CONSOLIDATED STATEMENTS OF CASH FLOWS U S WEST, Inc. Year Ended December 31, In millions 1999 1998 - - ------------------------------------------------- ------- ------- OPERATING ACTIVITIES Net income $ 1,342 $ 1,436 Adjustments to net income: Depreciation and amortization 2,367 2,199 Cumulative effect of change in accounting principle (240) - Loss on sale of Global Crossing Ltd. shares 423 - Deferred income taxes and amortization of investment tax credits 225 61 Changes in operating assets and liabilities: Accounts receivable (126) (26) Inventories, supplies and other current assets (106) (12) Accounts payable, accrued expense and advance billings 345 104 Other 316 165 - - ------------------------------------------------- ------- ------- Cash provided by operating activities 4,546 3,927 - - ------------------------------------------------- ------- ------- INVESTING ACTIVITIES Expenditures for property, plant and equipment (3,944) (2,672) Payments on disposals of property, plant and equipment (49) (30) Investment in Global Crossing Ltd. common stock (2,464) - Other (5) (67) - - ------------------------------------------------- ------- ------- Cash used for investing activities (6,462) (2,769) - - ------------------------------------------------- ------- ------- FINANCING ACTIVITIES Net proceeds from short-term debt 1,304 887 Proceeds from issuance of long-term debt 2,062 3,781 Repayments of long-term debt (336) (442) Net repayments of Old U S WEST short-term debt - (198) Repayment of Old U S WEST debt in connection with the DEX Alignment - (3,829) Proceeds from issuance of common stock 102 88 Dividends paid on common stock (1,187) (1,056) Dividends paid to Old U S WEST - (194) Payment to Old U S WEST for debt refinancing costs - (140) Return of capital from Old U S WEST - 13 Purchases of treasury stock - (46) - - ------------------------------------------------- ------- ------- Cash used for financing activities 1,945 (1,136) - - ------------------------------------------------- ------- ------- CASH AND CASH EQUIVALENTS Increase 29 22 Beginning balance 49 27 - - ------------------------------------------------- ------- ------- Ending balance $ 78 $ 49 ================================================= ======= =======