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EXHIBIT 99.1
U S WEST, Inc.
7800 East Orchard Road
Englewood, CO 80111
303 793-6500
NEWS RELEASE
Release Date: April 10, 1995
Contacts: Lois Leach: 303-793-6355
Steve Lang: 303-754-5441
U S WEST PLANS TO CREATE TWO CLASSES OF COMMON STOCK
- Will track 14-state telecommunications business
separately from multimedia businesses -
- Dividend not affected -
- U S WEST remains a consolidated corporate entity -
ENGLEWOOD, Colo. -- U S WEST (NYSE: USW) today said its
board of directors has approved a plan to create two classes of
common stock, one that will track the performance of the
company's 14-state telecommunications business, and one that
will track the performance of its multimedia businesses.
The plan will be implemented through a tax-free stock
distribution that allows current shareowners to continue
holding the same level of economic interest in the company.
HOW IT WILL WORK
Under the plan, there will be two "targeted" stocks in
U S WEST, which will trade separately on the New York Stock
Exchange. U S WEST is not spinning off any businesses.
Current shares of U S WEST stock will be redesignated as
shares tracking the performance of U S WEST's in-region
telecommunications business, and will be known as U S WEST
Communications Group. The company intends that this group will
continue to pay the quarterly cash dividend (currently 53.5
cents).
Owners of U S WEST stock on the record date of the
transaction will receive a one-time stock distribution of a new
share for every share they own of U S WEST. These will be
U S WEST MediaVision Group shares, and will track the
performance of U S WEST's multimedia, wireless, directory and
international assets. These shares will pay no dividend.
Because the plan will not change the way U S WEST issues
debt, the company does not expect changes in its credit
ratings.
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The company intends to file a proxy with the U.S. Securities
and Exchange Commission this spring. A final proxy will be sent
to shareowners toward the end of the summer, and they will be
asked to approve it at a special meeting in the fall. If the
proposal is approved, the new classes of stock would begin
trading shortly thereafter.
WHY IT'S NEEDED
"We have received wide recognition and support for our long-
term strategy," said Richard D. McCormick, U S WEST chairman
and chief executive officer. "But we have felt for some time
that the financial market is undervaluing our stock.
"This is because our growth strategy has resulted in a mix
of assets with differing characteristics. On one hand, we have
the U S WEST Communications Group, a profitable, stable, highly
focused, well-managed telecommunications company with strong
earnings and available cash flow, located in an excellent
region," McCormick said.
"On the other hand, we have our MediaVision Group
businesses, which are superbly positioned to benefit from the
worldwide growth in electronic commerce made possible by
advanced networks. But they differ markedly from the telephone
business, both in their fundamentals and in the indicators the
financial community uses to measure value.
"We understand that investors have differing needs and
expectations. We believe that creating targeted stocks will
help them realize full value from the company's long-term
strategy, while at the same time enhancing our financial
flexibility. Because we are not creating separate companies, we
will continue to profit from the combined strategic benefits of
being a single corporation," McCormick said.
"And this method of recapitalizing our business will bring
other benefits, including incentives more directly tied to
shareowner returns and greater marketplace focus in our
individual units," McCormick said.
DESCRIPTIONS OF THE "TARGETED" BUSINESSES
U S WEST Communications Group, headed by Gary Ames, who is
currently president and chief executive officer of the existing
U S WEST Communications Group:
This targeted stock will reflect the value in U S WEST's
14-state telecommunications business. The group provides a full
range of communications solutions to more than 25 million
business, residence and government customers in 14 Western and
Midwestern states.
This includes advanced communications services such as
Caller ID and Voice Messaging and has plans for wireless and
multimedia video networks. The company also provides advanced
data and video services through its !NTERPRISE Networking
Services division.
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U S WEST MediaVision Group, headed by Chuck Lillis, who is
currently president and chief executive officer of the U S WEST
Diversified Group. This targeted stock will include:
- The U S WEST Multimedia Group, which manages U S WEST's
entry into domestic broadband markets outside the U S WEST
Communications states, including the company's investment in
Time Warner Entertainment and its ownership of cable properties
in the Atlanta area.
- The U S WEST NewVector Group, which provides wireless
services to a rapidly growing base of more than a million
customers, and 11 PCS licenses won earlier this year in a
partnership known as PCS PrimeCo.
- The U S WEST Marketing Resources Group, which connects
buyers and sellers through telephone directories (including the
Yellow Pages), database marketing and new-media services, such
as U S Avenue, CityKey and GOtv.
- The U S WEST International Group, which provides advanced
communications and entertainment services to more than 1.8
million customers in 15 rapidly expanding markets around the
world. The group includes TeleWest, the largest provider of
combined cable and phone services in the U.K., and Mercury One-
2-One, the world's first commercial personal communications
service, also in the U.K.
Dick Callahan, executive vice president of U S WEST and
president and CEO of the U S WEST International Group, will
report to McCormick for international development activities
and to Lillis for International Group operations.
SUMMARY
"We have three main goals in taking this step," McCormick
said. "First, we want shareowners to be able to capture the
full value in our business. Second, we want to increase our
flexibility to grow in the future. Third, we want to remain a
consolidated corporate entity because we believe that's the
best way to execute our long-term strategy.
"This method of recapitalizing our business allows us to
continue capturing synergies between the groups, even as we
make it possible for investors to identify which parts of our
business are most attractive to them," McCormick said.
U S WEST is in the connections business, helping customers
share information, communications and entertainment services in
local markets worldwide.
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