CONSOLIDATED STATEMENTS OF CASH FLOWS U S WEST, Inc. (UNAUDITED) Nine Months Ended September 30, In millions 1998 1997 - - ------------------------------------------------- -------- --------- OPERATING ACTIVITIES Net income $ 1,140 $ 1,256 Adjustments to net income: Depreciation and amortization 1,625 1,616 Gains on sales of rural telephone exchanges - (77) Deferred income taxes and amortization of investment tax credits 102 7 Changes in operating assets and liabilities: Accounts receivable (18) 40 Inventories, supplies and other current assets (49) (75) Accounts payable and accrued liabilities 116 245 Other - net 34 141 - - ------------------------------------------------- -------- --------- Cash provided by operating activities 2,950 3,153 - - ------------------------------------------------- -------- --------- INVESTING ACTIVITIES Expenditures for property, plant and equipment (1,937) (1,322) Proceeds from (payments on) disposals of property, plant and equipment (14) 27 Purchase of PCS licenses (18) (57) Proceeds from sales of rural telephone exchanges - 51 Other (39) - - - ------------------------------------------------- -------- --------- Cash (used for) investing activities (2,008) (1,301) - - ------------------------------------------------- -------- --------- FINANCING ACTIVITIES Net proceeds from (repayments of) short-term debt 1,519 (701) Net (repayments of) proceeds from issuance of Old U S WEST debt (198) 303 Proceeds from issuance of long-term debt 3,066 - Repayment of Old U S WEST debt in connection with the DEX Alignment (3,829) - Repayments of long-term debt (411) (412) Dividends paid on common stock (787) (733) Dividends paid to Old U S WEST (194) (243) Payment to Old U S WEST for debt refinancing costs (140) - Return of capital from Old U S WEST 13 - Proceeds from issuance of common stock 60 50 Purchases of treasury stock (46) - - - ------------------------------------------------- -------- --------- Cash (used for) financing activities (947) (1,736) - - ------------------------------------------------- -------- --------- CASH AND CASH EQUIVALENTS Increase (decrease) (5) 116 Beginning balance 27 80 - - ------------------------------------------------- -------- --------- Ending balance $ 22 $ 196 ================================================= ======== ========= 11