EXHIBIT 99
[U S WEST LOGO]
Investor Relations
NEWS FLASH
October 22, 1999
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Note to investors: In lieu of a live call, U S WEST will have a recorded call
available beginning at 7:30 a.m. MDT (9:30 a.m. EDT) today to discuss third
quarter, 1999 results. To access the recording, call 1-888-203-1112 and enter
reservation number 796737. That recording will be available through Friday, Oct.
29 at 6 p.m.(MDT).
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U S WEST Reports Solid Third Quarter Earnings
-- Normalized EPS Rises 10.7 Percent;
Revenues Continue at Near 7 Percent Growth Rate;
PCS, DSL, other New Services Drive Increases --
DENVER - U S WEST (NYSE: USW) today announced third quarter normalized diluted
earnings per share of $0.83 on normalized net income of $421 million. Normalized
EPS rose $0.08 or 10.7 percent, aided by a $0.03 one-time gross receipts tax
refund, and net income improved by 11.1 percent from third quarter 1998.
Also during the quarter the company reported that EBITDA (Earnings Before
Interest, Taxes, Depreciation, Amortization and other) grew to $1.465 billion,
up 8 percent from the third quarter of last year.
The company achieved these results based on continued strong revenue growth of
6.6 percent, capitalizing on success in PCS, data, custom calling features and
private line services. Quarterly performance was also aided by continuing
moderation of 1999 operating expense growth, from a normalized 7.3 percent in
second quarter to 5.5 percent this quarter.
"We've delivered what we said we would financially," said Sol Trujillo,
chairman, president and CEO of U S WEST. "What's really exciting is that U S
WEST continues to lead the industry in connecting more of its customers to
next-generation services than any other player - large or small."
Trujillo pointed to the following as examples of that leadership:
o Penetration for the company's high-speed MegaBit DSL services are much
stronger than any other DSL provider in the nation at 338 subscribers
per Central Office and 10 percent of qualified, on-line households.
o Some 56 percent of subscribers to U S WEST's wireless PCS product now
take advantage of the unique integrated wireline-wireless capabilities
of Advanced PCS.
o 75-percent plus of third quarter revenue growth is from data- and
wireless-related products.
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U S WEST Third Quarter Earnings - Page 2
o U S WEST leads the industry with 215,000-plus subscribers to
privacy-related products including Caller ID with Privacy Plus and No
Solicitation.
"These and other services each represent new pipelines for growth that the
company is just beginning to tap," Trujillo added. "These next-generation
services are at the heart of U S WEST's plan to develop strong new growth
engines that we expect will deliver superior results in the future."
Growth Product Highlights
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Division Revenues (comparisons are Key Product Subscriber/Penetration Levels (comparisons are 3Q99
3Q99 over 3Q98) over 3Q98)
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Data o $443 million, up o U S o To date, total nearly 307,000, up almost
33 percent WEST.net 86,000 for the quarter and 335 percent over 3Q98
totals.
o !NTERPRISE data
revenues were $221 o MegaBit o Added about 30,000 for the quarter. To date at
million for the (DSL) about 80,000.
quarter, up 58 services o USW serves 338 subs. per Central Office, with
percent. 237 equipped COs.
o More than 90 percent of customers are
choosing to self-install, avoiding a truck
roll and reducing provisioning costs.
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PCS o ARPU of $58. o Advanced o Added nearly 60,000 during the quarter for a
PCS total of 344,000.
o Total quarterly
revenue of $69 o Weighted average penetration is now 2.6
million, up 176 percent.
percent.
o Wireless o 56 percent of users now subscribe to at least
Integrated one of the product's integrated features
features
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Dex o Quarterly o Internet o Sold more than 9,000 web sites to small
directory revenues Yellow Pages businesses since 1998 introduction.
grew by 7.3 percent. (IYP)
o Year-to-date o Web Site o IYP usage was up 166 percent.
E-Commerce-related Service
revenues grew 71 o Dex and U S WEST's Small Business Group began
percent to more than offering "Virtual Storefront" to small businesses,
$16 million. a package of Internet access, high-speed transport
and a three-page web site for under $100 per month.
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During the quarter, the company's total "growth subscribers" (customers for the
company's PCS, DSL and Internet access service) were up almost 180,000 - more
than double the amount from third quarter 1998. Growth subscribers now total
more than 730,000. Investment in growth initiatives negatively impacted EPS by
$0.21 for the quarter versus $0.12 for third quarter, 1998.
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U S WEST Third Quarter Earnings - Page 3
During the quarter, the company saw continuing impacts from competition in its
local telephony business in both line growth and pricing. It now has re-sold
nearly 505,000 lines to competitors, up from 475,000 lines at the end of second
quarter.
Other third quarter highlights include:
Volumes and Penetration:
o Residential subscriber levels at the end of the quarter for the company's
most popular custom calling features continued to grow, with Caller ID and
Call Waiting both at 37 percent penetration. Voice Messaging exceeded the
20 percent level during the quarter, the highest penetration rate in the
industry.
o So far this year, the company has signed up more than 215,000 customers for
several of its new privacy-related custom-calling features, including
Caller ID with Privacy Plus and No Solicitation.
o Subscribers to the company's bundled Custom Choice package for residential
customers surpassed one million during the quarter and now stand at 1.1
million. In June, the company began offering Custom Choice to small
business customers, and has signed up 20,000 subscribers through third
quarter.
o The number of primary rate ISDN lines in service increased 88 percent.
Total ISDN lines grew 26 percent.
o The addition of 504,000 access lines over the past year for a growth rate
of 3.1 percent. On a "voice-grade-equivalent" basis, business access line
growth was 13.3 percent.
o On the small business side, total access lines equipped with Centrex 21
services grew to 534,000, a 54 percent year-over-year increase.
Sales and Revenues:
o An 18.1 percent increase compared with third quarter 1998 in private line
and special access revenues, which totaled $304 million - a reflection of
the company's growing data networking services business and its ability to
successfully compete in one of the most highly competitive segments of the
telecommunications market.
o During the quarter, consumer revenues from vertical services increased by
nearly 15 percent, compared to third quarter 1998.
o Frame Relay revenues increased by nearly 34 percent quarter-over-quarterand
ISDN revenues jumped by 71 percent quarter-over-quarter.
o The company's Home Office channel generated revenues of nearly $18 million
during the quarter, an increase of 35 percent. The Home Office channel
serves the unique needs of the growing number of home-based businesses in U
S WEST's region.
o Toll revenues dropped by 30 percent during the quarter.
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U S WEST Third Quarter Earnings - Page 4
Costs and Margins:
o Capital expenditures were up 78 percent during the quarter, rising to $1.1
billion. For the year, capital expenditures are up 47 percent at $2.8
billion. The increases have helped bolster service levels for traditional
services and aided in deployment of new services.
o Absorbed approximately $100 million in expenses related to interconnection,
number portability and Year 2000 compliance during the quarter. To date,
the company has spent $232 million in expense and capital on Y2K. It
expects to spend another $48 million during the balance of 1999.
o Employee-related expenses grew by 8.2 percent during the quarter, due in
part with efforts related to keeping up with service demands. These
expenses include a net addition of more than 900 employees during the
quarter and nearly 2,900 since third quarter, 1998 - almost 1,500 of which
have been added specifically to keep up with service demands.
The quarterly results include a one-time $25 million ($0.03 EPS) refund from a
state gross receipts tax. The company had expected this refund before the end of
the year.
During the quarter, the company made a one-time payment of $280 million to
Global Crossing, Ltd. as part of the break-up fee to dissolve a proposed merger
between the two firms. This merger was superseded by U S WEST's existing merger
agreement with Qwest. Half of the payment to Global Crossing was made in cash
(using a loan from Qwest); the remainder was paid in shares of Global Crossing
stock, which U S WEST purchased in late June. This payment - and other minor
merger-related expense - had a $0.56 EPS impact during the quarter, bringing
U S WEST's reported EPS to $0.27.
U S WEST (NYSE: USW) provides a full range of telecommunications services -
including wireline, wireless PCS, data networking, directory and information
services - to more than 25 million customers nationally and in 14 western and
midwestern states. More information about U S WEST can be found on the Internet
at http://www.uswest.com.
Safe Harbor Statement: This document contains statements about expected future
events and financial results that are forward-looking and subject to risks and
uncertainties. For these statements, we claim the safe harbor for
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Factors that could cause actual results to differ
from expectations include: (i) greater than anticipated competition from new
entrants into the local exchange, intraLATA toll, wireless, data and directories
markets, causing loss of customers and increased price competition; (ii) changes
in demand for U S WEST's products and services, including optional custom
calling features; (iii) higher than anticipated employee levels, capital
expenditures and operating expenses (such as costs associated with
interconnection and year 2000 remediation); (iv) the loss of significant
customers; (v) pending and future state and federal regulatory changes affecting
the telecommunications industry, including changes that could have an impact on
the competitive environment in the local exchange market; (vi) acceleration of
the deployment of advanced new services to customers, such as broadband data,
wireless and video services, which would require substantial expenditure of
financial and other resources; (vii) a change in economic conditions in the
various markets served by U S WEST's operations; (viii) higher than anticipated
start-up costs associated with new business opportunities; (ix) delays in U S
WEST's ability to begin offering interLATA long-distance services; (x) consumer
acceptance of broadband services, including telephony, data and wireless
services; (xi) delays in the development of anticipated technologies, or the
failure of such technologies to perform according to expectations; and (xii)
timing and completion of the recently announced merger with Qwest Communications
International Inc. These cautionary statements by U S WEST should not be
construed as exhaustive or as any admission regarding the adequacy of
disclosures made by U S WEST. U S WEST cannot always predict or determine after
the fact what factors would cause actual results to differ materially from those
indicated by the forward-looking statements or other statements. In addition,
readers are urged to consider statements that include the terms "believes",
"belief", "expects", "plans", "objectives", "anticipates", "intends", "targets",
or the like to be uncertain and forward-looking. All cautionary statements
should be read as being applicable to all forward-looking statements wherever
they appear. U S WEST does not undertake any obligation to publicly update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.
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Further information: Larry Thede, 303-896-3550; Martha Daniele Paine,
303-896-5706; Kent Evans, 303-896-3096.
NOTE: This release and the financial statements will be available on the
Internet after 7:15 a.m. (MDT) by accessing U S WEST's Internet site:
www.uswest.com.