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% - <FN> # 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. </FN>