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 ================================================================ <FN> NOTE: Certain reclassifications have been made to conform to the current year presentation. </FN>