-----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, Efio3D4K/3N3AdIkBULcki6771spG/pOwdENAOlhS/M8ZMeJsByjLC1xGXPsMVh4 ryNY0jxSGKB3CrqI0w+e/Q== 0000732718-98-000009.txt : 19980515 0000732718-98-000009.hdr.sgml : 19980515 ACCESSION NUMBER: 0000732718-98-000009 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 15 CONFORMED PERIOD OF REPORT: 19980331 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980505 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: US WEST INC CENTRAL INDEX KEY: 0000732718 STANDARD INDUSTRIAL CLASSIFICATION: 4813 IRS NUMBER: 840926774 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-08611 FILM NUMBER: 98610586 BUSINESS ADDRESS: STREET 1: 7800 E ORCHARD RD STREET 2: STE 480 CITY: ENGLEWOOD STATE: CO ZIP: 80111 BUSINESS PHONE: 3037936500 MAIL ADDRESS: STREET 1: 7800 EAST ORCHARD ROAD STREET 2: SUITE 480 CITY: ENGLEWOOD STATE: CO ZIP: 80111 8-K 1 FIRST QUARTER EARNINGS UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): April 24, 1998 U S WEST, Inc. (Exact name of registrant as specified in its charter)
A Delaware Corporation Commission File IRS Employer Identification (State of incorporation) Number 1-8611 No. 84-0926774
7800 East Orchard Road, Englewood, Colorado 80111 (Address of principal executive offices) Telephone Number (303) 793-6500 (Registrant's telephone number, including area code) Item 5. Other Events On April 24 1998, U S WEST Communications Group released its first quarter earnings results. In addition, U S WEST Media Group released its first quarter earnings results on April 29, 1998. The releases and financial statements are attached hereto as Exhibits. On May 1, 1998, Doug Holmes, MediaOne Executive Vice President - Finance, Strategy and Business Development, was named MediaOne Group Executive Vice President - Strategy and Business Development. He will report to MediaOne Group President and CEO Chuck Lillis and be responsible for integrating strategy, technology and business development activities across the corporation. As part of this, he will lead a more aggressive effort to identify and develop new business opportunities for MediaOne Group. Mr. Holmes has been a Vice President of U S WEST since 1995 and has held a variety of positions at U S WEST since 1990. Age 37.
Item 7. Exhibits Exhibit Description 27 Financial Data Schedule. 99A Press Release issued April 25, 1998 concerning the earnings results of U S WEST Communications Group for the first quarter of 1998. 99A.1 Unaudited Combined Statements of Income of U S WEST Communications Group for the quarters ended March 31, 1997 and 1998, filed in connection with the Press Release dated April 24, 1998. 99A.2 Unaudited Selected Combined Group Data of U S WEST Communications Group for the quarters ended March 31, 1997 and 1998, filed in connection with the Press Release dated April 24, 1998. 99A.3 Unaudited Combined Balance Sheets of U S WEST Communications Group for the quarter ended March 31, 1998 and the year ended December 31, 1997, filed in connection with the Press Release dated April 24, 1998. 99A.4 Unaudited Combined Statements of Cash Flows of U S WEST Communications Group for the quarters ended March 31, 1997 and 1998, filed in connection with the Press Release dated April 24, 1998. 99B Press Release issued April 29, 1998 concerning the earnings results of U S WEST Media Group for the first quarter of 1998. 99B.1 Unaudited Combined Statements of Operations of U S WEST Media Group for the quarters ended March 31, 1998 and 1997, filed in connection with the Press Release dated April 29, 1998. 99B.2 Unaudited Combined Balance Sheets of U S WEST Media Group for the quarter ended March 31, 1998 and the year ended December 31, 1997, filed in connection with the Press Release dated April 29, 1998. 99B.3 Unaudited Selected Data of U S WEST Media Group for the quarters ended March 31, 1997 and 1998, filed in connection with the Press Release dated April 29, 1998. 99B.4 Unaudited Selected Financial and Domestic Cable and Broadband Operating Highlights of U S WEST Media Group for the quarters ended March 31, 1997 and 1998, filed in connection with the Press Release dated April 29, 1998. 99B.5 Unaudited Selected Financial Data of U S WEST Media Group for the quarters ended March 31, 1997 and 1998, filed in connection with the Press Release dated April 29, 1998. 99C.1 Unaudited Consolidated Statements of Income of U S WEST, Inc. for the quarter periods ended March 31, 1997 and 1998. 99C.2 Unaudited Consolidated Balance Sheets of U S WEST, Inc. for the quarter ended March 31, 1998 and the year ended December 31, 1997.
SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. U S WEST, Inc. /s/ STEPHEN E. BRILZ By:__________________________ Stephen E. Brilz Assistant Secretary Dated: May 5, 1998 EX-99 2 EXHIBIT 99A April 24, 1998 Larry Thede 303-896-3550 Rodney Miller 303-896-3096 Hadley Evans 303-896-5706 U S WEST COMMUNICATIONS ANNOUNCES EPS GROWTH OF 6.0 PERCENT IN FIRST QUARTER Core Telecommunications Business and New High-Speed Data Services Deliver Double-Digit Growth - ENGLEWOOD, Colo. - U S WEST Communications Group (NYSE: USW) today announced first quarter normalized, diluted earnings per share of $.71, up 6.0 percent from first quarter, 1997. The results were driven primarily by near double-digit local service revenue growth, including near 50-percent growth in its !NTERPRISE data services division, and by continued cost controls. Overall revenue growth was 4.8 percent, impacted by the effects of federally mandated access charge reform and rate reductions in the state of Washington. The company achieved the 6.0 percent EPS growth while continuing to absorb significant costs related to expansion of new growth businesses, and while absorbing expenses associated with mandated interconnection and number portability. "I'm pleased with where we are financially and operationally," said Sol Trujillo, president and chief executive officer of U S WEST Communications Group. "We're on plan with everything we committed to earlier this year." "U S WEST Communications is in strong financial position for the impending split of our two businesses which will create 'the new U S WEST'," said Richard McCormick, chairman and chief executive officer of U S WEST, Inc. U S WEST shareholders will vote on the split proposal which would create the new U S WEST at the company's annual meeting on June 4 in New York City. "As we are about to become the new U S WEST, I'm excited about the tremendous growth opportunities we have in front of us," said Trujillo. "We've filed for long-distance entry and are meeting competitive requirements. We're in the process of rolling out our high-speed DSL data services throughout our region - - - a rollout that will continue through the summer. We continue to expand availability of our one-number PCS service. In short, we're executing on our strategies." Trujillo said he was also pleased with the strength of the company's core telecommunications business, which continues to grow at double-digit rates. That growth is being fueled by initiatives such as the highly successful first quarter Caller ID campaign in which the company sold nearly 850,000 units. Residential Caller ID penetration is now 30.9 percent. Quarterly results were impacted by: accelerated spending resulting from the aggressive rollout of the company's first-in-the-nation "one-number" PCS wireless services to two additional major metro markets - Phoenix and Tucson, Ariz.; introduction of the first commercial high-speed DSL product; and spending of approximately $90 million for mandated interconnection and number portability to help foster local competition. During the quarter, the company saw continuing impacts from competition in its local telephony business. It now has re-sold more than 131,000 lines to competitors. Other first quarter highlights include: New Product Initiatives: The rollout of U S WEST's Access2 Advanced PCS wireless service in Phoenix on Feb. 3. In addition, the company introduced Access2 in Tucson, Ariz. on April 6, which brings the total number of cities with this service to eight. Coverage is now at 6.5 million POPs - more than 20 percent of the population in U S WEST's 14 states. In January, the company announced plans to introduce its high-speed, MegaBit Services ADSL (Asymmetric Digital Subscriber Line) access and U S WEST.net Internet service to 5.5 million customer lines in more than 40 cities throughout its territory by mid-1998. In January and February, U S WEST announced partnerships with Williams Communications, Intermedia, Qwest, Cisco Systems, and with Digital, HP, Microsoft, Novell, Oracle and Sun to create a next-generation national data network. On March 31, U S WEST Communications filed for long-distance entry in Montana and plans to file in eight other states by the end of the summer and in all 14 states by the end of the year. On the small business side, sales of the company's Centrex product line increased by nearly 50 percent during the quarter, bringing total access lines equipped with Centrex services to nearly 1.2 million. The company recently introduced Call Waiting with Long Distance Alert to all 14 of its states as a free enhancement to Call Waiting in order to bolster new subscribership. The product provides a distinctive ring - or a special alert tone if callers are on the phone - that notifies users of incoming long-distance calls. Volumes and Penetration: Residential penetration levels at the end of the quarter for the company's most popular custom calling features remained strong: Voice Messaging, 17.4 percent (tops in the industry) and Call Waiting, 35.6 percent. The addition of 634,000 access lines (adjusted for the sales of selected rural exchanges) over the past 12 months for a normalized growth rate of 4.1 percent. On an adjusted basis, business access lines grew at 4.8 percent; residential access lines grew at 3.7 percent; and residential additional lines grew 25.4 percent, reaching a second-line penetration level of 14.4 percent. Special access services growth was 25.3 percent year-over-year. Sales and Revenues: Local service revenues continued at a strong growth clip, rising by 9.7 percent year over year.Local service revenues on the consumer side were up 10.4 percent. A 19.1 percent increase in private line and special access revenues, which totaled $239 million for the first quarter -- a reflection of the company's growing data networking services business and its ability to successfully compete in one of the most highly competitive segments of the telecommunications market. Costs and Margins: Absorbed approximately $50 million in expenses and approximately $40 million in capital related to interconnection and number portability. U S WEST Communications (NYSE: USW) provides a full range of telecommunications services - including wireline, wireless PCS and data networking - to more than 25 million customers in 14 western and midwestern states. The company is one of two major groups that make up U S WEST, a company in the connections business, helping customers share information, entertainment and communications services in local markets worldwide. U S WEST's other major group, MediaOne Group, is involved in domestic and international cable and telephony, wireless communications, and directory and information services. U S WEST has proposed splitting the two groups into separate public companies by mid-1998, pending shareowner approvals. [Safe Harbor statement: This document contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Discussion of factors that may affect future results is contained in our recent filings with the Securities and Exchange Commission.] EX-99 3 EXHIBIT 99A.1
COMBINED STATEMENTS OF INCOME U S WEST COMMUNICATIONS GROUP (UNAUDITED) Quarter Ended March 31, % Dollars in millions 1998 1997 Change - - ------------------------------------- ---------- ------------------- OPERATING REVENUES Local service $ 1,350 $ 1,231 9.7 Interstate access service 698 687 1.6 Intrastate access service 206 200 3.0 Long-distance network services 201 250 (19.6) Other services 255 219 16.4 ---------- ---------- Total operating revenues 2,710 2,587 4.8 ---------- ---------- OPERATING EXPENSES Employee-related expenses 938 864 8.6 Other operating expenses 481 445 8.1 Taxes other than income taxes 97 107 (9.3) Depreciation and amortization 524 527 (0.6) ---------- ---------- Total operating expenses 2,040 1,943 5.0 ---------- ---------- Operating income 670 644 4.0 Interest expense 97 103 (5.8) Gain on sale of rural telephone exchanges - 18 - Other expense - net 25 22 13.6 ---------- ---------- Income before income taxes 548 537 2.0 Provision for income taxes 201 198 1.5 ---------- ---------- NET INCOME $ 347 $ 339 2.4 ========== ==========
COMBINED STATEMENTS OF INCOME U S WEST COMMUNICATIONS GROUP (UNAUDITED) Quarter Ended Dollars in millions (except March 31, % per share amounts) 1998 1997 Change - - ------------------------------------- ---------- ------------------- Basic average common shares outstanding 485.0 481.3 0.8 ========== ========== Basic earnings per common share: $ 0.72 $ 0.70 2.9 ========== ========== Diluted average common shares outstanding 489.1 492.4 (0.7) ========== ========== Diluted earnings per common share: $ 0.71 $ 0.70 1.4 ========== ========== Normalized income: Reported net income $ 347 $ 339 2.4 Adjustments to normalize net income: Rural exchange sale - (11) - ---------- ---------- Normalized income $ 347 $ 328 5.8 ========== ========== Normalized basic earnings per common share: Reported basic earnings per common share $ 0.72 $ 0.70 2.9 Adjustments to normalize net income: Rural exchange sale - (0.02) - ---------- ---------- Normalized basic earnings per common share $ 0.72 $ 0.68 5.9 ========== ========== Normalized diluted earnings per common share: Reported diluted earnings per common share $ 0.71 $ 0.70 1.4 Adjustments to normalize net income: Rural exchange sale - (0.02) - ---------- ---------- Normalized diluted earnings per common share $ 0.71 $ 0.67 # 6.0 ========== ========== # Amount does not foot due to rounding of the individual components.
EX-99 4 EXHIBIT 99A.2
SELECTED COMBINED GROUP DATA U S WEST COMMUNICATIONS GROUP (UNAUDITED) Quarter Ended Dollars in millions (except March 31, % per share amounts) 1998 1997 Change - - ---------------------------------- ---------- ---------- --------- Access lines (thousands): Business 4,830 4,621 4.5 Consumer 11,363 11,004 3.3 Total access lines 16,193 15,625 3.6 Normalized access lines: Business 4,844 4,621 4.8 Consumer 11,415 11,004 3.7 Total 16,259 15,625 4.1 Billed access minutes of use (millions): Interstate 14,362 13,530 6.1 Intrastate 2,983 2,785 7.1 Total minutes of use 17,345 16,315 6.3 Employees: Communications Group 48,551 47,138 3.0 Telephone operations only 44,667 44,435 0.5 Telephone employees per 10,000 access lines 27.6 28.4 (2.8) Dividends per common share $ 0.535 $ 0.535 - Common shares outstanding 485.0 482.0 0.6 Capital expenditures $ 516 $ 408 26.5 EBITDA (#1) $ 1,194 $ 1,171 2.0 EBITDA margin 44.1% 45.3% - Return on equity 31.9% 33.3% - Debt-to-capital ratio: Communications Group 57.7% 57.3%# - Telephone operations only 55.6% 55.6%# - # As of December 31, 1997. # 1: Earnings before interest, taxes, depreciation, amortization, and other (EBITDA). EBITDA also excludes gain on asset sales.
EX-99 5 EXHIBIT99A.3
COMBINED BALANCE SHEETS U S WEST COMMUNICATIONS GROUP (UNAUDITED) March 31, December 31, In millions 1998 1997 - - ------------------------------------- ------------- -------------- ASSETS Current assets: Cash and cash equivalents $ 373 $ 27 Accounts and notes receivable 1,586 1,681 Inventories and supplies 179 150 Deferred tax asset 217 247 Prepaid and other 78 77 ------------- -------------- Total current assets 2,433 2,182 ------------- -------------- Gross property, plant and equipment 33,681 33,408 Less accumulated depreciation 19,503 19,176 ------------- -------------- Property, plant and equipment - net 14,178 14,232 Other assets 825 832 ------------- -------------- Total assets $ 17,436 $ 17,246 ============= ============== LIABILITIES AND EQUITY Current liabilities: Short-term debt $ 898 $ 626 Accounts payable 1,205 1,415 Dividends payable 260 259 Other 1,795 1,700 ------------- -------------- Total current liabilities 4,158 4,000 ------------- -------------- Long-term debt 4,931 5,020 Postretirement and other postemployment benefit obligations 2,456 2,468 Deferred taxes, credits and other 1,610 1,559 Communications Group equity 4,281 4,199 ------------- -------------- Total liabilities and equity $ 17,436 $ 17,246 ============= ==============
EX-99 6 EXHIBIT 99A.4
COMBINED STATEMENTS OF U S WEST COMMUNICATIONS GROUP CASH FLOWS (UNAUDITED) Quarter Ended March 31, Dollars in millions 1998 1997 - - -------------------------------------------------- -------- -------- OPERATING ACTIVITIES Net income $ 347 $ 339 Adjustments to net income: Depreciation and amortization 524 527 Gain on sale of rural telephone exchanges - (18) Deferred income taxes and amortization of investment tax credits 61 18 Changes in operating assets and liabilities: Postretirement medical and life costs, net of cash fundings (22) (10) Accounts receivable 95 82 Inventories, supplies and other (36) (34) Accounts payable and accrued liabilities 98 193 Other - net 2 - - - -------------------------------------------------- -------- -------- Cash provided by operating activities 1,069 1,097 - - -------------------------------------------------- -------- -------- INVESTING ACTIVITIES Expenditures for property, plant and equipment (557) (400) Proceeds from sale of rural telephone exchanges - 7 Proceeds from (payments on) disposals of property, plant and equipment 19 (7) Purchase of PCS licenses (18) - - - -------------------------------------------------- -------- -------- Cash (used for) investing activities (556) (400) - - -------------------------------------------------- -------- -------- FINANCING ACTIVITIES Net proceeds from (repayments of) short-term debt 119 (429) Repayments of long-term debt (23) (54) Dividends paid on common stock (259) (237) Proceeds from issuance of common stock 17 24 Purchases of treasury stock (21) - - - -------------------------------------------------- -------- -------- Cash (used for) financing activities (167) (696) - - -------------------------------------------------- -------- -------- CASH AND CASH EQUIVALENTS Increase 346 1 Beginning balance 27 80 - - -------------------------------------------------- -------- -------- Ending balance $ 373 $ 81 ================================================================ NOTE: Certain reclassifications have been made to conform to the current year presentation.
EX-99 7 EXHIBIT 99B Release Date: April 29, 1998 Contacts: Steve Lang, 303-858-3406 Cathy Fowler, 303-858-3405 U S WEST MEDIA GROUP REPORTS TENTH CONSECUTIVE QUARTER OF DOUBLE-DIGIT GROWTH IN OPERATING CASH FLOW es high-speed data customers 35 percent, to 31,000, from last quarter - - Introduces commercial phone service - Grows revenue per cable subscriber by 8 percent - ENGLEWOOD, Colo. - U S WEST Media Group (NYSE: UMG) today reported its tenth straight quarter of double-digit growth in operating cash flow. Media Group is changing its name to MediaOne Group as part of U S WEST's plan to split into two separate public companies. For the first quarter, MediaOne Group reported - on a proportionate basis: o An 11.8 percent increase in operating cash flow, to $693 million. MediaOne Group's operating cash flow for the first quarter 1997 was $620 million. (Normalized operating cash flow grew 16.5 percent for the operations MediaOne Group will hold after the planned split from U S WEST.) Operating cash flow, which represents earnings before interest, taxes, depreciation and amortization, is a key indicator of the company's operating performance. o An 11.4 percent increase in revenue, to $2.34 billion. MediaOne Group's revenue for the first quarter 1997 was $2.1 billion. (Normalized revenue grew 18.6 percent for the operations MediaOne Group will hold after the planned split from U S WEST.) Because MediaOne Group operates numerous joint ventures, the company uses proportionate accounting to reflect its share of operating revenues and expenses associated with these operations. "We're off to a good start for the year," said Chuck Lillis, MediaOne Group president and chief executive officer. "Consumers continue to respond positively to our high-speed data product, MediaOne Express. Penetration for the product continues to increase in all of our high-speed data markets. "Our telephone offerings are extremely competitive and, after just a few months in the market, our penetration rates are exceeding our expectations, and our international businesses are doing well," Lillis said. "MediaOne Group is in strong financial position for the impending split of our two businesses," said Richard McCormick, chairman and chief executive officer of U S WEST, Inc. Since the end of the fourth quarter: o MediaOne Group closed a transaction that sent its domestic wireless operations to AirTouch in exchange for $1.6 billion in AirTouch dividend- bearing preferred stock with a 5.143% coupon and 59.5 million shares of AirTouch common stock valued at $2.9 billion. MediaOne Group also transferred about $1.4 billion of debt to AirTouch. Based on yesterday's AirTouch closing price of $53.0625, the total value of the transaction is $6.2 billion. o U S WEST received a ruling from the Internal Revenue Service that its split-off will be tax-free for the company and shareowners. The split-off plan includes the transfer of U S WEST Dex to U S WEST Communications at the split, removing $3.9 billion in debt from MediaOne Group's books and delivering $850 million in equity to MediaOne Group shareowners in the form of common stock in the new U S WEST. The split is anticipated by mid-1998, pending shareowner approval. Telewest (the U.K. cable and telephone venture in which MediaOne Group owns 26.8 percent) and General Cable agreed to the terms of a proposed merger that will strengthen the strategic position of the combined group as a leading cable operator in the United Kingdom, with interest in 43 franchises covering about 5.8 million homes, and serving 849,000 cable customers, 1.1 million residential and 167,000 business telephone lines (figures as of the end of 1997). MediaOne introduced residential phone service in two markets: Atlanta and Los Angeles. MediaOne Group received nearly $80 million and 20 million shares from our contribution to a newly formed company, PrimeStar, Inc., of 193,000 customers as part of the roll-up plan. MediaOne Group now owns about 10 percent of the new company. First quarter operating highlights include: o Domestic Broadband: MediaOne ended the first quarter with 4.9 million cable customers, up 1.5 percent from last year's first quarter, normalized for various transactions. Normalized revenue per cable subscriber increased 8.3 percent, to $39.17 per month. In addition, MediaOne ended the quarter with 31,000 customers for its high-speed data service, MediaOne Express, the highest penetration rate of any major provider in the U.S. o International: Normalized venture-level results include 4.9 million customers who have signed up for 5.6 million services, including 1.8 million cable accounts, 1.1 million phone lines, and 2.7 million wireless accounts, an increase of 47 percent over the same period last year. Proportionate operating cash flow from international wireless and cable-telephone operations was $17 million during the period, compared with last year's negative $1 million. MediaOne Group's first-quarter net loss was $135 million, of which $492 million related to pre-tax, noncash items. Net loss per basic and diluted common share was 24 cents. MediaOne Group, one of America's largest broadband communications companies, is involved in domestic and international cable and telephony, international wireless and directory and information services. For 1997, MediaOne Group had proportionate revenue of $7.8 billion, pro forma for the AirTouch merger. MediaOne Group is one of two major groups that make up U S WEST, a company in the connections business, helping customers share information, entertainment and communications services in local markets worldwide. U S WEST's other major group, U S WEST Communications, provides telecommunications services in 14 western and midwestern states. U S WEST has proposed splitting the two groups into separate public companies. The split is anticipated by mid-1998, pending shareowner approval. ### [Safe Harbor statement: This document contains statements about expected future events and financial results that are forward-looking and subject to risk and uncertainties. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Discussion of factors that may affect future results is contained in our recent filings with the Securities and Exchange Commission.] NOTE: This release and the financial statements will be available on the Internet after 8 am (MDT) by accessing U S WEST's Internet site: www.uswest.com. U S WEST Media Group - Selected Statistics For the Quarter Ended March 31, 1998
Venture Level Operating Statistics (in thousands) Subscriber/Lines Data (normalized) Business Venture Homes Subscribers/ Net Adds Net Adds Growth Y/Y Passed/Pops Lines Q1 1998 12 Months Domestic MediaOne Cable 8,382 4,910 14 73 1.5% High Speed Data 31 8 31 Time Warner Entertainment (1) Cable 15,758 9,916 37 170 1.7% High Speed Data 39 12 34 ----------- ........... ============= ============= =========== Total Domestic Broadband 24,140 14,896 71 308 ============= ============= =========== =========== International International Cable & Broadband U.K. & European Cable 4,334 1.626 2 90 5.9% U.K. & European Telco 1.079 39 264 2.4% Asian Cable 1.413 184 31 114 162.9 % International Wireless One 2 One 58,000 1,198 184 578 93.2% Central European Wireless 64,200 1,429 251 718 101.0 % Asian & Other Wireless 74,000 116 12 31 36.5% Total International ........... ============ ============= =========== ================== 201,947 5,632 519 1,795 46.8 % ============ ============= =========== ================== =========== Consolidated Financial Statistics (in millions) Operating Business Venture Revenue Growth Cash Flow Growth Margin MediaOne Core Cable $575 9.7% $261 10.6% 45.4 % Total Broadband 619 12.1% 240 6.7% 38.8 % (1) MediaOne Group has 50% management control of TWE domestic broadband business and a 25.51% investment.
EX-99 8 EXHIBIT 99B.1
COMBINED STATEMENTS OF OPERATIONS U S WEST MEDIA GROUP (UNAUDITED) Quarter Ended March 31, % Dollars in millions 1998 1997 Change - - ----------------------------------- ----------- --------------------- SALES AND OTHER REVENUES Cable and broadband $ 624 $ 556 12.2 Wireless communications 341 335 1.8 Directory and information services 307 309 (0.6) Other 7 7 - ----------- ----------- Total sales and other revenues 1,279 1,207 6.0 ----------- ----------- OPERATING EXPENSES Costs of sales and other revenues 424 406 4.4 Selling, general and administrative expenses 354 320 10.6 Depreciation 212 169 25.4 Amortization 144 134 7.5 ----------- ----------- Depreciation & amortization 356 303 17.5 ----------- ----------- Total operating expenses 1,134 1,029 10.2 ----------- ----------- Income from operations 145 178 (18.5) Interest expense (150) (175) (14.3) Equity losses in unconsolidated ventures (136) (165) (17.6) Gain on sale of investment - 51 - Guaranteed minority interest expense (22) (22) - Other expense - net (20) (4) - ----------- ----------- Loss before income taxes (183) (137) 33.6 Income tax benefit 48 28 71.4 ----------- ----------- NET LOSS (135) (109) 23.9 Dividends on preferred stock (13) (13) - ----------- ----------- LOSS AVAILABLE FOR COMMON STOCK $ (148)$ (122) 21.3 =========== ===========
COMBINED STATEMENTS OF OPERATIONS U S WEST MEDIA GROUP (UNAUDITED) Quarter Ended In millions (except March 31, % per share amounts) 1998 1997 Change - - ----------------------------------- ----------- --------------------- Basic and diluted average common shares outstanding 608.3 606.5 0.3 =========== =========== Basic and diluted loss per common share $ (0.24)$ (0.20) 20.0 =========== ===========
EX-99 9 EXHIBIT 99B.2
COMBINED BALANCE SHEETS U S WEST MEDIA GROUP (UNAUDITED) March 31, December 31, Dollars in millions 1998 1997 - - --------------------------------------- ------------ ------------ ASSETS Current assets: Cash and cash equivalents $ 148 $ 184 Accounts and notes receivable 478 589 Deferred directory costs 263 257 Other assets 298 298 ------------ ------------ Total current assets 1,187 1,328 ------------ ------------ Property, plant and equipment - net 4,478 4,348 Investment in Time Warner Entertainment 2,487 2,486 Net investment in international ventures 456 475 Net investment in assets held for sale 441 419 Intangible assets - net 12,443 12,597 Other assets 1,064 961 ------------ ------------ Total assets $ 22,556 $ 22,614 ============ ============ LIABILITIES AND EQUITY Current liabilities: Short-term debt $ 984 $ 804 Accounts payable 338 432 Deferred revenue and customer deposits 160 152 Other payables 910 1,038 ------------ ------------ Total current liabilities 2,392 2,426 ------------ ------------ Long-term debt 8,247 8,228 Deferred income taxes 3,247 3,262 Deferred credits and other 419 393 Company-obligated mandatorily redeemable preferred securities of subsidiary trust holding solely Company-guaranteed debentures 1,080 1,080 Preferred stock subject to mandatory redemption 100 100 Media Group equity 7,117 7,171 Company LESOP guarantee (46) (46) ------------ ------------ Total equity 7,071 7,125 ------------ ------------ Total liabilities and equity $ 22,556 $ 22,614 ============ ============
EX-99 10 EXHIBIT 99B.3
SELECTED FINANCIAL DATA U S WEST MEDIA GROUP (UNAUDITED) Quarter Ended March 31, % %Chg Dollars in millions 1998 1997 Change Norm - - ------------------------------ ------------------------------ Consolidated Revenues Cable & broadband Domestic $ 619 $ 552 12.1 International 5 4 25.0 Corporate 7 7 - Other - 22 - ------------------ Operations post-split (1) 631 585 7.9 11.7 Domestic wireless 341 335 1.8 Domestic directories (Dex) 307 287 7.0 ------------------ Other businesses 648 622 4.2 ------------------ Total $ 1,279 $ 1,207 6.0 ================== Consolidated Operating Cash Flow (2) Cable & broadband Domestic $ 240 $ 225 6.7 International - (2) - International wireless (2) (2) - Corporate (26) (12) - Other (3) (7) (57.1) ------------------ Operations post-split (1) 209 202 3.5 0.5 Domestic wireless 138 137 0.7 Domestic directories (Dex) 154 142 8.5 ------------------ Other businesses 292 279 4.7 ------------------ Total $ 501 $ 481 4.2 ==================
EX-99 11 EXHIBIT 99B.4
SELECTED FINANCIAL AND DOMESTIC CABLE AND BROADBAND OPERATING HIGHLIGHTS (UNAUDITED) Quarter Ended March 31, % % Chg Dollars in millions 1998 1997 Change Norm - - ---------------------- --------- ------------------------ Domestic Cable & Broadband Results Revenues Basic cable $ 414 $ 368 12.5 Premium 79 82 (3.7) Advertising 31 25 24.0 Primestar 34 23 47.8 Pay-per-view 13 11 18.2 New prod. tier 5 2 - Equip. & Install. 40 35 14.3 Other 3 6 (50.0) ------------------- Total Revenue (1) $ 619 $ 552 12.1 12.5 ------------------- Operating Cash Flow (2) Core cable (1) $ 261 $ 236 10.6 10.3 Other (21) (11) 90.9 ------------------- Total Oper. Cash Flow (1) $ 240 $ 225 6.7 6.0 ------------------- Operating Cash Flow Margins Core cable 45.4% 45.0% Total 38.8% 40.8% Operating & Financial Highlights Homes passed (thousands) (1) 8,382 8,308 0.9 1.9 Subscribers (thousands): Basic cable (1) 4,910 4,873 0.8 1.5 Primestar 193 152 27.0 Basic pen. 58.6% 58.7% Premium units (thousands) 3,958 3,855 2.7 Premium/Basic 80.6% 79.1% High speed data cust. (actual) 31,000 - - Core cbl. mnly. rev./avg. sub (actual) (1) $ 39.17 $ 36.47 7.4 8.3
EX-99 12 EXHIBIT 99B.5
SELECTED PROPORTIONATE U S WEST MEDIA GROUP FINANCIAL DATA (UNAUDITED) Quarter Ended March 31, % % Chg In millions 1998 1997 Change Norm - - ------------------------------ --------- ---------------- ----- Proportionate Revenues Cable & broadband Domestic $ 1,361 $ 1,215 12.0 International 72 108 (33.3) International wireless 246 144 70.8 Corporate 5 5 - Other 11 29 (62.1) -------------------- Operations post-split (1) 1,695 1,501 12.9 18.6 Domestic wireless 335 309 8.4 Domestic directories (Dex) 307 287 7.0 -------------------- Other businesses 642 596 7.7 -------------------- Total $ 2,337 $ 2,097 11.4 ==================== Proportionate Operating Cash Flow (2) Cable & broadband Domestic $ 428 $ 390 9.7 International 3 9 (66.7) International wireless 14 (10) - Corporate (11) (3) - Other (3) (9) (66.7) -------------------- Operations post-split (1) 431 377 14.3 16.5 Domestic wireless 108 101 6.9 Domestic directories (Dex) 154 142 8.5 -------------------- Other businesses 262 243 7.8 -------------------- Total $ 693 $ 620 11.8 ==================== Notes (1) Normalized percent change excludes the one time effects of acquisitions and dispositions. (2) Operating cash flow represents earnings before interest, taxes, depreciation and amortization.
EX-99 13 EXHIBIT 99C.1
CONSOLIDATED STATEMENTS OF U S WEST, Inc. OPERATIONS (UNAUDITED) Quarter Ended March 31, % Dollars in millions 1998 1997 Change - - ----------------------------- ----------- ----------- --------- SALES & OTHER REVENUES $ 3,967 $ 3,766 5.3 OPERATING EXPENSES Employee-related expenses 1,247 1,148 8.6 Other operating expenses 914 842 8.6 Taxes other than income taxes 111 124 (10.5) Depreciation and amortization 880 830 6.0 ----------- ----------- Total operating expenses 3,152 2,944 7.1 ----------- ----------- Operating Income 815 822 (0.9) Interest expense (247) (278) (11.2) Equity losses in unconsolidated ventures (136) (165) (17.6) Gain on asset sales: Investments - 51 - Rural telephone exchanges - 18 - Guaranteed minority interest expense (22) (22) - Other expense- net (45) (26) 73.1 ----------- ----------- Income before income taxes 365 400 (8.8) Provision for income taxes (153) (170) (10.0) ----------- ----------- NET INCOME 212 230 (7.8) Dividends on preferred stock (13) (13) - ----------- ----------- EARNINGS AVAILABLE FOR COMMON STOCK $ 199 $ 217 (8.3) =========== ===========
CONSOLIDATED STATEMENTS OF U S WEST, Inc. OPERATIONS (Continued) (UNAUDITED) Quarter Ended In millions (except March 31, % per share amounts) 1998 1997 Change - - ----------------------------- ----------- ----------- --------- COMMUNICATIONS GROUP: Basic average common shares outstanding 485.0 481.3 0.8 =========== =========== Basic earnings per common share $ 0.72 $ 0.70 2.9 =========== =========== Diluted average common shares outstanding 489.1 492.4 (0.7) =========== =========== Diluted earnings per common share $ 0.71 $ 0.70 1.4 =========== =========== MEDIA GROUP: Basic and diluted average common shares outstanding 608.3 606.5 0.3 =========== =========== Basic and diluted loss per common share $ (0.24)$ (0.20) 20.0 =========== =========== Capital expenditures $ 867 $ 729 18.9 Debt-to-capital ratio (#1) 54.6% 54.0% # - Employees 68,501 68,468 - EBITDA $ 1,695 $ 1,652 2.6 EBITDA Margin 42.7% 43.9% - # As of December 31, 1997. #1 Ratio includes preferred securities and other preferred stock subject to mandatory redemption as a component of total capital. Including debt related to the net investment in assets held for sale, preferred securities and other preferred stock subject to mandatory redemption, the Company's percentage of debt to total capital was 59.4% at March 31, 1998 and 58.9% at December 31, 1997.
EX-99 14 EXHIBIT 99C.2
CONSOLIDATED BALANCE SHEETS U S WEST, Inc. (UNAUDITED) March 31, December 31, In millions 1998 1997 - - ------------------------------------------ ------------ ------------ ASSETS Current assets: Cash and cash equivalents $ 521 $ 211 Accounts and notes receivable 2,053 2,249 Inventories and supplies 202 179 Deferred tax asset 330 373 Prepaid and other 411 387 ------------ ------------ Total current assets 3,517 3,399 ------------ ------------ Property, plant and equipment - net 18,656 18,580 Investment in Time Warner Entertainment 2,487 2,486 Net investment in international ventures 456 475 Intangible assets - net 12,537 12,674 Net investment in assets held for sale 441 419 Other assets 1,786 1,707 ------------ ------------ Total assets $ 39,880 $ 39,740 ============ ============ LIABILITIES AND SHAREOWNERS' EQUITY Current liabilities: Short-term debt $ 1,882 $ 1,430 Accounts payable 1,446 1,751 Dividends payable 269 268 Other payables 2,850 2,866 ------------ ------------ Total current liabilities 6,447 6,315 ------------ ------------ Long-term debt 13,178 13,248 Postretirement and other postemployment benefit obligations 2,562 2,570 Deferred taxes 4,086 4,068 Deferred credits and other 1,075 1,035 Company-obligated mandatorily redeemable preferred securities of subsidiary trust holding solely Company-guaranteed debentures 1,080 1,080 Preferred stock subject to mandatory redemption 100 100 Shareowners' equity: Preferred shares 923 923 Common shares 10,871 10,876 Retained (deficit) (310) (334) LESOP guarantee (46) (46) Foreign currency translation adjustments (86) (95) ------------ ------------ Total shareowners' equity 11,352 11,324 ------------ ------------ Total liabilities & shareowners' equity $ 39,880 $ 39,740 ============ ============
EX-27 15 FDS --
5 0000732718 U S WEST, Inc. 1,000,000 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 521 0 2,053 0 202 3,517 39,791 21,135 39,880 6,447 13,178 1,180 923 10,871 (442) 39,880 3,967 3,967 0 0 3,152 0 247 365 153 212 0 0 0 212 0.72 0.71
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