in the Specified Currency and if such composite currency is unavailable due to the imposition of exchange controls or other circumstances beyond the control of the Company, the Company will be entitled to satisfy its obligations to the holder of this Note by making such payment in United States dollars. The amount of each payment in United States dollars shall be computed by the Exchange Rate Agent on the basis of the equivalent of the composite currency in United States dollars. The component currencies of the composite currency for this purpose (collectively, the "Component Currencies" and each, a "Component Currency") shall be the currency amounts that were components of the composite currency as of the last day on which the composite currency was used. The equivalent of the composite currency in United States dollars shall be calculated by aggregating the United States dollar equivalents of the Component Currencies. The United States dollar equivalent of each of the Component Currencies shall be determined by the Exchange Rate Agent on the basis of the most recently available Market Exchange Rate for each such Component Currency, or as otherwise specified on the face hereof. If the official unit of any Component Currency is altered by way of combination or subdivision, the number of units of the currency as a Component Currency shall be divided or multiplied in the same proportion. If two or more Component Currencies are consolidated into a single currency, the amounts of those currencies as Component Currencies shall be replaced by an amount in such single currency equal to the sum of the amounts of the consolidated Component Currencies expressed in such single currency. If any Component Currency is divided into two or more currencies, the amount of the original Component Currency shall be replaced by the amounts of such two or more currencies, the sum of which shall be equal to the amount of the original Component Currency. All determinations referred to above made by the Exchange Rate Agent shall be at its sole discretion and shall, in the absence of manifest error, be conclusive for all purposes and binding on the holder of this Note. Reference is hereby made to the further provisions of this Note set forth on the reverse hereof and, if so specified above, in the Addendum hereto, which further provisions shall have the same force and effect as if set forth on the face hereof. Notwithstanding any provisions to the contrary contained herein, if the face of this Note specifies that an Addendum is attached hereto or that "Other Provisions" apply, this Note shall be subject to the terms set forth in such Addendum or such "Other Provisions". Unless the Certificate of Authentication hereon has been executed by the Trustee by manual signature of one of its authorized officers, or on behalf of the Trustee by the manual signature of an authorized officer of the Trustee's authenticating agent, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. IN WITNESS WHEREOF, U S WEST Capital Funding, Inc. has caused this Note to be executed, manually or by facsimile, and its corporate seal or a facsimile of its corporate seal to be imprinted hereon. Dated: U S WEST Capital Funding, Inc. By:_______________________________ James T. Anderson President (SEAL) By:_______________________________ Charles J. Burdick Vice President and Treasurer CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated herein, issued under the Indenture described herein. FIRST NATIONAL BANK OF SANTA FE By CITIBANK, N.A., as Authenticating Agent By:___________________________ Authorized Officer GUARANTEE OF U S WEST, INC. FOR VALUE RECEIVED, U S WEST, INC., a corporation duly organized and existing under the laws of the State of Colorado (the "Guarantor"), hereby unconditionally guarantees to the holder of the Note upon which this Guarantee is endorsed the due and punctual payment of the principal of, premium, if any, and interest on said Note, when and as the same shall become due and payable, whether at maturity, upon redemption or repayment, or otherwise, according to the terms thereof and of the Indenture referred to therein. The Guarantor agrees to determine, at least one business day prior to the date upon which a payment of principal of, premium, if any, or interest on said Note is due and payable, whether U S WEST Capital Funding, Inc., a Colorado corporation (the "Company"), has available the funds to make such payment as the same shall become due and payable. In case of the failure of the Company punctually to pay any such principal, premium, if any, or interest, the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at maturity, upon redemption or repayment, or otherwise, and as if such payment were made by the Company. The Guarantor hereby agrees that its obligations hereunder shall be unconditional, irrevocable, and absolute, irrespective of the validity, regularity, or enforceability of said Note or said Indenture, the absence of any action to enforce the same, any waiver or consent by the holder of said Note with respect to any provisions thereof, the recovery of any judgment against the Company or any action to enforce the same, or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Company, any right to require a proceeding first against the Company, protest or notice with respect to said Note or indebtedness evidenced thereby, and all demands whatsoever and covenants that this Guarantee will not be discharged except by complete performance of the obligations contained in said Note and in this Guarantee. The Guarantor shall be subrogated to all rights of the holder of said Note against the Company in respect of any amounts paid by the Guarantor pursuant to the provisions of this Guarantee; provided, however, that the Guarantor shall not, without the consent of the holders of all of the Notes then outstanding, be entitled to enforce or to receive any payments arising out of, or based upon, such right of subrogation until the principal of and premium, if any, and interest on all Notes of the Company known as "Medium-Term Notes Due Nine Months or More from Date of Issue" shall have been paid in full or payment thereof shall have been provided for in accordance with said Indenture. Notwithstanding anything to the contrary contained herein, if following any payment of principal, premium, if any, or interest by the Company on the Notes to the holders of the Notes it is determined by a final decision of a court of competent jurisdiction that such payment shall be avoided by a trustee in bankruptcy (including any debtor-in-possession) as a preference under 11 U.S.C Section 547 and such payment is paid by such holder to such trustee in bankruptcy, then, and to the extent of such repayment, the obligations of the Guarantor hereunder shall remain in full force and effect. This Guarantee shall not be valid or become obligatory for any purpose with respect to a Note until the certificate of authentication of such Note shall have been signed by the Trustee or on its behalf by the Trustee's authenticating agent. This Guarantee shall be governed by the laws of the State of New York. IN WITNESS WHEREOF, U S WEST, Inc. has caused this Guarantee to be executed, manually or by facsimile, and its corporate seal or a facsimile of its corporate seal to be imprinted hereon. U S WEST, Inc. By:____________________________________ James T. Anderson Acting Executive Vice President and Chief Financial Officer By:_____________________________________ Charles J. Burdick Vice President and Assistant Treasurer (SEAL) [REVERSE OF NOTE] U S WEST CAPITAL FUNDING, INC. MEDIUM_TERM NOTE (Fixed Rate) This Note is one of a duly authorized series of Debt Securities (the "Debt Securities") of the Company issued and to be issued under an Indenture, dated as of April 15, 1988, as amended, modified or supplemented from time to time (the "Indenture"), among the Company, U S WEST, Inc., a Colorado corporation ("U S WEST"), and First National Bank of Santa Fe, as Trustee (the "Trustee", which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the holders of the Debt Securities, and of the terms upon which the Debt Securities are, and are to be, authenticated and delivered. Citibank, N.A. ("Citibank"), pursuant to an agreement with U S West, Inc. and the Company dated October 13, 1995, will act as paying agent ("Paying Agent") for the payment of principal, premium, if any, and interest on this Note as well as the registrar (the "Security Registrar"). The Trustee has appointed Citibank as the authenticating agent (the "Authenticating Agent"), with respect to this Note. Citibank, as Paying Agent, Security Registrar and Authenticating Agent together with any successors in such capacities, is hereinafter referred to as the "Issuing and Paying Agent." This Note is one of the series of Debt Securities designated as "Medium-Term Notes Due Nine Months or More From Date of Issue" (the "Notes"). All terms used but not defined in this Note specified on the face hereof or in an Addendum hereto shall have the meanings assigned to such terms in the Indenture. This Note is issuable only in registered form without coupons in minimum denominations of U.S.$1,000 and integral multiples thereof or the minimum Authorized Denomination specified on the face hereof. This Note will not be subject to any sinking fund and, unless otherwise provided on the face hereof in accordance with the provisions of the following two paragraphs, will not be redeemable or repayable prior to the Stated Maturity Date. This Note will be subject to redemption at the option of the Company on any date on and after the Initial Redemption Date, if any, specified on the face hereof, in whole or from time to time in part in increments of U.S.$1,000 or the minimum Authorized Denomination (provided that any remaining principal amount hereof shall be at least U.S.$1,000 or such minimum Authorized Denomination), at the Redemption Price (as defined below), together with unpaid interest accrued thereon to the date fixed for redemption (each, a "Redemption Date"), on notice given no more than 90 nor less than 30 calendar days prior to the Redemption Date and in accordance with the provisions of the Indenture. The "Redemption Price" shall initially be the Initial Redemption Percentage specified on the face hereof (as adjusted by the Annual Redemption Percentage Reduction, if any, specified on the face hereof) multiplied by the unpaid principal amount of this Note to be redeemed. The Initial Redemption Percentage shall decline at each anniversary of the Initial Redemption Date by the Annual Redemption Percentage Reduction, if any, specified on the face hereof until the Redemption Price is 100% of unpaid principal amount to be redeemed. In the event of redemption of this Note in part only, a new Note of like tenor for the unredeemed portion hereof and otherwise having the same terms as this Note shall be issued in the name of the holder hereof upon the presentation and surrender hereof. This Note will be subject to repayment by the Company at the option of the holder hereof on the Optional Repayment Date(s), if any, specified on the face hereof, in whole or from time to time in part in increments of U.S.$1,000 or the minimum Authorized Denomination (provided that any remaining principal amount hereof shall be at least U.S.$1,000 or such minimum Authorized Denomination), at a repayment price equal to 100% of the unpaid principal amount to be repaid, together with unpaid interest accrued thereon to the relevant Optional Repayment Date. For this Note to be repaid, this Note must be received, together with the form hereon entitled "Option to Elect Repayment" duly completed, by the Issuing and Paying Agent at its corporate trust office not more than 60 nor less than 20 calendar days prior to the relevant Optional Repayment Date. Exercise of such repayment option by the holder hereof will be irrevocable. In the event of repayment of this Note in part only, a new Note of like tenor for the unrepaid portion hereof and otherwise having the same terms as this Note shall be issued in the name of the holder hereof upon the presentation and surrender hereof. If this Note is a Discount Note as specified on the face hereof, the amount payable to the holder of this Note in the event of redemption, repayment or acceleration of maturity will be equal to (i) the Amortized Face Amount (as defined below) as of the date of such event, plus (ii) with respect to any redemption of this Note, the Initial Redemption Percentage specified on the face hereof (as adjusted by the Annual Redemption Percentage Reduction, if any, specified on the face hereof) minus 100% multiplied by the Issue Price specified on the face hereof (the "Issue Price"), net of any portion of such Issue Price which has been paid prior to the date of redemption, or the portion of the Issue Price (or the net amount) proportionate to the portion of the unpaid principal amount to be redeemed, plus (iii) any accrued interest to the date of such event the payment of which would constitute qualified stated interest payments within the meaning of Treasury Regulation 1.1273-1(c) under the Internal Revenue Code of 1986, as amended (the "Code"). The "Amortized Face Amount" of this Note, if it is a Discount Note, means an amount equal to (i) the Issue Price hereof plus (ii) the aggregate portions of the original issue discount (the excess of the amounts considered as part of the "stated redemption price at maturity" hereof within the meaning of Section 1273(a)(2) of the Code, whether denominated as principal or interest, over the Issue Price) which shall have accrued hereon pursuant to Section 1272 of the Code (without regard to Section 1272(a)(7) of the Code) from the date of issue of this Note to the date of determination, minus (iii) any amount considered as part of the "stated redemption price at maturity" hereof which has been paid from the date of issue to the date of determination. If an Event of Default, as defined in the Indenture, shall occur and be continuing, the principal of the Notes may be declared due and payable in the manner and with the effect provided in the Indenture. The Indenture contains provisions for defeasance of (i) the entire indebtedness of the Notes or (ii) certain covenants and Events of Default with respect to the Notes, in each case upon compliance with certain conditions set forth therein, which provisions apply to the Notes. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and U S WEST and the rights of the holders of the Debt Securities at any time by the Company, U S WEST and the Trustee with the consent of the holders of not less than a majority of the aggregate principal amount of all Debt Securities at the time outstanding and affected thereby. The Indenture also contains provisions permitting the holders of not less than a majority of the aggregate principal amount of the outstanding Debt Securities of any series, on behalf of the holders of all such Debt Securities, to waive compliance by the Company with certain provisions of the Indenture. Furthermore, provisions in the Indenture permit the holders of not less than a majority of the aggregate principal amount of the outstanding Debt Securities of any series, in certain instances, to waive, on behalf of all of the holders of Debt Securities of such series, certain past defaults under the Indenture and their consequences. Any such consent or waiver by the holder of this Note shall be conclusive and binding upon such holder and upon all future holders of this Note and other Notes issued upon the registration of transfer hereof or in exchange heretofore or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company or U S WEST, which is absolute and unconditional, to pay principal, premium, if any, and interest in respect of this Note or the Guarantee, respectively, at the times, places and rate of formula, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein and herein set forth, the transfer of this Note is registrable in the Security Register of the Company upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal hereof premium, if any, or interest hereon is payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the holder hereof or by his attorney duly authorized in writing, and thereupon one or more new Notes, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. As provided in the Indenture and subject to certain limitations therein and herein set forth, this Note is exchangeable for a like aggregate principal amount of Notes of different authorized denominations but otherwise having the same terms and conditions, as requested by the holder hereof surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Note for registration of transfer, the Company, the Issuing and Paying Agent and any agent of the Company or the Issuing and Paying Agent may treat the holder in whose name this Note is registered as the owner thereof for all purposes, whether or not this Note be overdue, and neither the Company, the Issuing and Paying Agent nor any such agent shall be affected by notice to the contrary. The Indenture and this Note shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely in such State. _____________ ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Note, shall be construed as though they were written out in full according to applicable laws or regulations:
TEN COM _ as tenants in common UNIF GIFT MIN ACT _ ______ Custodian _____ TEN ENT _ as tenants by the entireties (Cust) (Minor) JT TEN _ as joint tenants with right of under Uniform Gifts to Minors survivorship and not as tenants in common Act_____________________ (State)
Additional abbreviations may also be used though not in the above list. __________________________________ FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE | |_____________________________|______________________________________________ _____________________________________________________________________________ Please print or typewrite name and address including postal zip code of assignee) ______________________________________________________________________________ the within Note and all rights thereunder hereby irrevocably constituting and appointing ____________________________________________________________________ Attorney to transfer said Note on the books of the Trustee, with full power of substitution in the premises. Dated:_____________________ _________________________________________________ __________________________________________________ Notice: The signature(s) on this assignment must correspond with the name(s) as written upon the face of the within Note in every particular, without alteration or enlargement or any change whatsoever. OPTION TO ELECT REPAYMENT The undersigned hereby irrevocably request(s) and instruct(s) the Company to repay this Note (or portion hereof specified below) pursuant to its terms at a price equal to 100% of the principal amount to be repaid, together with unpaid interest accrued hereon to the relevant Optional Repayment Date, to the undersigned, at __________________ _____________________________________________________________________________ ___________________ (Please print or typewrite name and address of the undersigned) For this Note to be repaid, the Issuing and Paying Agent must receive at its corporate trust office, not more than 60 nor less than 20 calendar days prior to the Optional Repayment Date, this Note with this "Option to Elect Repayment" form duly completed. If less than the entire principal amount of this Note is to be repaid, specify the portion hereof (which shall be increments of U.S.$1,000 (or, if the Specified Currency specified on the face hereof is other than United States dollars, the minimum Authorized Denomination specified on the face hereof)) which the holder elects to have repaid and specify the denomination or denominations (which shall be an Authorized Denomination) of the Notes to be issued to the holder for the portion of this Note not being repaid (in the absence of any such specification, one such Note will be issued for the portion not being repaid).
Principal Amount to be Repaid: ____________________________ ____________________________________________ Notice: The signature(s) on this Date: ___________________________________ Option to Elect Repayment must correspond with the name(s) as written upon the face of the within Note in every particular, without alteration or enlargement or any change whatsoever.
EX-4 5 EXHIBIT 4.4 (..continued) 2 EXHIBIT 4.4 [FACE OF NOTE] UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER HEREOF OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTA-TIVE OF THE DEPOSITARY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.(1) UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR TO ANOTHER NOMINEE OF THE DEPOSITARY, OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR OF THE DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR.(1)
REGISTERED CUSIP No. PRINCIPAL AMOUNT No. FLR-____ _______________ ____________________
U S WEST CAPITAL FUNDING, INC. MEDIUM_TERM NOTE (Floating Rate)
INTEREST RATE BASIS ORIGINAL ISSUE DATE: STATED MATURITY DATE: OR BASES:
IF LIBOR: IF CMT RATE: [ ] LIBOR Reuters Designated CMT Telerate Page: [ ] LIBOR Telerate Designated CMT Maturity Index:
INDEX CURRENCY:
INDEX MATURITY: INITIAL INTEREST RATE: INITIAL INTEREST RESET DATE: SPREAD (PLUS OR MINUS): MINIMUM INTEREST RATE: INTEREST PAYMENT DATE(S): ____________________ (1) This paragraph applies to global Notes only.
25
SPREAD MULTIPLIER: MAXIMUM INTEREST RATE: INTEREST RESET DATE(S): INITIAL REDEMPTION INITIAL REDEMPTION ANNUAL REDEMPTION DATE: PERCENTAGE: PERCENTAGE REDUCTION: OPTIONAL REPAYMENT INTEREST PERIOD: CALCULATION AGENT: DATE(S): INTEREST CATEGORY: DAY COUNT CONVENTION: [ ] Regular Floating Rate Note [ ] 30/360 for the period [ ] Floating Rate/Fixed Rate Note from to . Fixed Rate Commencement Date: [ ] Actual/360 for the period Fixed Interest Rate: from to . [ ] Inverse Floating Rate Note [ ] Actual/Actual for the period Fixed Interest Rate: from to . [ ] Original Issue Discount Note Applicable Interest Rate Basis: Issue Price: % Total Amount of OID: Initial Accrual Period: Yield to Maturity: SPECIFIED CURRENCY: OPTION TO ELECT PAYMENT IN [ ] United States dollars SPECIFIED CURRENCY (only applicable [ ] Other: if Specified Currency is other than United States dollars): [ ] Yes [ ] No
EXCHANGE RATE AGENT: AUTHORIZED DENOMINATION: [ ] $1,000 and integral multiples thereof [ ] Other: DEFAULT RATE: % ADDENDUM ATTACHED: [ ] Yes [ ] No OTHER PROVISIONS: U S WEST Capital Funding, Inc., a Colorado corporation (the "Company", which terms include any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to , or registered assigns, the principal sum of , on the Stated Maturity Date specified above (or any Redemption Date or Optional Repayment Date, each as defined on the reverse hereof) (each such Stated Maturity Date, Redemption Date or Optional Repayment Date being hereinafter referred to as the "Maturity Date" with respect to the principal repayable on such date) and to pay interest thereon, at a rate per annum equal to the Initial Interest Rate specified above until the Initial Interest Reset Date specified above and thereafter at a rate determined in accordance with the provisions specified above and on the reverse hereof with respect to one or more Interest Rate Bases specified above until the prin-cipal hereof is paid or duly made available for payment, and (to the extent that the payment of such interest shall be legally enforceable) at the Default Rate per annum, if any, specified above on any overdue principal, premium and/or interest. The Company will pay interest in arrears on each Interest Payment Date, if any, specified above (each, an "Interest Payment Date"), commencing with the first Interest Payment Date next succeeding the Original Issue Date specified above, and on the Maturity Date; provided, however, that if the Original Issue Date occurs between a Record Date (as defined below) and the next succeeding Interest Payment Date, interest payments will commence on the second Interest Payment Date next succeeding the Original Issue Date to the holder of this Note on the Record Date with respect to such second Interest Payment Date. Interest on this Note will accrue from, and including, the immediately preceding Interest Payment Date to which interest has been paid or duly provided for (or from, and including, the Original Issue Date if no interest has been paid or duly provided for with respect to this Note) to, but excluding, the applicable Interest Payment Date or the Maturity Date, as the case may be (each, an "Interest Period"). The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, subject to certain exceptions described herein, be paid to the person in whose name this Note (or one or more predecessor Notes) is registered at the close of business on the fifteenth calendar day (whether or not a Business Day, as defined below) immediately preceding such Interest Payment Date (the "Record Date"); provided, however, that interest payable on the Maturity Date will be payable to the person to whom the princi-pal hereof and premium, if any, hereon shall be payable. Any such interest not so punctually paid or duly provided for ("Defaulted Interest") will forthwith cease to be payable to the holder on any Record Date, and shall be paid to the person in whose name this Note is registered at the close of business on a special record date (the "Special Record Date") for the payment of such Defaulted Interest to be fixed by the Issuing and Paying Agent (as defined on the reverse hereof) notice whereof shall be given to the holder of this Note by the Issuing and Paying Agent not less than 10 calendar days prior to such Special Record Date or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which this Note may be listed, and upon such notice as may be required by such exchange, all as more fully provided for in the Indenture (as defined on the reverse hereof). Payment of principal, premium, if any, and interest in respect of this Note due on the Maturity Date will be made in immediately available funds upon presentation and surrender of this Note (and, with respect to any applicable repayment of this Note, a duly completed election form as contemplated on the reverse hereof) at the corporate trust office of the Issuing and Paying Agent maintained for that purpose in the Borough of Manhattan, The City of New York, currently located at 111 Wall Street, New York, New York 10043, or at such other paying agency as the Company may determine; provided, however, that if such payment is to be made in a Specified Currency other than United States dollars as set forth below, such payment will be made by wire transfer of immediately available funds to an account with a bank designated by the holder hereof at least 15 calendar days prior to the Maturity Date, provided that such bank has appropriate facilities therefor and that this Note (and, if applicable, a duly completed election form) is presented and surrendered at the aforementioned office of the Issuing and Paying Agent in time for the Issuing and Paying Agent to make such payment in such funds in accordance with its normal procedures. Payment of interest due on any Interest Payment Date other than the Maturity Date will be made by check mailed to the address of the person entitled thereto as such address shall appear in the Security Register maintained at the aforementioned office of the Issuing and Paying Agent; provided, however, that a holder of U.S.$10,000,000 (or, if the Specified Currency specified above is other than United States dollars, the equivalent thereof in the Specified Currency) or more in aggregate principal amount of Notes (whether having identical or different terms and provisions) will be entitled to receive interest payments on such Interest Payment Date by wire transfer of immediately available funds if appropriate wire transfer instructions have been received in writing by the Issuing and Paying Agent not less than 15 calendar days prior to such Interest Payment Date. Any such wire transfer instructions received by the Issuing and Paying Agent shall remain in effect until revoked by such holder. If any Interest Payment Date other than the Maturity Date would otherwise be a day that is not a Business Day, such Interest Payment Date shall be postponed to the next succeeding Business Day, except that if LIBOR is an applicable Interest Rate Basis and such Business Day falls in the next succeeding calendar month, such Interest Payment Date shall be the immediately preceding Business Day. If the Maturity Date falls on a day that is not a Business Day, the required payment of principal, premium, if any, and/or interest shall be made on the next succeeding Business Day with the same force and effect as if made on the date such payment was due, and no interest shall accrue with respect to such payment for the period from and after the Maturity Date to the date of such payment on the next succeeding Business Day. As used herein, "Business Day" means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions are authorized or required by law, regulation or executive order to close in The City of New York; provided, however, that if the Specified Currency is other than United States dollars and any payment is to be made in the Specified Currency in accordance with the provisions hereof, such day is also not a day on which banking institutions are authorized or required by law, regulation or executive order to close in the Principal Financial Center (as defined below) of the country issuing the Specified Currency (or, in the case of the European Currency Unit ("ECU"), is not a day that appears as an ECU non-settlement day on the display designated as "ISDE" on the Reuter Monitor Money Rates Service (or a day so designated by the ECU Banking Association) or, if ECU non-settlement days do not appear on that page (and are not so designated), is not a day on which payments in ECU cannot be settled in the international interbank market); provided, further, that if LIBOR is an applicable Interest Rate Basis, such day is also a London Business Day (as defined below). "London Business Day" means any day (i) if the Index Currency (as defined below) is other than ECU, on which dealings in such Index Currency are transacted in the London interbank market or (ii) if the Index Currency is ECU, that is not designated as an ECU non-settlement day on the display designated as "ISDE" on the Reuter Monitor Money Rates Service (or a day so designated by the ECU Banking Association) or, if ECU non-settlement days do not appear on that page (and are not so designated), is not a day on which payments in ECU cannot be settled in the international interbank market. "Principal Financial Center" means the capital city of the country issuing the Specified Currency, or solely with respect to the calculation of LIBOR, the Index Currency, except that with respect to United States dollars, Australian dollars, Deutsche marks, Dutch guilders, Italian lire, Swiss francs and ECUs, the "Principal Financial Center" shall be The City of New York, Sydney, Frankfurt, Amsterdam, Milan, Zurich and Luxembourg, respectively. The Company is obligated to make payment of principal, premium, if any, and interest in respect of this Note in the Specified Currency (or, if the Specified Currency is not at the time of such payment legal tender for the payment of public and private debts, in such other coin or currency of the country which issued the Specified Currency as at the time of such payment is legal tender for the payment of such debts). If the Specified Currency is other than United States dollars, any such amounts so payable by the Company will be converted by the Exchange Rate Agent specified above into United States dollars for payment to the holder of this Note; provided, however, that the holder of this Note may elect to receive such amounts in the Specified Currency pursuant to the provisions set forth below. If the Specified Currency is other than United States dollars and the holder of this Note shall not have duly made an election to receive all or a specified portion of any payment of principal, premium, if any, and/or interest in respect of this Note in the Specified Currency, any United States dollar amount to be received by the holder of this Note will be based on the highest bid quotation in The City of New York received by the Exchange Rate Agent at approximately 11:00 A.M., New York City time, on the second Business Day preceding the applicable payment date from three recognized foreign exchange dealers (one of whom may be the Exchange Rate Agent) selected by the Exchange Rate Agent and approved by the Company for the purchase by the quoting dealer of the Specified Currency for United States dollars for settlement on such payment date in the aggregate amount of the Specified Currency payable to all holders of Notes scheduled to receive United States dollar payments and at which the applicable dealer commits to execute a contract. All currency exchange costs will be borne by the holder of this Note by deductions from such payments. If three such bid quotations are not available, payments on this Note will be made in the Specified Currency. If the Specified Currency is other than United States dollars, the holder of this Note may elect to receive all or a specified portion of any payment of principal, premium, if any, and/or interest in respect of this Note in the Specified Currency by submitting a written request for such payment to the Issuing and Paying Agent at its corporate trust office in The City of New York on or prior to the applicable Record Date or at least 15 calendar days prior to the Maturity Date, as the case may be. Such written request may be mailed or hand delivered or sent by cable, telex or other form of facsimile transmission. The holder of this Note may elect to receive all or a specified portion of all future payments in the Specified Currency in respect of such principal, premium, if any, and/or interest and need not file a separate election for each payment. Such election will remain in effect until revoked by written notice to the Issuing and Paying Agent, but written notice of any such revocation must be received by the Issuing and Paying Agent on or prior to the applicable Record Date or at least 15 calendar days prior to the Maturity Date, as the case may be. If the Specified Currency is other than United States dollars and the holder of this Note shall have duly made an election to receive all or a specified portion of any payment of principal, premium, if any, and/or interest in respect of this Note in the Specified Currency and if the Specified Currency is not available due to the imposition of exchange controls or other circumstances beyond the control of the Company, the Company will be entitled to satisfy its obligations to the holder of this Note by making such payment in United States dollars on the basis of the Market Exchange Rate (as defined below) on the second Business Day prior to such payment date or, if such Market Exchange Rate is not then available, on the basis of the most recently available Market Exchange Rate or as otherwise specified on the face hereof. The "Market Exchange Rate" for the Specified Currency other than United States dollars on a composite currency means the noon dollar buying rate in The City of New York for cable transfers for such Specified Currency as certified for customs purposes by (or if not so certified, as otherwise determined by) the Federal Reserve Bank of New York. Any payment made under such circumstances in United States dollars will not constitute an Event of Default (as defined in the Indenture) with respect to this Note. If the Specified Currency is a composite currency and the holder of this Note shall have duly made an election to receive all or a specified portion of any payment of principal, premium, if any, and/or interest in respect of this Note in the Specified Currency and if such composite currency is unavailable due to the imposition of exchange controls or other circumstances beyond the control of the Company, the Company will be entitled to satisfy its obligations to the holder of this Note by making such payment in United States dollars. The amount of each payment in United States dollars shall be computed by the Exchange Rate Agent on the basis of the equivalent of the composite currency in United States dollars. The component currencies of the composite currency for this purpose (collectively, the "Component Currencies" and each, a "Component Currency") shall be the currency amounts that were components of the composite currency as of the last day on which the composite currency was used. The equivalent of the composite currency in United States dollars shall be calculated by aggregating the United States dollar equivalents of the Component Currencies. The United States dollar equivalent of each of the Component Currencies shall be determined by the Exchange Rate Agent on the basis of the most recently available Market Exchange Rate for each such Component Currency, or as otherwise specified on the face hereof. If the official unit of any Component Currency is altered by way of combination or subdivision, the number of units of the currency as a Component Currency shall be divided or multiplied in the same proportion. If two or more Component Currencies are consolidated into a single currency, the amounts of those currencies as Component Currencies shall be replaced by an amount in such single currency equal to the sum of the amounts of the consolidated Component Currencies expressed in such single currency. If any Component Currency is divided into two or more currencies, the amount of the original Component Currency shall be replaced by the amounts of such two or more currencies, the sum of which shall be equal to the amount of the original Component Currency. All determinations referred to above made by the Exchange Rate Agent shall be at its sole discretion and shall, in the absence of manifest error, be conclusive for all purposes and binding on the holder of this Note. Reference is hereby made to the further provisions of this Note set forth on the reverse hereof and, if so specified above, in the Addendum hereto, which further provisions shall have the same force and effect as if set forth on the face hereof. Notwithstanding any provisions to the contrary contained herein, if the face of this Note specifies that an Addendum is attached hereto or that "Other Provisions" apply, this Note shall be subject to the terms set forth in such Addendum or such "Other Provisions". Unless the Certificate of Authentication hereon has been executed by the Trustee by manual signature of one of its authorized officers, or on behalf of the Trustee by the manual signature of an authorized officer of the Trustee's authenticating agent, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. IN WITNESS WHEREOF, U S WEST Capital Funding, Inc. has caused this Note to be executed, manually or by facsimile, and its corporate seal or a facsimile of its corporate seal to be imprinted hereon. Dated: U S WEST Capital Funding, Inc. By:__________________________ James T. Anderson President (SEAL) By:__________________________ Charles J. Burdick Vice President and Treasurer CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated herein, issued under the Indenture described herein. FIRST NATIONAL BANK OF SANTA FE By CITIBANK, N.A., as Authenticating Agent By:___________________________ Authorized Officer GUARANTEE OF U S WEST, INC. FOR VALUE RECEIVED, U S WEST, INC., a corporation duly organized and existing under the laws of the State of Colorado (the "Guarantor"), hereby unconditionally guarantees to the holder of the Note upon which this Guarantee is endorsed the due and punctual payment of the principal of, premium, if any, and interest on said Note, when and as the same shall become due and payable, whether at maturity, upon redemption or repayment, or otherwise, according to the terms thereof and of the Indenture referred to therein. The Guarantor agrees to determine, at least one business day prior to the date upon which a payment of principal of, premium, if any, or interest on said Note is due and payable, whether U S WEST Capital Funding, Inc., a Colorado corporation (the "Company"), has available the funds to make such payment as the same shall become due and payable. In case of the failure of the Company punctually to pay any such principal, premium, if any, or interest, the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at maturity, upon redemption or repayment, or otherwise, and as if such payment were made by the Company. The Guarantor hereby agrees that its obligations hereunder shall be unconditional, irrevocable, and absolute, irrespective of the validity, regularity, or enforceability of said Note or said Indenture, the absence of any action to enforce the same, any waiver or consent by the holder of said Note with respect to any provisions thereof, the recovery of any judgment against the Company or any action to enforce the same, or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger or bankruptcy of the Company, any right to require a proceeding first against the Company, protest or notice with respect to said Note or indebtedness evidenced thereby, and all demands whatsoever and covenants that this Guarantee will not be discharged except by complete performance of the obligations contained in said Note and in this Guarantee. The Guarantor shall be subrogated to all rights of the holder of said Note against the Company in respect of any amounts paid by the Guarantor pursuant to the provisions of this Guarantee; provided, however, that the Guarantor shall not, without the consent of the holders of all of the Notes then outstanding, be entitled to enforce or to receive any payments arising out of, or based upon, such right of subrogation until the principal of and premium, if any, and interest on all Notes of the Company known as "Medium-Term Notes Due Nine Months or More from Date of Issue" shall have been paid in full or payment thereof shall have been provided for in accordance with said Indenture. Notwithstanding anything to the contrary contained herein, if following any payment of principal, premium, if any, or interest by the Company on the Notes to the holders of the Notes it is determined by a final decision of a court of competent jurisdiction that such payment shall be avoided by a trustee in bankruptcy (including any debtor-in-possession) as a preference under 11 U.S.C Section 547 and such payment is paid by such holder to such trustee in bankruptcy, then, and to the extent of such repayment, the obligations of the Guarantor hereunder shall remain in full force and effect. This Guarantee shall not be valid or become obligatory for any purpose with respect to a Note until the certificate of authentication of such Note shall have been signed by the Trustee or on its behalf by the Trustee's authenticating agent. This Guarantee shall be governed by the laws of the State of New York. IN WITNESS WHEREOF, U S WEST, Inc. has caused this Guarantee to be executed, manually or by facsimile, and its corporate seal or a facsimile of its corporate seal to be imprinted hereon. U S WEST, Inc. By:__________________________ James T. Anderson Acting Executive Vice President and Chief Financial Officer By:__________________________ Charles J. Burdick Vice President and Assistant Treasurer (SEAL) [REVERSE OF NOTE] U S WEST CAPITAL FUNDING, INC. MEDIUM_TERM NOTE (Floating Rate) This Note is one of a duly authorized series of Debt Securities (the "Debt Securities") of the Company issued and to be issued under an Indenture, dated as of April 15, 1988, as amended, modified or supplemented from time to time (the "Indenture"), among the Company, U S WEST, Inc., a Colorado corporation ("U S WEST"), and First National Bank of Santa Fe, as Trustee (the "Trustee", which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the holders of the Debt Securities, and of the terms upon which the Debt Securities are, and are to be, authenticated and delivered. Citibank, N.A. ("Citibank"), pursuant to an agreement with U S West Inc., and the Company dated October 13, 1995, will act as paying agent (the "Paying Agent") for the payment of principal, premium, if any, and interest on this Note, as well as the registrar (the "Security Registrar"). The Trustee has appointed Citibank as the authenticating agent (the "Authenticating Agent"), with respect to this Note. Citibank, as Paying Agent, Security Registrar and Authenticating Agent, together with any successors in such capacities, is hereinafter referred to as the "Issuing and Paying Agent". This Note is one of the series of Debt Securities designated as "Medium-Term Notes Due Nine Months or More From Date of Issue" (the "Notes"). All terms used but not defined in this Note specified on the face hereof or in an Addendum hereto shall have the meanings assigned to such terms in the Indenture. This Note is issuable only in registered form without coupons in minimum denominations of U.S.$1,000 and integral multiples thereof or the minimum Authorized Denomination specified on the face hereof. This Note will not be subject to any sinking fund and, unless otherwise provided on the face hereof in accordance with the provisions of the following two paragraphs, will not be redeemable or repayable prior to the Stated Maturity Date. This Note will be subject to redemption at the option of the Company on any date on and after the Initial Redemption Date, if any, specified on the face hereof, in whole or from time to time in part in increments of U.S.$1,000 or the minimum Authorized Denomination (provided that any remaining principal amount hereof shall be at least U.S.$1,000 or such minimum Authorized Denomination), at the Redemption Price (as defined below), together with unpaid interest accrued thereon to the date fixed for redemption (each, a "Redemption Date"), on notice given no more than 90 nor less than 30 calendar days prior to the Redemption Date and in accordance with the provisions of the Indenture. The "Redemption Price" shall initially be the Initial Redemption Percentage specified on the face hereof (as adjusted by the Annual Redemption Percentage Reduction, if any, specified on the face hereof) multiplied by the unpaid principal amount of this Note to be redeemed. The Initial Redemption Percentage shall decline at each anniversary of the Initial Redemption Date by the Annual Redemption Percentage Reduction, if any, specified on the face hereof until the Redemp-tion Price is 100% of unpaid principal amount to be redeemed. In the event of redemption of this Note in part only, a new Note of like tenor for the unredeemed portion hereof and otherwise having the same terms as this Note shall be issued in the name of the holder hereof upon the presentation and surrender hereof. This Note will be subject to repayment by the Company at the option of the holder hereof on the Optional Repayment Date(s), if any, specified on the face hereof, in whole or from time to time in part in increments of U.S.$1,000 or the minimum Authorized Denomination (provided that any remaining principal amount hereof shall be at least U.S.$1,000 or such minimum Authorized Denomination), at a repayment price equal to 100% of the unpaid principal amount to be repaid, together with unpaid interest accrued thereon to the relevant Optional Repayment Date. For this Note to be repaid, this Note must be received, together with the form hereon entitled "Option to Elect Repayment" duly completed, by the Issuing and Paying Agent at its corporate trust office not more than 60 nor less than 20 calendar days prior to the relevant Optional Repayment Date. Exercise of such repayment option by the holder hereof will be irrevocable. In the event of repayment of this Note in part only, a new Note of like tenor for the unrepaid portion hereof and otherwise having the same terms as this Note shall be issued in the name of the holder hereof upon the presentation and surrender hereof. If the Interest Category of this Note is specified on the face hereof as a Discount Note, the amount payable to the holder of this Note in the event of redemption, repayment or acceleration of maturity will be equal to (i) the Amortized Face Amount (as defined below) as of the date of such event, plus (ii) with respect to any redemption of this Note, the Initial Redemption Percentage specified on the face hereof (as adjusted by the Annual Redemption Percentage Reduction, if any, specified on the face hereof) minus 100% multiplied by the Issue Price specified on the face hereof (the "Issue Price"), net of any portion of such Issue Price which has been paid prior to the date of redemption, or the portion of the Issue Price (or the net amount) proportionate to the portion of the unpaid principal amount to be redeemed, plus (iii) any accrued interest to the date of such event the payment of which would constitute qualified stated interest payments within the meaning of Treasury Regulation 1.1273-1(c) under the Internal Revenue Code of 1986, as amended (the "Code"). The "Amortized Face Amount" of this Note, if the Interest Category of this Note is specified on the face hereof as a Discount Note, means an amount equal to (i) the Issue Price hereof plus (ii) the aggregate portions of the original issue discount (the excess of the amounts considered as part of the "stated redemption price at maturity" hereof within the meaning of Section 1273(a)(2) of the Code, whether denominated as principal or interest, over the Issue Price) which shall have accrued hereon pursuant to Section 1272 of the Code (without regard to Section 1272(a)(7) of the Code) from the date of issue of this Note to the date of determination, minus (iii) any amount considered as part of the "stated redemption price at maturity" hereof which has been paid from the date of issue to the date of determination. The interest rate borne by this Note will be determined as follows: (i) Unless the Interest Category of this Note is specified on the face hereof as a "Floating Rate/Fixed Rate Note", an "Inverse Floating Rate Note", an Original Issue Discount Note or as having an Addendum attached, this Note shall be designated as a "Regular Floating Rate Note" and, except as set forth below or on the face hereof, shall bear interest at the rate determined by reference to the applicable Interest Rate Basis or Bases (a) plus or minus the Spread, if any, and/or (b) multiplied by the Spread Multiplier, if any, in each case as specified on the face hereof. Commencing on the Initial Interest Reset Date, the rate at which interest on this Note shall be payable shall be reset as of each Interest Reset Date specified on the face hereof; provided, however, that the interest rate in effect for the period, if any, from the Original Issue Date to the Initial Interest Reset Date shall be the Initial Interest Rate. (ii) If the Interest Category of this Note is specified on the face hereof as a "Floating Rate/Fixed Rate Note", then, except as set forth below or on the face hereof, this Note shall bear interest at the rate determined by reference to the applicable Interest Rate Basis or Bases (a) plus or minus the Spread, if any, and/or (b) multiplied by the Spread Multiplier, if any. Commencing on the Initial Interest Reset Date, the rate at which interest on this Note shall be payable shall be reset as of each Interest Reset Date; provided, however, that (y) the interest rate in effect for the period, if any, from the Original Issue Date to the Initial Interest Reset Date shall be the Initial Interest Rate and (z) the interest rate in effect for the period commencing on the Fixed Rate Commencement Date specified on the face hereof to the Maturity Date shall be the Fixed Interest Rate specified on the face hereof or, if no such Fixed Interest Rate is specified, the interest rate in effect hereon on the day immediately preceding the Fixed Rate Commencement Date. (iii) If the Interest Category of this Note is specified on the face hereof as an "Inverse Floating Rate Note", then, except as set forth below or on the face hereof, this Note shall bear interest at the Fixed Interest Rate minus the rate determined by reference to the applicable Interest Rate Basis or Bases (a) plus or minus the Spread, if any, and/or (b) multiplied by the Spread Multiplier, if any; provided, however, that, unless otherwise specified on the face hereof, the interest rate hereon shall not be less than zero. Commencing on the Initial Interest Reset Date, the rate at which interest on this Note shall be payable shall be reset as of each Interest Reset Date; provided, however, that the interest rate in effect for the period, if any, from the Original Issue Date to the Initial Interest Reset Date shall be the Initial Interest Rate. Unless otherwise specified on the face hereof, the rate with respect to each Interest Rate Basis will be determined in accordance with the applicable provisions below. Except as set forth above or on the face hereof, the interest rate in effect on each day shall be (i) if such day is an Interest Reset Date, the interest rate determined as of the Interest Determination Date (as hereinafter defined) immediately preceding such Interest Reset Date or (ii) if such day is not an Interest Reset Date, the interest rate determined as of the Interest Determination Date immediately preceding the most recent Interest Reset Date. If any Interest Reset Date would otherwise be a day that is not a Business Day, such Interest Reset Date shall be postponed to the next succeeding Business Day, except that if LIBOR is an applicable Interest Rate Basis and such Business Day falls in the next succeeding calendar month, such Interest Reset Date shall be the immediately preceding Business Day. The "Interest Determination Date" with respect to the CD Rate, the CMT Rate, the Commercial Paper Rate, the Federal Funds Rate and the Prime Rate will be the second Business Day immediately preceding the applicable Interest Reset Date; the "Interest Determina-tion Date" with respect to the Eleventh District Cost of Funds Rate shall be the last working day of the month immediately preceding the applicable Interest Reset Date on which the Federal Home Loan Bank of San Francisco (the "FHLB of San Francisco") publishes the Index (as defined below); and the "Interest Determination Date" with respect to LIBOR shall be the second London Business Day immediately preceding the applicable Interest Reset Date, unless the Index Currency is British pounds sterling, in which case the "Interest Determination Date" will be the applicable Interest Reset Date. The "Interest Determination Date" with respect to the Treasury Rate shall be the day in the week in which the applicable Interest Reset Date falls on which day Treasury Bills (as defined below) are normally auctioned (Treasury Bills are normally sold at an auction held on Monday of each week, unless that day is a legal holiday, in which case the auction is normally held on the following Tuesday, except that such auction may be held on the preceding Friday); provided, however, that if an auction is held on the Friday of the week preceding the applicable Interest Reset Date, the "Interest Determination Date" shall be such preceding Friday; and provided, further, that if an auc-tion shall fall on any Interest Reset Date then the Interest Reset Date shall instead be the first Business Day following such auction. If the interest rate of this Note is determined with reference to two or more Interest Rate Bases specified on the face hereof, the "Interest Determination Date" pertaining to this Note shall be the most recent Business Day which is at least two Business Days prior to the applicable Interest Reset Date on which each Interest Rate Basis is determinable. Each Interest Rate Basis shall be determined as of such date, and the applicable interest rate shall take effect on the related Interest Reset Date. CD Rate. If an Interest Rate Basis for this Note is specified on the face hereof as the CD Rate, the CD Rate shall be determined as of the applicable Interest Determination Date (a "CD Rate Interest Determina-tion Date") as the rate on such date for negotiable United States dollar certificates of deposit having the Index Maturity specified on the face hereof as published by the Board of Governors of the Federal Reserve System in "Statistical Release H.15(519), Selected Interest Rates" or any successor publication ("H.15(519)") under the heading "CDs (Secondary Market)", or, if not published by 3:00 P.M., New York City time, on the related Calculation Date (as defined below), the rate on such CD Rate Interest Determina-tion Date for negotiable United States dollar certificates of deposit of the Index Maturity as published by the Federal Reserve Bank of New York in its daily statistical release "Composite 3:30 P.M. Quotations for United States Government Securities" or any successor publication ("Composite Quotations") under the heading "Certificates of Deposit". If such rate is not yet published in either H.15(519) or Composite Quotations by 3:00 P.M., New York City time, on the related Calculation Date, then the CD Rate on such CD Rate Interest Determination Date will be calculated by the Calculation Agent specified on the face hereof and will be the arithmetic mean of the secondary market offered rates as of 10:00 A.M., New York City time, on such CD Rate Interest Determination Date, of three leading nonbank dealers in negotiable United States dollar certificates of deposit in The City of New York selected by the Calculation Agent (after consultation with the Company) for negotiable United States dollar certificates of deposit of major United States money market banks for negotiable United States dollar certificates of deposit with a remaining maturity closest to the Index Maturity in an amount that is representative for a single transaction in that market at that time; provided, however, that if the dealers so selected by the Calcula-tion Agent are not quoting as mentioned in this sentence, the CD Rate determined as of such CD Rate Interest Determination Date will be the CD Rate in effect on such CD Rate Interest Determina-tion Date. CMT Rate. If an Interest Rate Basis for this Note is specified on the face hereof as the CMT rate, the CMT Rate shall be determined as of the applicable Interest Determination Date (a "CMT Rate Interest Determination Date") as the rate displayed on the Designated CMT Telerate Page (as defined below) under the caption "...Treasury Constant Maturities...Federal Reserve Board Release H.15...Mondays Approximately 3:45 P.M.", under the column for the Designated CMT Maturity Index (as defined below) for (i) if the Designated CMT Telerate Page is 7055, the rate on such CMT Rate Interest Determination Date and (ii) if the Designated CMT Telerate Page is 7052, the week, or the month, as applicable, ended immediately preceding the week in which the related CMT Rate Interest Determination Date occurs. If such rate is no longer displayed on the relevant page or is not displayed by 3:00 P.M., New York City time, on the related Calculation Date, then the CMT Rate on such CMT Rate Interest Determination Date will be such treasury constant maturity rate for the Designated CMT Maturity Index as published in the relevant H.15(519). If such rate is no longer published or is not published by 3:00 P.M., New York City time, on the related Calculation Date, then the CMT Rate on such CMT Rate Interest Determination Date will be such treasury constant maturity rate for the Designated CMT Maturity Index (or other United States Treasury rate for the Designated CMT Maturity Index) for the CMT Rate Interest Determination Date with respect to such Interest Reset Date as may then be published by either the Board of Governors of the Federal Reserve System or the United States Department of the Treasury that the Calculation Agent determines to be comparable to the rate formerly displayed on the Designated CMT Telerate Page and published in the relevant H.15(519). If such information is not provided by 3:00 P.M., New York City time, on the related Calculation Date, then the CMT Rate on the CMT Rate Interest Determination Date will be calculated by the Calculation Agent and will be a yield to maturity, based on the arithmetic mean of the secondary market closing offer side prices as of approximately 3:30 P.M., New York City time, on such CMT Rate Interest Determination Date reported, according to their written records, by three leading primary United States government securities dealers (each, a "Reference Dealer") in The City of New York selected by the Calculation Agent (from five such Reference Dealers selected by the Calculation Agent (after consultation with the Company) and eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest)), for the most recently issued direct noncallable fixed rate obligations of the United States ("Treasury Notes") with an original maturity of approximately the Designated CMT Maturity Index and a remaining term to maturity of not less than such Designated CMT Maturity Index minus one year. If the Calculation Agent is unable to obtain three such Treasury Note quotations, the CMT Rate on such CMT Rate Interest Determination Date will be calculated by the Calculation Agent and will be a yield to maturity based on the arithmetic mean of the secondary market offer side prices as of approximately 3:30 P.M., New York City time, on such CMT Rate Interest Determination Date of three Reference Dealers in The City of New York (from five such Reference Dealers selected by the Calculation Agent (after consultation with the Company) and eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest)), for Treasury Notes with an original maturity of the number of years that is the next highest to the Designated CMT Maturity Index and a remaining term to maturity closest to the Designated CMT Maturity Index and in an amount of at least U.S.$100 million. If three or four (and not five) of such Reference Dealers are quoting as described above, then the CMT Rate will be based on the arithmetic mean of the offer prices obtained and neither the highest nor the lowest of such quotes will be eliminated; provided, however, that if fewer than three Reference Dealers so selected by the Calculation Agent are quoting as mentioned herein, the CMT Rate determined as of such CMT Rate Interest Determination Date will be the CMT Rate in effect on such CMT Rate Interest Determination Date. If two Treasury Notes with an original maturity as described in the second preceding sentence have remaining terms to maturity equally close to the Designated CMT Maturity Index, the quotes for the Treasury Note with the shorter remaining term to maturity will be used. "Designated CMT Telerate Page" means the display on the Dow Jones Telerate Service on the page specified on the face hereof (or any other page as may replace such page on that service for the purpose of displaying Treasury Constant Maturities as reported in H.15(519)) for the purpose of displaying Treasury Constant Maturities as reported in H.15(519). If no such page is specified on the face hereof, the Designated CMT Telerate Page shall be 7052, for the most recent week. "Designated CMT Maturity Index" means the original period to maturity of the United States Treasury securities (either 1, 2, 3, 5, 7, 10, 20 or 30 years) specified on the face hereof with respect to which the CMT Rate will be calculated. If no such maturity is specified on the face hereof, the Designated CMT Maturity Index shall be 2 years. Commercial Paper Rate. If an Interest Rate Basis for this Note is specified on the face hereof as the Commercial Paper Rate, the Commercial Paper Rate shall be determined as of the applicable Interest Determination Date (a "Commercial Paper Rate Interest Determination Date") as the Money Market Yield (as defined below) on such date of the rate for commercial paper having the Index Maturity as published in H.15(519) under the heading "Commercial Paper". In the event that such rate is not published by 3:00 P.M., New York City time, on the related Calculation Date, then the Commercial Paper Rate on such Commercial Paper Rate Interest Determination Date will be the Money Market Yield of the rate for commercial paper having the Index Maturity as published in Composite Quotations under the heading "Commercial Paper" (with an Index Maturity of one month or three months being deemed to be equivalent to an Index Maturity of 30 days or 90 days, respectively). If such rate is not yet published in either H.15(519) or Composite Quotations by 3:00 P.M., New York City time, on the related Calculation Date, then the Commercial Paper Rate on such Commercial Paper Rate Interest Determination Date will be calculated by the Calculation Agent and shall be the Money Market Yield of the arithmetic mean of the offered rates at approximately 11:00 A.M., New York City time, on such Commercial Paper Rate Interest Determination Date of three leading dealers of commercial paper in The City of New York selected by the Calcula-tion Agent (after consultation with the Company) for commercial paper having the Index Maturity placed for an industrial issuer whose bond rating is "AA", or the equivalent from a nationally recognized statistical rating organization; provided, however, that if the dealers so selected by the Calculation Agent are not quoting as men-tioned in this sentence, the Commercial Paper Rate determined as of such Commercial Paper Rate Interest Determination Date will be the Commercial Paper Rate in effect on such Commercial Paper Rate Interest Determination Date. "Money Market Yield" means a yield (expressed as a percentage) calculated in accordance with the following formula: D x 360 Money Market Yield = ------------------------------ x 100 360 - (D x M) where "D" refers to the applicable per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal, and "M" refers to the actual number of days in the Interest Period for which interest is being calculated. Eleventh District Cost of Funds Rate. If an Interest Rate Basis for this Note is specified on the face hereof as the Eleventh District Cost of Funds Rate, the Eleventh District Cost of Funds Rate shall be determined as of the applicable Interest Determination Date (an "Eleventh District Cost of Funds Rate Interest Determination Date") as the rate equal to the monthly weighted average cost of funds for the calendar month immediately preceding the month in which such Eleventh District Cost of Funds Rate Interest Determination Date falls, as set forth under the caption "11th District" on Telerate Page 7058 as of 11:00 A.M., San Francisco time, on such Eleventh District Cost of Funds Rate Interest Determination Date. If such rate does not appear on Telerate Page 7058 on such Eleventh District Cost of Funds Rate Interest Determination Date, then the Eleventh District Cost of Funds Rate on such Eleventh District Cost of Funds Rate Interest Determination Date shall be the monthly weighted average cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank District that was most recently announced (the "Index") by the FHLB of San Francisco as such cost of funds for the calendar month immediately preceding such Eleventh District Cost of Funds Rate Interest Determination Date. If the FHLB of San Francisco fails to announce the Index on or prior to such Eleventh District Cost of Funds Rate Interest Determination Date for the calendar month immediately preceding such Eleventh District Cost of Funds Rate Interest Determination Date, the Eleventh District Cost of Funds Rate determined as of such Eleventh District Cost of Funds Rate Interest Determination Date will be the Eleventh District Cost of Funds Rate in effect on such Eleventh District Cost of Funds Rate Interest Determination Date. Federal Funds Rate. If an Interest Rate Basis for this Note is specified on the face hereof as the Federal Funds Rate, the Federal Funds Rate shall be determined as of the applicable Interest Determination Date (a "Federal Funds Rate Interest Determination Date") as the rate on such date for United States dollar federal funds as published in H.15(519) under the heading "Federal Funds (Effective)" or, if not pub-lished by 3:00 P.M., New York City time, on the Calculation Date, the rate on such Federal Funds Rate Interest Determination Date as published in Composite Quotations under the heading "Federal Funds/Effective Rate". If such rate is not published in either H.15(519) or Composite Quotations by 3:00 P.M., New York City time, on the related Calculation Date, then the Federal Funds Rate on such Federal Funds Interest Determination Date shall be calculated by the Calculation Agent and will be the arithmetic mean of the rates for the last transaction in overnight United States dollar federal funds arranged by three leading brokers of federal funds transactions in The City of New York selected by the Calculation Agent (after consultation with the Company), prior to 9:00 A.M., New York City time, on such Federal Funds Rate Interest Determi-nation Date; provided, however, that if the brokers so selected by the Calculation Agent are not quoting as mentioned in this sentence, the Federal Funds Rate determined as of such Federal Funds Rate Interest Determination Date will be the Federal Funds Rate in effect on such Federal Funds Rate Interest Determination Date. LIBOR. If an Interest Rate Basis for this Note is specified on the face hereof as LIBOR, LIBOR shall be determined by the Calculation Agent as of the applicable Interest Determination Date (a "LIBOR Interest Determination Date") in accordance with the following provisions: (i) if (a) "LIBOR Reuters" is specified on the face hereof, the arithmetic mean of the offered rates (unless the Designated LIBOR Page (as defined below) by its terms provides only for a single rate, in which case such single rate shall be used) for deposits in the Index Currency having the Index Maturity, commencing on the applicable Interest Reset Date, that appear (or, if only a single rate is required as aforesaid, appears) on the Designated LIBOR Page (as defined below) as of 11:00 A.M., London time, on such LIBOR Interest Determination Date, if at least two such offered rates appear (unless, as aforesaid, only a single rate is required) on such Designated LIBOR Page, or (b) if "LIBOR Telerate" is specified on the face hereof, or if neither "LIBOR Reuters" nor "LIBOR Telerate" is specified on the face hereof as the method for calculating LIBOR, the rate for deposits in the Index Currency having the Index Maturity specified on the face hereof, commencing on such Interest Reset Date, that appears on the Designated LIBOR Page as of 11:00 A.M., London time, on such LIBOR Interest Determination Date. If fewer than two such offered rates appear, or if no such rate appears, as applicable, LIBOR on such LIBOR Interest Determination Date shall be determined in accordance with the provisions described in clause (ii) below. (ii) With respect to a LIBOR Interest Determination Date on which fewer than two offered rates appear, or no rate appears, as the case may be, on the Designated LIBOR Page as specified in clause (i) above, the Calculation Agent shall request the principal London offices of each of four major reference banks in the London interbank market, as selected by the Calculation Agent (after consultation with the Company), to provide the Calculation Agent with its offered quotation for deposits in the Index Currency for the period of the Index Maturity, commencing on the applicable Interest Reset Date, to prime banks in the London interbank market at approximately 11:00 A.M., London time, on such LIBOR Interest Determination Date and in a principal amount that is representative for a single transaction in such Index Currency in such market at such time. If at least two such quotations are so provided, then LIBOR on such LIBOR Interest Determination Date will be the arithmetic mean of such quotations. If fewer than two such quotations are so provided, then LIBOR on such LIBOR Interest Determination Date will be the arithmetic mean of the rates quoted at approximately 11:00 A.M., in the applicable Principal Financial Center, on such LIBOR Interest Determination Date by three major banks in such Principal Financial Center selected by the Calculation Agent (after consultation with the Company) for loans in the Index Currency to leading European banks, having the Index Maturity and in a principal amount that is representative for a single transaction in such Index Currency in such market at such time; provided, however, that if the banks so selected by the Calculation Agent are not quoting as mentioned in this sentence, LIBOR determined as of such LIBOR Interest Determination Date shall be LIBOR in effect on such LIBOR Interest Determination Date. "Index Currency" means the currency or composite currency specified on the face hereof as to which LIBOR shall be calculated. If no such currency or composite currency is specified on the face hereof, the Index Currency shall be United States dollars. "Designated LIBOR Page" means (a) if "LIBOR Reuters" is specified on the face hereof, the display on the Reuter Monitor Money Rates Service (or any successor service) for the purpose of displaying the London interbank rates of major banks for the applicable Index Currency, or (b) if "LIBOR Telerate" is specified on the face hereof or neither "LIBOR Reuters" nor "LIBOR Telerate" is specified on the face hereof as the method for calculating LIBOR, the display on the Dow Jones Telerate Service (or any successor service) for the purpose of displaying the London interbank rates of major banks for the applicable Index Currency. Prime Rate. If an Interest Rate Basis for this Note is specified on the face hereto as the Prime Rate, the Prime Rate shall be determined as of the applicable Interest Determination Date (a "Prime Rate Interest Determination Date") as the rate on such date as such rate is published in H.15(519) under the heading "Bank Prime Loan". If such rate is not published prior to 3:00 P.M., New York City time, on the related Calculation Date, then the Prime Rate shall be the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen USPRIME1 (as defined below) as such bank's prime rate or base lending rate as in effect for such Prime Rate Interest Determination Date. If fewer than four such rates appear on the Reuters Screen USPRIME1 for such Prime Rate Interest Determination Date, then the Prime Rate shall be the arithmetic mean of the prime rates (quoted on the basis of the actual number of days in the year divided by a 360_day year) as of the close of business on such Prime Rate Interest Determination Date by four major money center banks in The City of New York selected by the Calculation Agent (after consultation with the Company). If fewer than four such quotations are so provided, the Prime Rate shall be the arithmetic mean of four prime rates quoted on the basis of the actual number of days in the year divided by a 360-day year as of the close of business on such Prime Rate Interest Determination Date as furnished in The City of New York by the major money center banks, if any, that have provided such quotations and by as many substitute banks or trust companies as are necessary to obtain such four prime rate quotations, provided such substitute banks or trust companies are organized and doing business under the laws of the United States, or any State thereof, each having total equity capital of at least U.S.$500 million and being subject to supervision or examination by Federal or State authority, selected by the Calculation Agent to provide such rate or rates; provided, however, that if the banks or trust companies so selected by the Calculation Agent are not quoting as mentioned in this sentence, the Prime Rate determined as of such Prime Rate Interest Determination Date will be the Prime Rate in effect on such Prime Rate Interest Determination Date. "Reuters Screen USPRIME1" means the display designated as page "USPRIME1" on the Reuter Monitor Money Rates Service (or such other page as may replace the USPRIME1 on that service for the purpose of displaying prime rates or base lending rates of major United States banks). Treasury Rate. If an Interest Rate Basis for this Note is specified on the face hereof as the Treasury Rate, the Treasury Rate shall be determined as of the applicable Interest Determination Date (a "Treasury Rate Interest Determination Date") as the rate from the auction held on such Treasury Rate Interest Determination Date (the "Auction") of direct obligations of the United States ("Treasury Bills") having the Index Maturity specified on the face hereof, as such rate is published in H.15(519) under the heading "Treasury Bills_auction average (investment)" or, if not published by 3:00 P.M., New York City time, on the related Calculation Date, the auction average rate of such Treasury Bills (expressed as a bond equivalent on the basis of a year of 365 or 366 days, as applic-able, and applied on a daily basis) as otherwise announced by the United States Department of the Treasury. In the event that the results of the Auction of Treasury Bills having the Index Maturity are not re-ported as provided by 3:00 P.M., New York City time, on the related Calculation Date, or if no such Auction is held, then the Treasury Rate shall be calculated by the Calcula-tion Agent and shall be a yield to maturity (expressed as a bond equivalent on the basis of a year of 365 or 366 days, as applicable, and applied on a daily basis) of the arithmetic mean of the secondary market bid rates, as of approximately 3:30 P.M., New York City time, on such Treasury Rate Interest Determination Date, of three leading pri-mary United States government securities dealers selected by the Calculation Agent (after consultation with the Company), for the issue of Treasury Bills with a remaining maturity closest to the Index Maturity; provided, however, that if the dealers so selected by the Calculation Agent are not quoting as mentioned in this sentence, the Treasury Rate determined as of such Treasury Rate Interest Determination Date will be the Treasury Rate in effect on such Treasury Rate Interest Determination Date. Notwithstanding the foregoing, the interest rate hereon shall not be greater than the Maximum Interest Rate, if any, or less than the Minimum Interest Rate, if any, specified on the face hereof. The interest rate on this Note will in no event be higher than the maximum rate permitted by New York law, as the same may be modified by United States law of general application. The Calculation Agent shall calculate the interest rate hereon in accordance with the foregoing on or before each Calcu-lation Date. The "Calculation Date", if applicable, pertaining to any Interest Determination Date shall be the earlier of (i) the tenth calendar day after such Interest Determination Date or, if such day is not a Business Day, the next succeeding Business Day or (ii) the Business Day immediately preceding the applicable Interest Payment Date or the Maturity Date, as the case may be. At the request of the Holder hereof, the Calculation Agent will provide to the Holder hereof the interest rate hereon then in effect and, if determined, the interest rate which will become effective as a result of a determination made for the next succeeding Interest Reset Date. Accrued interest here-on shall be an amount calculated by multiplying the principal amount hereof by an accrued interest factor. Such accrued interest factor shall be computed by adding the interest factor calcu-lated for each day in the applicable Interest Period. Unless otherwise specified as the Day Count Convention on the face hereof, the interest factor for each such date shall be computed by dividing the interest rate applicable to such day by 360 if the CD Rate, the Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the Federal Funds Rate, LIBOR or the Prime Rate is the applicable Interest Rate Basis or by the actual number of days in the year if the CMT Rate or the Treasury Rate is the applicable Interest Rate Basis. Unless otherwise specified as the Day Count Convention on the face hereof, the interest factor for this Note, if the interest rate is calculated with reference to two or more Interest Rate Bases, shall be calculated in each period in the same manner as if only the Applicable Interest Rate Basis specified on the face hereof applied. All percentages resulting from any calculation on this Note shall be rounded to the nearest one hundred_thousandth of a percentage point, with five one_millionths of a percentage point rounded upwards, and all amounts used in or resulting from such calculation on this Note shall be rounded, in the case of United States dollars, to the nearest cent or, in the case of a Specified Currency other than United States dollars, to the nearest unit (with one_half cent or unit being rounded upwards). If an Event of Default, as defined in the Indenture, shall occur and be continuing, the principal of the Notes may be declared due and payable in the manner and with the effect provided in the Indenture. The Indenture contains provisions for defeasance of (i) the entire indebtedness of the Notes or (ii) certain covenants and Events of Default with respect to the Notes, in each case upon compliance with certain conditions set forth therein, which provisions apply to the Notes. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and U S WEST and the rights of the holders of the Debt Securities at any time by the Company, U S WEST and the Trustee with the consent of the holders of not less than a majority of the aggregate principal amount of all Debt Securities at the time outstanding and affected thereby. The Indenture also contains provisions permit-ting the holders of not less than a majority of the aggregate principal amount of the outstanding Debt Securities of any series, on behalf of the holders of all such Debt Securities, to waive compliance by the Company with certain provisions of the Indenture. Furthermore, provisions in the Indenture permit the holders of not less than a majority of the aggregate principal amount of the outstanding Debt Securities of any series, in certain instances, to waive, on behalf of all of the holders of Debt Securities of such series, certain past defaults under the Indenture and their consequences. Any such consent or waiver by the holder of this Note shall be conclusive and binding upon such holder and upon all future holders of this Note and other Notes issued upon the registration of transfer hereof or in exchange herefore or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company or U S WEST, which is absolute and unconditional, to pay principal, premium, if any, and interest in respect of this Note or the Guarantee, respectively, at the times, places and rate of formula, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein and herein set forth, the transfer of this Note is registrable in the Security Register of the Company upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal hereof, premium, if any, or interest hereon are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the holder hereof or by his attorney duly authorized in writing, and thereupon one or more new Notes, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. As provided in the Indenture and subject to certain limitations therein and herein set forth, this Note is exchangeable for a like aggregate principal amount of Notes of different authorized denominations but otherwise having the same terms and conditions, as requested by the holder hereof surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Note for registration of transfer, the Company, the Issuing and Paying Agent and any agent of the Company or the Issuing and Paying Agent may treat the holder in whose name this Note is registered as the owner thereof for all purposes, whether or not this Note be overdue, and neither the Company, the Issuing and Paying Agent nor any such agent shall be affected by notice to the contrary. The Indenture and this Note shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed entirely in such State. _____________ ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Note, shall be construed as though they were written out in full according to applicable laws or regulations:
TEN COM _ as tenants in common UNIF GIFT MIN ACT _ ______ Custodian _____ TEN ENT _ as tenants by the entireties (Cust) (Minor) JT TEN _ as joint tenants with right of under Uniform Gifts to Minors Act survivorship and not as tenants in common ___________________________(State)
Additional abbreviations may also be used though not in the above list. __________________________________ FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE | |_____________________________|______________________________________________ _____________________________________________________________________________ Please print or typewrite name and address including postal zip code of assignee) ______________________________________________________________________________ the within Note and all rights thereunder hereby irrevocably constituting and appointing ____________________________________________________________________ Attorney to transfer said Note on the books of the Trustee, with full power of substitution in the premises. Dated:_____________________ ________________________________________________ ________________________________________________ Notice: The signature(s) on this assignment must correspond with the name(s) as written upon the face of the within Note in every particular, without alteration or enlargement or any change whatsoever. OPTION TO ELECT REPAYMENT The undersigned hereby irrevocably request(s) and instruct(s) the Company to repay this Note (or portion hereof specified below) pursuant to its terms at a price equal to 100% of the principal amount to be repaid, together with unpaid interest accrued hereon to the relevant Optional Repayment Date, to the undersigned, at ______________ _____________________________________________________________________________ ___________________ (Please print or typewrite name and address of the undersigned) For this Note to be repaid, the Issuing and Paying Agent must receive at its corporate trust office, not more than 60 nor less than 20 calendar days prior to the Optional Repayment Date, this Note with this "Option to Elect Repayment" form duly completed. If less than the entire principal amount of this Note is to be repaid, specify the portion hereof (which shall be increments of U.S.$1,000 (or, if the Specified Currency specified on the face hereof is other than United States dollars, the minimum Authorized Denomination specified on the face hereof)) which the holder elects to have repaid and specify the denomination or denominations (which shall be an Authorized Denomination) of the Notes to be issued to the holder for the portion of this Note not being repaid (in the absence of any such specification, one such Note will be issued for the portion not being repaid).
Principal Amount to be Repaid: $______________ _______________________________________ Notice: The signature(s) on this Date:_______________________ Option to Elect Repayment must correspond with the name(s) as written upon the face of the within Note in every particular, without alteration or enlargement or any change whatsoever.
EX-16 6 EXHIBIT 16 EXHIBIT 16 October 27, 1995 Securities and Exchange Commission 450 Fifth Street, N.W. Washington, D.C. 20549 Gentlemen: We have read the statements made by U S WEST, Inc., which we understand will be filed with the Commission, pursuant to Item 4 of Form 8-K, as part of the Company's Form 8-K report on October 27, 1995. We agree with the statements concerning our Firm in such Form 8-K. Very truly yours, /s/ COOPERS & LYBRAND L.L.P. EX-99 7 EXHIBIT 99A PRESS RELEASE U S WEST THIRD QUARTER EARNINGS 5 EXHIBIT 99A [U S WEST LOGO]
Release Date: October 27, 1995 Contact: Bruce Amundson (303) 793-6296 Becky Winning (303) 793-6367 Lois Leach (303) 793-6355
U S WEST REVENUES INCREASE 7.2 PERCENT; COMMUNICATIONS AND MEDIA GROUPS REPORT STRONG CUSTOMER GROWTH ENGLEWOOD, Colo. - Strong growth from its wireless operations combined with growing demand for telephone service in its 14-state region drove solid U S WEST third quarter results. Results for the quarter ending September 30 include: * REVENUES of $3 billion, a 7.2 percent increase compared with third quarter last year. * EBITDA - earnings before interest, taxes, depreciation and amortization - of $1.3 billion, a 9 percent increase compared with last year. * INCOME of $314 million, a 1 percent decrease from last year. * EARNINGS PER SHARE (EPS) of 67 cents, compared with 70 cents last year. All third quarter results exclude gains from the sale of rural exchanges, expenses associated with the creation of targeted stock, and an extraordinary loss resulting from the early retirement of debt. Results do, however, include the effects of acquisitions in 1994. "Our combined operations continue producing solid results," said Richard McCormick, U S WEST chairman and chief executive officer. "We believe that shareowner value will be further enhanced by our plan to create two targeted stocks. Based on the overwhelming shareowner support we've received so far, the stocks will begin trading on a 'when issued' basis today with distribution of the two stocks beginning on November 1." Under the company's targeted stock proposal, U S WEST Communications Group (NYSE:USW) will track the 14_state telecommunications business. It will continue paying dividends at the current rate. The other stock, U S WEST Media Group (NYSE:UMG), will track cable/telephony, wireless, and directory businesses globally. It will not pay a dividend. U S WEST COMMUNICATIONS GROUP U S WEST Communications Group reported record revenues, solid EBITDA growth and improved net income for the third quarter. Operational highlights for the quarter include: * REVENUES of $2.4 billion, a 3.2 percent increase compared with the same period last year. * EBITDA of $1.1 billion, a 6 percent increase from third quarter last year. * REPORTED INCOME of $287 million, an increase of 8 percent compared with the same quarter last year. Income includes gains associated with the sale of selected rural telephone exchanges, expenses associated with the creation of targeted stock and an extraordinary charge related to the early retirement of debt. Normalized for these one-time items, income was $276 million, a 3 percent increase over third quarter a year ago. * REPORTED EPS of 61 cents for the third quarter, a slight increase from EPS of 59 cents for the same period last year. EPS includes a gain of 4 cents associated with the sale of selected rural exchanges, expenses of 1 cent related to the creation of targeted stock, and an extraordinary charge of 1 cent related to the early retirement of debt. Normalized for these one-time items EPS was 59 cents, unchanged from the prior year. * SUBSCRIBER GROWTH - Excluding the sale of rural exchanges, the number of telephone access lines served increased by 4.2 percent compared with third quarter last year. U S WEST Communications Group now serves 14.7 million access lines. * BILLED MINUTES OF USE, an indicator of long-distance calling volume, grew by 10.3 percent when compared with third quarter last year. "Ongoing growth in our 14-state region and increasing demand for additional lines and services boosted top-line results in the third quarter," said Sol Trujillo, U S WEST Communications president and CEO. "We expect continued strong revenue growth as we explore new market opportunities and introduce new services to meet specific customer needs. "We're also pursuing aggressive initiatives to improve customer service," Trujillo said. "Increased labor and depreciation expenses related to these initiatives continue to dampen earnings growth. However, we expect our short-term investment in service quality to drive long-term improvements in growth and profits." Other U S WEST Communications Group highlights for the quarter include: * The launch of TeleChoice [Registered Trademark], an interactive video dial tone service currently in test in Omaha; and * The introduction of !NTERACT[Trademark], a new Internet-based desktop computer networking service for barrier-free business-to-business communications. U S WEST Communications Group provides telecommunications and high speed data services to more than 25 million customers in 14 western and midwestern states. U S WEST MEDIA GROUP Strong revenue and EBITDA growth highlight U S WEST Media Group third quarter results. For the quarter, Media Group reported proportionate revenues of $1.3 billion, a 17 percent increase from last year. Reported proportionate EBITDA for the quarter was $336 million, a 30 percent increase from last year. Adjusting for last year's purchase of MediaOne cable properties in Atlanta, proportionate revenue increased 12 percent and EBITDA grew 19 percent. "All the critical components of our long_term strategy - cable, wireless and directory publishing - continue outperforming their peer groups in several key areas," said Chuck Lillis, U S WEST Media Group president and CEO. "I'm particularly pleased with the performance of our domestic wireless and cable operations. U S WEST Cellular continues to lead the industry in subscriber, revenue and EBITDA growth. Meanwhile, MediaOne is growing its subscriber base at twice the cable industry average. Furthermore, we continue seeing improved operational results from our international businesses which demonstrates their long_term potential." Results for individual lines of business include the following highlights. CABLE AND TELEPHONY In DOMESTIC CABLE-TV markets, Media Group reaches nearly 9.6 million subscribers. This line of business continues to exhibit strong subscriber, revenue and EBITDA growth compared with third quarter last year. In addition to a strong performance in the Time Warner Entertainment (TWE) partnership, MediaOne increased subscribers by more than 7 percent and generated $26 million in EBITDA for a 46 percent margin. In INTERNATIONAL CABLE-TV markets, Media Group continues increasing its international customer base. It now serves 1.7 million subscribers at the venture level. On October 2, TeleWest, a combined cable-TV and telephone venture in the United Kingdom, completed its merger with SBC CableComms. This creates the world's largest independent cable and telephony operator with interests in 31 franchises covering 4.1 million homes. WIRELESS In DOMESTIC WIRELESS markets, U S WEST Cellular continues producing record EBITDA coupled with strong customer growth. * EBITDA was $85 million, a 49 percent increase compared with third quarter 1994. * EBITDA margin for the quarter was 38 percent compared with 34 percent for the same period last year. * U S WEST Cellular added 104,000 customers during the quarter. The company now serves a customer base of 1.3 million, a 55 percent increase from third quarter last year. This strong subscriber growth contributed to a 32 percent increase in cellular revenues. During the quarter, U S WEST and AirTouch Communications (NYSE: ATI) announced completion of the first phase of their merger. Effective Nov. 1, the companies will establish a joint venture management company to support their combined cellular businesses in 16 of the nation's top 30 markets. Subscribers to INTERNATIONAL WIRELESS joint ventures more than doubled from a year ago to 589,000. Media Group operates wireless joint ventures in the United Kingdom, Hungary, the Czech Republic, Slovakia and Russia. In August, Media Group began operating the first Global System for Mobile Communications (GSM) cellular phone network in Malaysia. DIRECTORY AND INFORMATION SERVICES Media Group's DIRECTORY PUBLISHING BUSINESS, U S WEST Direct reported revenues of $257 million, a 7 percent increase from third quarter last year. EBITDA was $128 million, a 7 percent increase from third quarter last year. Media Group also operates directory publishing companies in Brazil, Poland and the United Kingdom. U S WEST Media Group operates three lines of businesses - cable and telephony, wireless, and directory and information services - in local markets around the world. # # # EX-99 8 EXHIBIT 99A.1 EXHIBIT 99A.1 CONSOLIDATED STATEMENTS OF U S WEST, Inc. INCOME (UNAUDITED)
Quarter Ended Nine Months Ended September 30, % September 30, % In millions 1995 1994 Change 1995 1994 Change - ---------------------- ------- ------- ------ ------- ------- ------ SALES & OTHER REVENUES $2,964 $2,765 7.2 $8,686 $8,114 7.0 EXPENSES Employee-related 1,007 968 4.0 2,982 2,822 5.7 Other operating 592 532 11.3 1,661 1,527 8.8 Taxes other than income taxes 103 109 (5.5) 330 322 2.5 Depreciation & amort. 573 509 12.6 1,695 1,519 11.6 Interest expense 137 104 31.7 404 323 25.1 Equity losses in unconsol. ventures 38 26 46.2 128 83 54.2 Gains on asset sales: Rural tele. exchanges 34 - - 112 48 - Paging assets - - - - 68 - Guaranteed minority interest expense 2 - - 2 - - Other income (expense)- net (8) (3) - (6) 11 - -------- ------ -------- ------- Income before income taxes and extra- ordinary item 538 514 4.7 1,590 1,645 (3.3) Income taxes 213 196 8.7 617 628 (1.8) -------- ------ ------- ------ Income before extra- ordinary item 325 318 2.2 973 1,017 (4.3) Extraordinary item: Early extinguishment of debt, net of tax (9) - - (9) - - -------- ------- ------- ------ NET INCOME 316 318 (0.6) 964 1,017 (5.2) Preferred dividends 1 - - 3 - - -------- ------- ------- ------ EARNINGS AVAILABLE FOR COMMON STOCK $315 $318 (0.9) $961 $1,017 (5.5) ======== ======= ======= ====== Average common shares outstanding 471.2 455.0 3.6 470.1 451.0 4.2 ======== ======= ======= ======
Note: Certain reclassifications within the financial statements have been made to conform to the current year presentation. EXHIBIT 99A.1 (continued) CONSOLIDATED STATEMENTS OF U S WEST, Inc. INCOME (UNAUDITED)
Quarter Ended Nine Months Ended September 30, % September 30, % 1995 1994 Change 1995 1994 Change - ---------------------- ------ ------- ------- ------ ------- ------ Earnings per common share: Income available $0.69 $0.70 (1.4) $2.06 $2.25 (8.4) for common stock before extraordinary item Extraordinary item (0.02) - - (0.02) - - ------- ------- ------- -------- EARNINGS PER COMMON SHARE $0.67 $0.70 (4.3) $2.04 $2.25 (9.3) ======= ======= ======= ========
EX-99 9 EXHIBIT 99A.2 EXHIBIT 99A.2
CONSOLIDATED BALANCE SHEETS U S WEST, Inc. (UNAUDITED) September 30, December 31, In millions 1995 1994 - --------------------------------------- ------------- ----------- ASSETS Current assets: Cash and cash equivalents $108 $209 Accounts and notes receivable 1,932 1,693 Inventories and supplies 248 189 Deferred tax asset 339 352 Prepaid and other 310 323 ------------ ------------ Total current assets 2,937 2,766 ------------ ------------ Property, plant and equipment - net 14,342 13,997 Investment in Time Warner Entertainment 2,501 2,522 Intangible assets - net 1,824 1,858 Investment in international ventures 1,361 881 Net investment in assets held for sale 418 302 Other assets 1,378 878 ------------ ----------- Total assets $24,761 $23,204 ============ =========== LIABILITIES AND SHAREOWNERS' EQUITY Current liabilities: Short-term debt $3,640 $2,837 Accounts payable 859 944 Employee compensation 408 367 Dividends payable 253 251 Current portion of restructuring charges 348 337 Other 1,428 1,278 ------------ ------------ Total current liabilities 6,936 6,014 ------------ ------------ Long-term debt 5,144 5,101 Postretirement and other postemployment benefit obligations 2,372 2,502 Deferred taxes, credits and other 1,894 2,154 Guaranteed minority interest in trust holding subordinated debentures of subsidiary 600 - Preferred stock subject to mandatory redemption 51 51 Common shareowners' equity: Common shares 8,161 8,056 Cumulative deficit (223) (458) LESOP guarantee (157) (187) Foreign currency translation adjustments (17) (29) ------------- ----------- Total common shareowners' equity 7,764 7,382 ------------- ----------- Total liabilities and shareowners' equity $24,761 $23,204 ============= ===========
EX-99 10 EXHIBIT 99A.3 EXHIBIT 99A.3
CONSOLIDATED STATEMENTS OF CASH FLOWS U S WEST, Inc. (UNAUDITED) Nine Months Ended September 30, In millions 1995 1994 - ------------------------------------------------ ----------- ------- OPERATING ACTIVITIES Net income $964 $1,017 Adjustments to net income: Depreciation and amortization 1,695 1,519 Postretire. med. & life costs, net of cash fundings (86) (13) Gains on sales of assets: Rural telephone exchanges (112) (48) Paging assets - (68) Equity losses in unconsolidated ventures 128 83 Deferred income taxes and amortization of investment tax credits 93 181 Changes in operating assets and liabilities: Restructuring payments (268) (167) Accounts and notes receivable (219) (173) Inventories, supplies and other (81) (42) Accounts payable and accrued liabilities 108 111 Other - net 21 (66) - --------------------------------------------------- --------- ------ Cash provided by operating activities 2,243 2,334 - --------------------------------------------------- --------- ------ INVESTING ACTIVITIES Expenditures for property, plant & equip. (1,963) (1,948) Investment in international ventures (576) (214) Proceeds from disposals of property, plant & equip. 166 49 Cash (to) net investment in assets held for sale (108) - Proceeds from sale of paging assets - 143 Other - net (274) (97) - ---------------------------------------------------- ------- ------- Cash (used) for investing activities (2,755) (2,067) - ---------------------------------------------------- ------- ------- FINANCING ACTIVITIES Net proceeds from short-term debt 688 403 Proceeds from issuance of long-term debt 499 251 Repayments of long-term debt (640) (408) Proceeds from issuance of trust originated preferred securities 581 - Dividends paid on common stock (697) (663) Proceeds from issuance of common stock 43 329 Proceeds from issuance of preferred stock - 50 Purchase of treasury stock (63) - - ---------------------------------------------------- ------- ------- Cash provided by (used for) financing activities 411 (38) - ---------------------------------------------------- ------- ------- Cash (used for) provided by continuing operations (101) 229 - ---------------------------------------------------- ------- ------- Cash (to) discontinued operations - (59) - ---------------------------------------------------- ------- ------- CASH AND CASH EQUIVALENTS (Decrease) Increase (101) 170 Beginning balance 209 128 - ---------------------------------------------------- ------- ------- Ending balance $108 $298 ==================================================== ======= =======
Note: Certain reclassifications within the financial statements have been made to conform to the current year presentation. EX-99 11 EXHIBIT 99A.4 EXHIBIT 99A.4
COMBINED STATEMENTS OF INCOME U S WEST COMMUNICATIONS Group (UNAUDITED) Quarter Ended Nine Months Ended September 30, % September 30, % In millions 1995 1994 Change 1995 1994 Change - --------------------- -------- ------- ------ ------- ------- ------ OPERATING REVENUES Local service $1,105 $1,034 6.9 $3,231 $3,035 6.5 Interstate access 594 573 3.7 1,774 1,691 4.9 Intrastate access 186 188 (1.1) 558 541 3.1 Long-distance network 298 323 (7.7) 891 1,019 (12.6) Other services 206 198 4.0 591 564 4.8 -------- ------ ------ ------- Total operating revenue 2,389 2,316 3.2 7,045 6,850 2.8 -------- ------ ------ ------- OPERATING EXPENSES Employee-related 835 828 0.8 2,479 2,411 2.8 Other operating 404 389 3.9 1,099 1,123 (2.1) Taxes other than income taxes 95 102 (6.9) 306 301 1.7 Depreciation & amort. 513 476 7.8 1,514 1,420 6.6 -------- ------ ------- ------- Total operating expenses 1,847 1,795 2.9 5,398 5,255 2.7 -------- ------ ------- ------- Income from operations 542 521 4.0 1,647 1,595 3.3 Interest expense 108 94 14.9 315 277 13.7 Gain on sales of rural telephone exchanges 34 - - 112 48 - Other expense - net 14 5 - 30 21 42.9 -------- ------- ------- ------- Income before income taxes and extraordinary item 454 422 7.6 1,414 1,345 5.1 Income taxes 162 155 4.5 514 494 4.0 -------- ------- ------- ------- Income before extra- ordinary item 292 267 9.4 900 851 5.8 Extraordinary item: Early extinguishment of debt, net of tax (5) - - (5) - - -------- ------- ------- ------- NET INCOME $287 $267 7.5 $895 $851 5.2 ======== ======= ======= ======= Pro forma average shares outstanding 471.2 455.0 3.6 470.1 451.0 4.2 ======== ======= ======= =======
Note: Certain reclassifications within the financial statements have been made to conform to the current year presentation. EXHIBIT 99A.4 (continued)
COMBINED STATEMENTS OF INCOME U S WEST COMMUNICATIONS Group (UNAUDITED) Quarter Ended Nine Months Ended September 30, % September 30, % 1995 1994 Change 1995 1994 Change - --------------------- -------- ------- ------ ------- ------- ------ Pro forma earnings per share: Income before $0.62 $0.59 5.1 $1.91 $1.89 1.1 extraordinary item Extraordinary item (0.01) - - (0.01) - - ------- ------- ------ ------- Pro forma earnings $0.61 $0.59 3.4 $1.90 $1.89 0.5 per share ======= ======= ====== =======
EX-99 12 EXHIBIT 99A.5 EXHIBIT 99A.5
SELECTED COMBINED GROUP DATA U S WEST COMMUNICATIONS Group (UNAUDITED) Dollars in Quarter Ended Nine Months Ended millions, except September 30, % September 30, % per share amounts 1995 1994 Change 1995 1994 Change - ----------------- --------- ------- ------ ------- ------- ------ EBITDA (#1) $1,055 $997 5.8 $3,161 $3,015 4.8 EBITDA margin 44.2% 43.0% - 44.9% 44.0% - Capital expenditures $730 $638 14.4 $1,923 $1,756 9.5 Return on equity (#2) 36.2% 36.6% - 37.2% 38.9% - Debt-to-capital ratio 67.6% 65.8%# - 67.6% 65.8%# - Employees: Communications Grp 50,849 52,161 (2.5) 50,849 52,161 (2.5) Telephone operations only 47,868 48,315 (0.9) 47,868 48,315 (0.9) Pro forma dividends per share $0.535 $0.535 - $1.605 $1.605 - Access lines (thousands) (#3): Business 4,230 4,019 5.3 4,230 4,019 5.3 Consumer 10,440 10,156 2.8 10,440 10,156 2.8 Total access lines 14,670 14,175 3.5 14,670 14,175 3.5 Billed access minutes of use (millions): Interstate 12,027 10,930 10.0 35,501 32,437 9.4 Intrastate 2,404 2,159 11.3 6,988 6,282 11.2 Total minutes of use 14,431 13,089 10.3 42,489 38,719 9.7 # As of December 31, 1994 # 1: Earnings before interest, taxes, depreciation, amortization, and other (EBITDA). EBITDA also excludes gain on asset sales. # 2: Based on income before extraordinary item. # 3: Access line growth excluding rural exchange sales was 4.2%.
EX-99 13 EXHIBIT 99A.6 EXHIBIT 99A.6
COMBINED STATEMENTS OF INCOME U S WEST MEDIA Group (UNAUDITED) Quarter Ended Nine Months Ended September 30, % September 30,% In millions 1995 1994 Change 1995 1994 Change - ----------------------- ----- ------- ------- ------ ------ ----- SALES AND OTHER REVENUES $604 $482 25.3 $1,725 $1,359 26.9 EXPENSES Costs of sales and other revenues 193 161 19.9 539 433 24.5 Selling, general and administrative 204 162 25.9 634 498 27.3 Depreciation & amort. 60 33 81.8 181 99 82.8 Interest expense 29 10 - 89 46 93.5 Equity losses in unconsol. ventures 38 26 46.2 128 83 54.2 Gain on sale of paging assets - - - - 68 - Guaranteed minority interest expense 2 - - 2 - - Other income - net 6 2 - 24 32 (25.0) ------ ----- ------- ----- Income before income taxes and extra- ordinary item 84 92 (8.7) 176 300 (41.3) Income taxes 51 41 24.4 103 134 (23.1) ------ ----- ------- ----- Income before extra- ordinary item 33 51 (35.3) 73 166 (56.0) Extraordinary item: Early extinguishment of debt, net of tax (4) - - (4) - - ------ ----- ------- ----- - - NET INCOME 29 51 (43.1) 69 166 (58.4) Preferred dividends 1 - - 3 - - ------ ----- ------- ----- - - EARNINGS AVAILABLE FOR COMMON STOCK $28 $51 (45.1) $66 $166 (60.2) ====== ===== ======= ====== Pro forma average shares outstanding 471.2 455.0 3.6 470.1 451.0 4.2 ====== ===== ======= ======
Note: Certain reclassifications within the financial statements have been made to conform to the current year presentation.
COMBINED STATEMENTS OF INCOME U S WEST MEDIA Group (UNAUDITED) Quarter Ended Nine Months Ended September 30, % September 30, % 1995 1994 Change 1995 1994 Change - ------------------ ---- ------- ------- ------ ------- ------ Pro forma earnings per common share: Income available $0.07 $0.11 (36.4) $0.15 $0.37 (59.5) for common stock before extraordi- nary item Extraordinary item (0.01) - - (0.01) - - ------ ------- ------ ------ Pro forma earnings per common share $0.06 $0.11 (45.5) $0.14 $0.37 (62.2) ====== ======= ====== ======
EX-99 14 EXHIBIT 99A.7 EXHIBIT 99A.7
SELECTED COMBINED GROUP DATA U S WEST MEDIA Group (UNAUDITED) Dollars in millions; Quarter Ended Nine Months Ended statistics in September 30, % September 30, % thousands 1995 1994 Change 1995 1994 Change - ----------------- ------- ------- ------- ------- ------- ------ MediaOne (Atlanta Cable) #1 Basic subscribers served 517 481 7.5 517 481 7.5 Homes passed 840 802 4.7 840 802 4.7 Basic penetration 61.5% 60.0% - 61.5% 60.0% - U S WEST NewVector (Wireless) Service revenue $222.7 $168.2 32.4 $615.4 $454.0 35.6 Equipment revenue $22.9 $29.8 (23.2) $60.3 $80.8 (25.4) EBITDA (#2) $84.6 $56.9 48.7 $217.2 $137.8 57.6 EBITDA margin 38.0% 33.8% - 35.3% 30.4% - Cellular subscribers (consolidated) 1,269 821 54.6 1,269 821 54.6 Total POPS (managed) 19,500 18,000 8.3 19,500 18,000 8.3 U S WEST Direct (Yellow Pages) Revenues $257.2 $239.8 7.3 $760.6 $710.2 7.1 EBITDA $127.6 $119.3 7.0 $383.7 $353.9 8.4 Net income $74.7 $70.0 6.7 $224.5 $207.4 8.2 Advertisers 473 466 1.5 473 466 1.5 # 1: U S WEST acquired the Atlanta cable properties on December 6, 1994. The 1994 data is presented for comparative purposes only. # 2: Earnings before interest, taxes, depreciation, amortization, and other (EBITDA). EBITDA also excludes gains on asset sales, equity losses and guaranteed minority interest expense.
Note: Certain reclassifications have been made to conform to the current year presentation. EX-99 15 EXHIBIT 99A.8 EXHIBIT 99A.8
SELECTED PROPORTIONATE DATA U S WEST MEDIA Group (UNAUDITED) (1)(2) Cable and Media Content Dollars in Telecomm. Wireless and Services Total millions Dom.(3) Int'l Dom. Int'l Dom. Int'l - ----------------- -------- ------ ------ ------ ------ ------ ------ QTR Ended September 30, 1995 Revenues $655 $26 $223 $66 $267 $28 $1,265 EBITDA 162 (11) 77 - 111 (3) 336 Net income (loss) (14) (23) 23 (16) 65 (6) 29 Subscribers (thousands) 2,825 599 1,162 271 NA NA 4,857 QTR Ended September 30, 1994 (4) Revenues $566 $21 $166 $52 $248 $31 $1,084 EBITDA 123 (13) 48 (15) 108 7 258 Net income (loss) (1) (14) 15 (12) 63 - 51 Subscribers (thousands) 2,349 232 694 124 NA NA 3,399 YTD September 30, 1995 Revenues $1,906 $82 $584 $200 $791 $72 $3,635 EBITDA 440 (34) 189 (25) 322 (7) 885 Net income (loss) (46) (36) 54 (76) 184 (11) 69 YTD September 30, 1994 (4) Revenues $1,589 $64 $479 $121 $738 $42 $3,033 EBITDA 343 (33) 125 (38) 318 5 720 Net income (loss) (15) (32) 69 (47) 193 (2) 166 (1) Proportionate data reflects the Media Group's relative ownership interest in revenues and EBITDA for both its consolidated and equity method entities. Proportionate data is not required by GAAP or intended to replace the Combined Financial Statements prepared in accordance with GAAP. (2) Proportionate revenue and EBITDA results do not include certain international investments in various stages of start-up for which the Media Group does not receive detailed income statements on a timely basis. Net loss related to the excluded investments is $6 and $13 for the quarter and nine months ended September 30, 1995. (3) Includes the Media Group's 25.51 percent pro-rata priority and residual equity interests in reported TWE results. (4) Results do not include the Atlanta cable properties which U S WEST Inc. acquired in December 1994. 1994 results include the paging operation which was sold in the 2nd quarter. Paging revenue, EBITDA and net income for the nine months was $28, $11 and $44.
EX-27 16 FINANCIAL DATA SCHEDULE
5 0000732718 U S WEST, INC. 1,000,000 3-MOS 9-MOS DEC-31-1995 DEC-31-1995 JUL-31-1995 JAN-01-1995 SEP-30-1995 SEP-30-1995 108 180 0 0 1,932 1,932 0 0 248 248 2,937 2,937 32,278 32,278 17,936 17,936 24,761 24,761 6,936 6,936 5,144 5,144 8,161 8,161 51 51 0 0 (397) (397) 24,761 24,761 2,964 8,686 2,964 8,686 0 0 0 0 2,275 6,668 0 0 137 404 538 1,590 213 617 325 973 0 0 (9) (9) (0) 0 316 964 .67 2.04 .67 2.04
-----END PRIVACY-ENHANCED MESSAGE-----