CONSOLIDATED PRO FORMA STATEMENTS OF INCOME U S WEST, INC. NORMALIZED RESULTS (UNAUDITED) Quarter Ended December 31, In millions except Reported One Time NormalizReportedRegulatoryNormalized % per share amounts 1998 Charge (1 1998 1997 Accrual 1997 Change - -------------------- ----------------------------------------- ------------- ------ OPERATING REVENUES Local service 1,408 - 1,408 1,277 86 $ 1,363 3.3 Interstate access 714 - 714 638 25 663 7.7 Intrastate access 206 - 206 153 68 221 (6.8) Long distance 184 - 184 164 51 215 (14.4) Directory services 342 - 342 318 - 318 7.5 Other services 350 - 350 272 - 272 28.7 -------- -------- ------- ------- --------- ---------- Total operating revenu 3,204 - 3,204 2,822 230 3,052 5.0 -------- -------- ------- ------- --------- ---------- OPERATING EXPENSES Employee-related 1,133 - 1,133 1,038 - 1,038 9.2 Other operating 648 - 648 642 - 642 0.9 Taxes other than income tax 98 - 98 108 - 108 (9.3) Depreciation & amort 574 - 574 547 - 547 4.9 -------- -------- ------- ------- --------- ---------- Total operating expens 2,453 - 2,453 2,335 - 2,335 5.1 -------- -------- ------- ------- --------- ---------- Operating income 751 - 751 487 230 717 4.7 Interest expense 165 - 165 167 - 167 (1.2) Gains on rural sales - - - - - - Gain on Bellcore - - - 53 - 53 (100.0) Other expense 10 - 10 21 (20) 1 900.0 -------- -------- ------- ------- --------- ---------- Income before income taxes and extraordinary ite 576 - 576 352 250 602 (4.3) Income Tax Provision 208 - 208 125 98 223 (6.7) -------- -------- ------- ------- --------- ---------- Income before extraordinary item 368 - 368 227 152 379 (2.9) Extraordinary item - - - - - - -------- -------- ------- ------- --------- ---------- NET INCOME 368 - 368 227 152 379 (2.9) Adjustment to normalize net income - - - (32) - (32) (100.0) PRO FORMA NORMALIZED -------- -------- ------- ------- --------- ---------- NET INCOME 368 - 368 195 152 $ 347 6.1 =========================================== ========= Diluted Average Shares Outstanding 508.0 508.0 508.0 503.7 503.7 503.7 Diluted EPS 0.73 - 0.73 0.39 0.30 $ 0.69 5.8 <FN> <F1> (1) Separation expense and asset impairment. </FN>