COMBINED PRO FORMA STATEMENTS OF INCOME (1) U S WEST, INC.
(UNAUDITED)
Quarter Ended Nine Months Ended
September 30, % September 30, %
In millions 1998 1997 Change 1998 1997 Change
- - --------------------- ------- ------- -------------- ------- ------
OPERATING REVENUES
Local service $1,398 $ 1,314 6.4 $4,117 $ 3,739 10.1
Interstate access 693 663 4.5 2,102 2,028 3.6
Intrastate access 208 208 - 616 608 1.3
Long-distance
network 199 231 (13.9) 595 721 (17.5)
Directory services 315 296 6.4 935 879 6.4
Other services 299 248 20.6 809 682 18.6
---------------- ----------------
Total operating rev. 3,112 2,960 5.1 9,174 8,657 6.0
---------------- ----------------
OPERATING EXPENSES
Employee-related 1,104 1,018 8.4 3,179 2,915 9.1
Other operating 567 539 5.2 1,798 1,517 18.5
Taxes other than
income taxes 84 106 (20.8) 274 320 (14.4)
Depreciation & amort 558 541 3.1 1,625 1,616 0.6
---------------- ----------------
Total operating exp. 2,313 2,204 4.9 6,876 6,368 8.0
---------------- ----------------
Operating income 799 756 5.7 2,298 2,289 0.4
Interest expense 172 165 4.2 495 500 (1.0)
Gains on sales of rural
telephone exchanges - 30 - - 77 -
Other expense 19 12 58.3 77 51 51.0
---------------- ----------------
Income before income
taxes and extra-
ordinary item 608 609 (0.2) 1,726 1,815 (4.9)
Income tax provision 229 226 1.3 658 677 (2.8)
---------------- ----------------
Income before
extraordinary item 379 383 (1.0) 1,068 1,138 (6.2)
Extraordinary Item:
Early extinguishment
of debt - net of tax - (3) - - (3) -
---------------- ----------------
PRO FORMA
NET INCOME $ 379 $ 380 (0.3)$1,068 $ 1,135 (5.9)
================ ================
5
COMBINED PRO FORMA STATEMENTS OF INCOME, (1) U S WEST, INC.
CONTINUED (UNAUDITED)
Quarter Ended Nine Months Ended
In millions, except September 30, % September 30, %
per share amounts 1998 1997 Change 1998 1997 Change
- - --------------------- ------- ------- -------------- ------- ------
Pro forma basic
average shares
outstanding 501.8 499.6 0.4 501.5 498.7 0.6
================ ================
Pro forma basic earnings per share:
Income before
extraordinary item $ 0.76 $ 0.77 (1.3) $ 2.13 $ 2.28 (6.6)
Extraordinary item:
Early extinguishment
of debt - (0.01) - - (0.01) -
------- ------- ------- -------
Pro forma basic
earnings per share $ 0.76 $ 0.76 - $ 2.13 $ 2.28 # (6.6)
================ ================
Pro forma diluted
average shares
outstanding 505.9 507.7 (0.4) 505.7 508.9 (0.6)
================ ================
Pro forma diluted earnings per share:
Income before
extraordinary item $ 0.75 $ 0.76 (1.3) $ 2.11 $ 2.25 (6.2)
Extraordinary item:
Early extinguishment
of debt - (0.01) - - (0.01) -
------- ------- ------- -------
Pro forma diluted
earnings per share $ 0.75 $ 0.75 - $ 2.11 $ 2.25 # (6.2)
================ ================
<FN>
<F1>
(1) The separation of U S WEST, Inc. ("Old U S WEST") into two independent
companies, U S WEST, Inc. ("New U S WEST") and MediaOne Group, Inc.,(the
"Separation") occurred on June 12, 1998 (the "Separation Date"). The pro forma
results for the nine months ended September 30, 1998 and for the three and nine
months ended September 30, 1997 give effect to the Separation, including the
assumption of indebtedness and the issuance of shares in connection with the Dex
transaction, as if the Separation had been consummated as of the beginning of
the periods indicated.
<F2>
# Amount does not foot due to rounding of the individual components.
</FN>
6