CONSOLIDATED PRO FORMA STATEMENTS OF INCOME (1) U S WEST, INC.
(UNAUDITED)
Quarter Ended Year Ended
In millions, except December 31, % December 31, %
per share amounts 1998 1997 Change 1998 1997 Change
- -------------------- ------- ------- -------------- ------- ------
OPERATING REVENUES
Local service $1,408 $ 1,277 10.3 $ 5,525 $ 5,016 10.1
Interstate access 714 638 11.9 2,816 2,666 5.6
Intrastate access 206 153 34.6 822 761 8.0
Long-distance
network 184 164 12.2 779 885 (12.0)
Directory services 342 318 7.5 1,277 1,197 6.7
Other services 350 272 28.7 1,159 954 21.5
---------------- -------- --------
Total operating rev. 3,204 2,822 13.5 12,378 11,479 7.8
---------------- -------- --------
OPERATING EXPENSES
Employee-related 1,133 1,038 9.2 4,312 3,953 9.1
Other operating 746 750 (0.5) 2,818 2,587 8.9
Depreciation & amort 574 547 4.9 2,199 2,163 1.7
---------------- -------- --------
Total operating exp. 2,453 2,335 5.1 9,329 8,703 7.2
---------------- -------- --------
Operating income 751 487 54.2 3,049 2,776 9.8
Interest expense 165 167 (1.2) 660 667 (1.0)
Gains on sales of rural
telephone exchanges - - - - 77 -
Gain on sale of
investment in Bellcore - 53 - - 53 -
Other expense 10 21 (52.4) 87 72 20.8
---------------- -------- --------
Income before income
taxes and extra-
ordinary item 576 352 63.6 2,302 2,167 6.2
Income tax provision 208 125 66.4 866 802 8.0
---------------- -------- --------
Income before
extraordinary item 368 227 62.1 1,436 1,365 5.2
Extraordinary item:
Early extinguishment
of debt - net of tax - - - - (3) -
---------------- -------- --------
PRO FORMA
NET INCOME $ 368 $ 227 62.1 $ 1,436 $ 1,362 5.4
================ ======== ========
5
CONSOLIDATED PRO FORMA STATEMENTS OF INCOME, (1) U S WEST, INC.
CONTINUED (UNAUDITED)
Quarter Ended Year Ended
In millions, except December 31, % December 31, %
per share amounts 1998 1997 Change 1998 1997 Change
- -------------------- ------- ------- -------------- ------- ------
Pro forma basic earnings per share:
Income before
extraordinary item $ 0.73 $ 0.45 62.2 $ 2.86 $ 2.73 4.8
Extraordinary item:
Early extinguishment
of debt - - - - (0.01) -
------- ------- ------- -------
Pro forma basic
earnings per share $ 0.73 $ 0.45 62.2 $ 2.86 $ 2.73 # 4.8
================ ======== ========
Pro forma basic
average shares
outstanding 502.7 500.2 0.5 501.8 499.1 0.5
================ ======== ========
Pro forma diluted earnings per share:
Income before
extraordinary item $ 0.73 $ 0.45 62.2 $ 2.84 $ 2.71 4.8
Extraordinary item:
Early extinguishment
of debt - - - - (0.01) -
------- ------- ------- -------
Pro forma diluted
earnings per share $ 0.73 $ 0.45 62.2 $ 2.84 $ 2.70 5.2
================ ======== ========
Pro forma diluted
average shares
outstanding 508.0 503.7 0.9 506.2 507.6 (0.3)
================ ======== ========
<FN>
<F1>
(1) The separation of U S WEST, Inc. into two independent companies, U S WEST,
Inc. ("New U S WEST") and MediaOne Group, Inc.,(the "Separation") occurred on
June 12, 1998. The pro forma results for the years ended December 31, 1998 and
1997 and for fourth quarter 1997 give effect to the Separation, including the
assumption of indebtedness and the issuance of shares in connection with the
alignment of the directory business with New U S WEST, (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