CONSOLIDATED STATEMENTS OF INCOME (1) U S WEST, INC.
(UNAUDITED)
Quarter Ended Year Ended
December 31, % December 31, %
In millions 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 165 101 63.4 543 405 34.1
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 taxes
and extraordinary
item 576 418 37.8 2,419 2,429 (0.4)
Income tax provision 208 150 38.7 911 902 1.0
--------------- -------- --------
Income before
extraordinary item 368 268 37.3 1,508 1,527 (1.2)
Extraordinary Item:
Early extinguishment
of debt - net of tax - - - - (3) -
--------------- -------- --------
NET INCOME $ 368 $ 268 37.3 $ 1,508 $ 1,524 (1.0)
=============== ======== ========
<FN>
<F1>
(1) The historical results presented reflect historical financial information as
if the businesses that comprise New U S WEST operated as a separate entity for
the periods presented. The effects of the Separation, including the assumption
of indebtedness and the issuance of shares in connection with the Dex
transaction, have been included in the historical results as of the Separation
Date.
</FN>