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EXHIBIT 99A
RELEASE DATE: JANUARY 20, 1994
CONTACT: LOIS LEACH 303-793-6355
BLAIR JOHNSON 303-793-6296
U S WEST REPORTS RECORD GROWTH IN TELEPHONE LINES AND
CELLULAR SUBSCRIBERS;
TAKES BOLD ACTION TO ENSURE SUCCESS IN NEW MARKETS
ENGLEWOOD, Colo. -- U S WEST (NYSE: USW) today reported increased
revenues and income from its continuing operations in 1993, before
the effects of one-time charges.* The company also reported record
growth in telephone access lines and cellular subscribers.
The number of telephone access lines served by U S WEST
Communications, the company's telecommunications subsidiary, grew
by 498,000 in 1993 -- a record 3.7 percent increase. In addition,
minutes of use, an indicator of long-distance calling volumes, grew
by 8.5 percent in 1993.
Meanwhile, U S WEST Cellular added a record 186,000 subscribers in
1993 -- a 45 percent increase over 1992.
U S WEST's revenues grew in 1993 by $471 million to $10.29 billion
- -- a 4.8 percent increase over 1992.
Pre-tax income from continuing operations** increased 11.2 percent
over 1992, before the effects of one-time charges. After-tax
income, on the same basis, increased 6.0 percent to $1.14 billion,
or $2.72 per share. By comparison, 1992 income was $1.08 billion,
or $2.61 per share.
"1993 was a landmark year for U S WEST," said Richard McCormick,
U S WEST chairman and chief executive officer. "U S WEST and Time
Warner Entertainment forced a strategic alliance, making U S WEST
the first major telecommunications company to announce -- and
complete -- a partnership with a leading entertainment company to
deliver interactive, broadband services outside the phone company's
territory. Our partnership with Time Warner Entertainment will
combine the expertise of both companies to generate long-term
growth in earnings and cash flow.
"In February," McCormick said, "we also were the first regional
Bell company to commit to upgrading its phone system to a broadband
network so we can offer interactive video services to our current
customers. We've already started construction in Omaha for the
largest multimedia trial in the United States, and earlier this
month we announced plans to expand our broadband network to Denver,
Minneapolis-St. Paul, Portland, Ore., and Boise, Idaho."
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McCormick also noted that U S WEST took two other major steps to
prepare for the dramatic changes under way in the local
telecommunications business.
"We're 'reengineering' our business practices to improve customer
service and reduce costs," he said. "And we've adopted new
accounting methods to speed the depreciation of telephone wires and
switches."
1993 revenue growth and continued cost controls resulted in a 6.7
percent increase in U S WEST's earnings before interest, taxes,
depreciation, amortization and other income, or EBITDA -- excluding
the effects of a one-time restructuring charge. EBITDA is a
financial tool used to evaluate a company's fundamental operating
performance.
Including the effects of previously announced one-time charges, the
company reported a 1993 net loss of $2.81 billion, or $6.69 per
share. (*See page 4 for more detail on these one-time charges.)
Fourth-quarter 1993 revenues totaled $2.67 billion -- 5.8 percent
more than the same period in 1992.
Fourth quarter income from continuing operations was $264.1 million
in 1993, compared with $261.9 million in 1992. On a per-share
basis, earnings declined slightly to $0.62 compared with $0.63 in
1992, reflecting the fourth-quarter sale of 22 million new shares
of U S WEST stock.
Other 1993 U S WEST developments include:
- The introduction in September of Mercury One-2-One -- the
world's first commercial Personal Communications Network, or PCN.
Unveiled in the United Kingdom with Cable & Wireless PLC, Mercury
One-2-One is a new generation of wireless telephones priced for the
mass market. Customer response to Mercury One-2-One has exceeded
expectations.
- Significant customer growth in the United Kingdom, where
U S WEST and Tele-Communications Inc. are the largest providers of
combined cable TV and telephone service. Operating in 24
franchises, the joint venture ended 1993 with 226,000 cable TV
customers -- up markedly from the 143,000 one year ago. The
company also provides about 140,000 telephone access lines,
compared to 76,000 at the end of 1992.
- Continued strong growth in U S WEST's international cellular
markets. The number of cellular customers served by our joint
venture operations in Hungary, the Czech Republic, Slovakia and
Russia grew to 63,200 in 1993, compared to 31,500 a year ago.
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U S WEST is in the connections business, helping customers share
information, entertainment and communications services in local
markets worldwide.
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* U S WEST's One-Time Charges in 1993
The one-time charges stemmed from several bold steps U S WEST took
in 1993 to prepare the company for success in the increasingly
competitive marketplace. Following are the effects of these
previously announced charges in after-tax dollars. (The per-share
amounts were diluted by the sale of 22 million shares of U S WEST's
common stock in a fourth-quarter equity offering.)
- A third-quarter restructuring charge of $610 million, or
$1.46 per share, for costs associated with reeingineering U S WEST
Communications' customer support operations, streamlining and other
initiatives throughout U S WEST;
- Extraordinary charges totaling $3.2 billion, or $7.63 per
share. Extraordinary charges reflect both a technical accounting
change -- from rules designed for regulated utilities to those
developed for competitive companies -- that accounts for $7.45 per
share; and refinancing of $2.7 billion in long-term debt at
U S WEST Communications that accounts for $0.18 per share;
- A second-quarter charge of $100 million, or $0.24 per share,
for costs associated with exiting the financial services
businesses; and
- An adjustment of $74 million, or $0.17 per share, to reflect
the cumulative tax effect resulting from the 1993 federal tax law
changes. ($54 million, or $0.13 per share, is reflected in
continuing operations; $20 million, or $0.04 per share, is
reflected in discontinued operations.)
** Continuing Operations vs. Discontinued Operations
Continuing operations represent company results minus the
contributions of U S WEST's financial services businesses, which
the company is exiting. These businesses are being treated as
discontinued operations for accounting purposes.
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