EXHIBIT 99A
U S WEST Communications, Inc.
1801 California Street
Denver, CO 80202
[U S WEST Communications logo and registered mark]
News Release
Release Date: February 12, 1997
Contact: Dave Banks, 303-804-6752
SOLID 4TH QUARTER OPERATIONS, RECORD ANNUAL GROWTH
GENERATE STRONG FINANCIAL RESULTS FOR
U S WEST COMMUNICATIONS GROUP
ENGLEWOOD, Colo. -- Bolstered by accelerating revenue growth, strong marketing
successes, access line gains, and tighter controls on employee related
expenses, U S WEST Communications Group reported fourth quarter normalized net
income of $304 million, an increase of 11.8 percent over 1995, and normalized
earnings per share of $.63, up 10.5 percent over 1995.
For the year, normalized net income grew 5.1 percent, to $1.16 billion from
$1.11 billion in 1995. Normalized full-year EPS for 1996 was up 3.8 percent
to $2.44 from $2.35 in 1995.
Fourth quarter and year-end highlights included the following:
- - - For the quarter, revenues rose 6.6 percent (to $2.6 billion) over fourth
quarter, 1995 -- including an 11.2 percent gain in local service revenues from
$1.11 billion in fourth quarter, 1995 to $1.24 billion in fourth quarter,
1996. Annual operating revenues were up 6.3 percent over 1995, to $10.1
billion from $9.5 billion.
- - - U S WEST Communications Group added a record 742,000 access lines in
1996, 26 percent more than it added in 1995. The company now has more than
15.4 million access lines in service, 5.0 percent more than at the end of 1995
adjusted for the sale of certain rural exchanges. This annual growth rate
includes a 7.6 percent increase for business lines, a 4.0 percent increase for
residential lines, and a gain of 30.8 percent for residential additional
lines.
- - - Strong access line growth, coupled with telephone company employee
reductions of more than 2,500 for the year, drove the
employees-per-10,000-access-lines figure for the company's telephone
operations below 30 for the first time. It dropped 9 percent for the year
from 32.4 at the end of 1995 to 29.5 at the end of 1996.
- - - Operating expense growth slowed for the second consecutive quarter,
rising just 5.0 percent.
- - - Service quality improved to the best levels of the 1990s, showing marked
gains for the year. For instance, orders "Held" more than 30 days for primary
service at the end of 1996 were 864, less than half of the 1,887 at the end of
1995. Also, 90 percent of the company's customers now reach a customer
service representative within three rings.
"U S WEST Communications Group made excellent progress in all areas of the
business during 1996, particularly in the fourth quarter," said Richard
McCormick, chairman and chief executive officer of U S WEST, Inc. "Top-line
results are starting to pay off on the bottom line. That tells me we turned
the corner in many respects in 1996 and can now enter 1997 with momentum and a
real sense of optimism."
"These are the best quarterly results we've had in several years," said Sol
Trujillo, president and CEO of U S WEST Communications Group. "We had a very
successful 1996 -- our marketing effort produced record growth, we drove costs
out of the business with productivity gains and capital efficiencies, and we
made good on our promise to dramatically improve our customer service.
"I'm very pleased with our fourth quarter results," Trujillo added. "They
show -- as we planned -- that our top-line growth is flowing to the bottom
line as we aggressively become more efficient and tighten management
disciplines throughout the business."
Other highlights for the quarter and year include:
- - - A reduction in employee overtime expenses of $24 million -- or 42
percent -- in the fourth quarter, 1996 versus the same period in 1995.
- - - Continued strong revenue growth in new products, such as Caller ID,
Voice Messaging and data networking services, up approximately 57 percent for
the year. Residential penetration levels for the company's top-selling
value-added services continued to show strength: Call Waiting, 36.9 percent;
Caller ID, 20.5 percent; Voice Messaging, 16 percent.
- - - Improved capital efficiency by reducing the cost per access line added
by 27 percent over 1995. This allowed the company to keep 1996 capital
expenditures at 1995 levels even with a 26 percent increase in the number of
access lines gained during the year, as compared with 1995.
- - - The company's large business division improved revenues by 13.6 percent
for the year to $1.6 billion, while winning 110 contracts over $1 million --
some 80 percent of the contracts for which it competed.
- - - Revenues from the company's data networking division, !NTERPRISE, were
up $123 million for the year, more than a 100 percent gain over 1995 revenues.
!NTERPRISE continued to rapidly deploy its leading-edge Frame Relay network,
and by year-end, had more than 38,500 Frame Relay ports in service. Just
recently, that division announced it would become the first company in the
nation to widely deploy commercial Digital Subscriber Line (DSL) services.
These services initially will serve businesses' remote-access needs.
- - - Results of a study released late last year by the respected Boston-based
research firm, The Yankee Group, showed that U S WEST Communications scores
higher than any other RBOC in customer loyalty and better than AT&T in its
territory.
- - - In early January, U S WEST Communications acquired nearly 20 million PCS
POPs in recently concluded auctions of D&E block spectrum. These licenses
will allow the company to provide integrated, digital wireless services to the
majority of the major markets in its 14-state region. U S WEST Communications
paid $2.88 per POP -- the lowest price per POP of any of the previous spectrum
bidders.
U S WEST Communications Group provides telecommunications and high-speed data
services 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. U S WEST
is 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 Media Group (NYSE:UMG), is involved in
domestic and international cable and wireless networks, directory publishing
and interactive multimedia services.
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[Safe Harbor statement: Some of the information presented in or in
connection with this announcement constitutes "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
Although the Company believes that its expectations are based on reasonable
assumptions within the bounds of its knowledge of its business and operations,
there can be no assurance that actual results will not differ materially from
its expectations. Factors that could cause actual results to differ from
expectations include: (i) different than anticipated competition from new
entrants into the local exchange and intralata toll markets, (ii) changes in
demand for the Company's products and services, including optional custom
calling features, (iii) different than anticipated employee levels, capital
expenditures, and operating expenses as a result of unusually rapid, in-region
growth, (iv) the gain or loss of significant customers, (v) pending regulatory
actions in state jurisdictions, and (vi) regulatory changes affecting the
telecommunications industry, including changes that could have an impact on
the competitive environment in the local exchange market.]
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Note: This release and the attached tables are available on the internet by
accessing U S WEST's internet site: www.uswest.com.