CONSOLIDATED STATEMENTS OF CASH FLOWS U S WEST, Inc. (UNAUDITED) Six Months Ended June 30, In millions 1998 1997 - ------------------------------------------------- -------- --------- OPERATING ACTIVITIES Net income $ 761 $ 836 Adjustments to net income: Depreciation and amortization 1,067 1,075 Gains on sales of rural telephone exchanges - (47) Deferred income taxes and amortization of investment tax credits 89 (10) Changes in operating assets and liabilities: Accounts receivable 11 22 Inventories, supplies and other current assets (88) (62) Accounts payable and accrued liabilities (76) 259 Other - net 88 95 - ------------------------------------------------- -------- --------- Cash provided by operating activities 1,852 2,168 - ------------------------------------------------- -------- --------- INVESTING ACTIVITIES Expenditures for property, plant and equipment (1,283) (849) Payment to MediaOne Group for the directory business (Dex) (3,829) - Proceeds from disposals of property, plant and equipment 34 4 Purchase of PCS licenses (18) - Proceeds from sales of rural telephone exchanges - 28 Other (34) - - ------------------------------------------------- -------- --------- Cash (used for) investing activities (5,130) (817) - ------------------------------------------------- -------- --------- FINANCING ACTIVITIES Net proceeds from (repayments of) short-term debt 2,060 (669) Net (repayments of) proceeds from issuance of Old U S WEST debt (198) 11 Proceeds from issuance of long-term debt 3,066 - Repayments of long-term debt (83) (86) Proceeds from issuance of common stock 23 38 Dividends paid on common stock (519) (475) Dividends paid to Old U S WEST (183) (161) Dividend paid to MediaOne Group (139) - Purchases of treasury stock (46) - - ------------------------------------------------- -------- --------- Cash provided by (used for) financing activities 3,981 (1,342) - ------------------------------------------------- -------- --------- CASH AND CASH EQUIVALENTS Increase 703 9 Beginning balance 27 80 - ------------------------------------------------- -------- --------- Ending balance $ 730 $ 89 ================================================= ======== =========