34 
_____________________________________________________________________________ 
__________________________________________________________________ 
 
                      SECURITIES AND EXCHANGE COMMISSION 
 
                           Washington, D.C.  20549 
                                       
                                  --------- 
                                  FORM 10-Q/A 
                                  --------- 
 
         [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
                       SECURITIES EXCHANGE ACT OF 1934 
 
              For the Quarterly Period Ended September 30, 1995 
 
                                      OR 
 
        [   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE 
                       SECURITIES EXCHANGE ACT OF 1934 
 
              For the transition period from _______ to _______ 
 
                        Commission File Number 1-8611 
 
                                U S WEST, Inc. 
 
      A Delaware Corporation                IRS Employer No. 84-0926774 
 
 
            7800 East Orchard Road, Englewood, Colorado 80111-2526 
 
                        Telephone Number 303-793-6500 
 
Indicate by check mark whether the registrant (1) has filed all reports 
required  to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
registrant  was  required  to  file such reports), and (2) has been subject to 
such filing requirements for the past 90 days.  Yes X_ No __ 
 
The number of shares outstanding of U S WEST, Inc.'s common stock (net of 
shares held in treasury), as of November 1, 1995, was: 
 
U S WEST Communications Group Common Stock - 471,931,905 shares; 
U S WEST Media Group Common stock - 471,921,768 shares. 
 
<PAGE> 
 
                                U S WEST, Inc. 
                                  Form 10-Q 
                              TABLE OF CONTENTS 
 
                        PART I - FINANCIAL INFORMATION 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                                                                         <C> 
 
Item                                                                        Page 
1.  U S WEST, Inc. Financial Information 
Consolidated Statements of Income - 
Three and nine months ended September 30, 1995 and 1994                        3 
 
Consolidated Balance Sheets - 
September 30, 1995 and December 31, 1994                                       4 
Consolidated Statements of Cash Flows - 
Nine months ended September 30, 1995 and 1994                                  6 
Consolidated Statements of Shareowners' Equity - 
Nine months ended September 30, 1995 and 1994                                  7 
Notes to Consolidated Financial Statements                                     8 
2.  U S WEST, Inc. Management's Discussion and Analysis of Financial          15 
Condition and Results of Operations 
 
1.  Communications Group Financial Information 
Combined Statements of Income - 
Three and nine months ended September 30, 1995 and 1994                       31 
Combined Balance Sheets - 
September 30, 1995 and December 31, 1994                                      32 
Combined Statements of Cash Flows - 
Nine months ended September 30, 1995 and 1994                                 34 
Notes to Combined Financial Statements                                        35 
2.  Communications Group Management's Discussion and Analysis of Financial 
Condition and Results of Operations                                           39 
 
1.  Media Group Financial Information 
Combined Statements of Income - 
Three and nine months ended September 30, 1995 and 1994                       50 
Combined Balance Sheets - 
September 30, 1995 and December 31, 1994                                      51 
Combined Statements of Cash Flows - 
Nine months ended September 30, 1995 and 1994                                 53 
Notes to Combined Financial Statements                                        54 
2.  Media Group Management's Discussion and Analysis of Financial 
Condition and Results of Operations                                           61 
 
 
PART II - OTHER INFORMATION 
 
<CAPTION> 
 
 
 
<S>                                   <C> 
 
1.  Legal Proceedings                 74 
6.  Exhibits and Reports on Form 8-K  74 
 
</TABLE> 
 
 
Form 10-Q - Part I 
<TABLE> 
 
<CAPTION> 
 
CONSOLIDATED STATEMENTS OF INCOME                    U S WEST, Inc. 
(Unaudited) 
 
 
<S>                                            <C>          <C>          <C>          <C> 
 
                                                    3 Mos       3 Mos.       9 Mos.       9 Mos. 
                                               Ended        Ended        Ended        Ended 
                                               Sept. 30,    Sept. 30,    Sept. 30,    Sept. 30, 
Dollars in million (except per share amounts)        1995         1994         1995         1994 
Sales and other revenues                       $    2,964   $    2,765   $    8,686   $    8,114 
 
Employee-related expenses                           1,007          968        2,982        2,822 
Other operating expenses                              592          532        1,661        1,527 
Taxes other than income taxes                         103          109          330          322 
Depreciation and amortization                         573          509        1,695        1,519 
Interest expense                                      137          104          404          323 
Equity losses in unconsolidated ventures               38           26          128           83 
Gains on asset sales: 
    Rural telephone exchanges                          34            -          112           48 
    Paging assets                                       -            -            -           68 
Guaranteed minority interest expense                    2            -            2            - 
 Other income (expense) - net                          (8)          (3)          (6)          11 
Income before income taxes and 
       extraordinary item                             538          514        1,590        1,645 
Provision for income taxes                            213          196          617          628 
 
Income before extraordinary item                      325          318          973        1,017 
Extraordinary item: 
  Early extinguishment of debt, net of tax             (9)           -           (9)           - 
NET INCOME                                            316          318          964        1,017 
Preferred dividends                                     1            -            3            - 
Earnings available for common stock            $      315   $      318   $      961   $    1,017 
Earnings per common share: 
  Income available for common stock 
      before extraordinary item                $     0.69   $     0.70   $     2.06   $     2.25 
  Extraordinary item                                (0.02)           -        (0.02)           - 
EARNINGS PER COMMON SHARE                      $     0.67   $     0.70   $     2.04   $     2.25 
DIVIDENDS PER COMMON SHARE                     $    0.535   $    0.535   $    1.605   $    1.605 
 AVERAGE COMMON SHARES 
   OUTSTANDING (thousands)                        471,229      454,997      470,076      451,037 
 
<FN> 
 
See Notes to Consolidated Financial Statements. 
</FN> 
</TABLE> 
 
 
 
<PAGE> 
 
Form 10-Q - Part I 
<TABLE> 
 
<CAPTION> 
 
CONSOLIDATED BALANCE SHEETS                     U S WEST, Inc. 
(Unaudited) 
 
 
<S>                                      <C>             <C> 
 
                                         September 30,   December 31, 
Dollars in millions                                1995           1994 
ASSETS 
Current assets 
     Cash and cash equivalents           $          108  $         209 
     Accounts and notes receivable                1,932          1,693 
     Inventories and supplies                       248            189 
     Deferred tax asset                             339            352 
     Other                                          310            323 
Total current assets                              2,937          2,766 
Gross property, plant and equipment              32,278         31,014 
Accumulated depreciation                         17,936         17,017 
Property, plant and equipment - net              14,342         13,997 
Investment in Time Warner Entertainment           2,501          2,522 
Intangible assets - net                           1,824          1,858 
Investment in international ventures              1,361            881 
Net investment in assets held for sale              418            302 
Other assets                                      1,378            878 
Total assets                             $       24,761  $      23,204 
 
<FN> 
 
See Notes to Consolidated Financial Statements. 
</FN> 
</TABLE> 
 
 
 
<PAGE> 
 
Form 10-Q - Part I 
<TABLE> 
 
<CAPTION> 
 
CONSOLIDATED BALANCE SHEETS                      U S WEST, Inc. 
(Unaudited), Continued 
 
 
<S>                                                        <C>              <C> 
 
                                                           September 30,    December 31, 
Dollars in millions                                                  1995            1994  
LIABILITIES AND SHAREOWNERS' EQUITY 
Current liabilities 
     Short-term debt                                       $        3,640   $       2,837  
     Accounts payable                                                 859             944  
     Employee compensation                                            408             367  
     Dividends payable                                                253             251  
     Current portion of restructuring charges                         348             337  
      Other                                                         1,428           1,278  
Total current liabilities                                           6,936           6,014  
Long-term debt                                                      5,144           5,101  
Postretirement and other postemployment benefit 
    obligations                                                     2,372           2,502  
Deferred taxes, credits and other                                   1,894           2,154  
Company-obligated mandatorily redeemable preferred 
    securities of subsidiary trust holding solely Company 
    guaranteed debentures                                             600               -  
Preferred stock subject to mandatory redemption                        51              51  
Common shareowners' equity: 
     Common shares - no par, 2,000,000,000 
       authorized, 471,650,698 and 469,343,048 
       outstanding, respectively                                    8,161           8,056  
     Cumulative deficit                                              (223)           (458) 
     LESOP guarantee                                                 (157)           (187) 
      Foreign currency translation adjustments                        (17)            (29) 
Total common shareowners' equity                                    7,764           7,382  
Total liabilities and common shareowners' equity           $       24,761   $      23,204  
 
<FN> 
 
See Notes to Consolidated Financial Statements. 
</FN> 
</TABLE> 
 
 
 
<PAGE> 
 
Form 10-Q - Part I 
<TABLE> 
 
<CAPTION> 
 
CONSOLIDATED STATEMENTS OF CASH FLOWS 
  (Unaudited)                                                                          
  U S WEST, Inc. 
 
 
<S>                                                                 <C>       <C> 
 
Dollars in millions 
Nine Months Ended September 30,                                        1995      1994  
OPERATING ACTIVITIES 
   Net income                                                       $   964   $ 1,017  
   Adjustments to net income 
      Depreciation and amortization                                   1,695     1,519  
      Postretirement medical and life costs, net of cash fundings       (86)      (13) 
      Gains on asset sales: 
        Rural telephone exchanges                                      (112)      (48) 
        Paging assets                                                     -       (68) 
      Equity losses in unconsolidated ventures                          128        83  
      Deferred income taxes and amortization of investment 
         tax credits                                                     93       192  
   Changes in operating assets and liabilities: 
      Restructuring payments                                           (268)     (167) 
      Accounts and notes receivable                                    (219)     (173) 
      Inventories, supplies and other                                   (81)     (115) 
      Accounts payable and accrued liabilities                           88       108  
   Other adjustments - net                                               21        (4) 
   Cash provided by operating activities                              2,223     2,331  
INVESTING ACTIVITIES 
   Expenditures for property, plant and equipment                    (1,943)   (1,945) 
   Investment in international ventures                                (576)     (214) 
   Proceeds from disposals of property, plant and equipment             166        49  
   Cash (to) net investment in assets held for sale                    (108)        -  
   Proceeds from sale of paging assets                                    -       143  
   Other - net                                                         (274)      (97) 
   Cash (used for) investing activities                              (2,735)   (2,064) 
FINANCING ACTIVITIES 
   Net proceeds from issuance of short-term debt                        688       403  
   Proceeds from issuance of long-term debt                             499       251  
   Repayments of long-term debt                                        (640)     (408) 
   Proceeds from issuance of trust originated preferred 
       securities                                                       581         -  
   Dividends paid on common stock                                      (697)     (663) 
   Proceeds from issuance of common stock                                43       329  
   Proceeds from issuance of preferred stock                              -        50  
   Purchases of treasury stock                                          (63)        -  
   Cash provided by (used for) financing activities                     411       (38) 
   Cash (used for) provided by continuing operations                   (101)      229  
   Cash to discontinued operations                                        -       (59) 
 CASH AND CASH EQUIVALENTS 
   Increase (decrease)                                                 (101)      170  
   Beginning balance                                                    209       128  
   Ending balance                                                   $   108   $   298  
 
<FN> 
 
See Notes to Consolidated Financial Statements. 
</FN> 
</TABLE> 
 
 
 
<PAGE> 
 
Form 10-Q - Part I 
<TABLE> 
 
<CAPTION> 
 
CONSOLIDATED STATEMENTS OF 
        SHAREOWNERS' EQUITY  (Unaudited)              U S WEST, Inc. 
 
 
<S>                                              <C>          <C> 
 
Dollars in millions 
Nine Months Ended September 30,                        1995         1994  
COMMON SHARES 
   Balance at beginning of period                $    8,056   $    6,996  
   Issuance of common stock                             103          179  
   Settlement of litigation                               -          210  
   Benefit trust contribution (OPEB)                     61          185  
   Purchase of treasury stock                           (63)           -  
   Other                                                  4           (2) 
   Balance at end of period                           8,161        7,568  
CUMULATIVE DEFICIT 
   Balance at beginning of period                      (458)        (857) 
   Net income                                           964        1,017  
   Dividends declared                                  (760)        (730) 
   Market value adjustment for debt securities           31          (49) 
   Balance at end of period                            (223)        (619) 
LESOP GUARANTEE 
   Balance at beginning of period                      (187)        (243) 
   Activity                                              30           27  
   Balance at end of period                            (157)        (216) 
FOREIGN CURRENCY TRANSLATION 
   ADJUSTMENTS 
   Balance at beginning of period                       (29)         (35) 
    Activity                                             12           26  
   Balance at end of period                             (17)          (9) 
TOTAL COMMON SHAREOWNERS' EQUITY                 $    7,764   $    6,724  
COMMON SHARES AUTHORIZED AT 
   SEPTEMBER 30, (Thousands)                      2,000,000    2,000,000  
COMMON SHARES OUTSTANDING (Thousands) 
   Balance at beginning of period                   469,343      441,140  
   Issuance of common stock                           2,513        4,376  
   Settlement of litigation                               -        5,506  
   Benefit trust contribution (OPEB)                  1,500        4,600  
   Purchase of treasury stock                        (1,705)           -  
   Balance at end of period                         471,651      455,622  
 
<FN> 
 
See Notes to Consolidated Financial Statements. 
</FN> 
</TABLE> 
 
 
 
<PAGE> 
 
Form 10-Q - Part I 
 
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
                            (Dollars in millions) 
                                 (Unaudited) 
 
A.  Recapitalization Plan 
 
On October 31, 1995, the shareholders of U S WEST, Inc., a Colorado 
corporation ("U S WEST Colorado") voted to approve a proposal (the 
"Recapitalization  Plan")  adopted  by the Board of Directors to reincorporate 
from Colorado to Delaware and create two classes of common stock that are 
intended to reflect separately the performance of the communications and 
multimedia businesses.  Under the Recapitalization Plan, shareholders approved 
an  Agreement and Plan of Merger between U S WEST Colorado and U S WEST, Inc., 
a  Delaware  corporation ("U S WEST" or "Company"), pursuant to which U S WEST 
continues  as  the  surviving corporation.  In connection with the merger, the 
Certificate  of  Incorporation  of  U S WEST has been amended and restated to, 
among  other  things,  designate  two classes of common stock of U S WEST, one 
class  of  which  is  authorized as U S WEST Communications Group Common Stock 
("Communications  Stock"), and the other class is authorized as U S WEST Media 
Group Common Stock ("Media Stock").  Effective November 1, 1995, each share of 
common stock of U S WEST Colorado was converted into one share of 
Communications Stock and one share of Media Stock. 
 
The  Communications Stock and Media Stock are designed to provide shareholders 
with separate securities that are intended to reflect separately the 
communications businesses of U S WEST Communications, Inc. ("U S WEST 
Communications") and certain other subsidiaries of the Company (the 
"Communications  Group")  and  the Company's multimedia businesses (the "Media 
Group" and, together with the Communications Group, the "Groups"). 
 
The  Communications  Group  is  comprised of U S WEST Communications, U S WEST 
Communications Services, Inc., U S WEST Communications Federal Services, Inc., 
U  S WEST Advanced Technologies, Inc. and U S WEST Business Resources, Inc.  U 
S  WEST  Communications comprised approximately 98 percent of the revenues and 
assets of the Communications Group in 1994. 
 
The  Media  Group  is comprised of U S WEST Marketing Resources Group, Inc., a 
publisher  of  White  and  Yellow Pages telephone directories, and provider of 
multimedia content and services, U S WEST NewVector Group, Inc., which 
provides  communications  and  information products and services over wireless 
networks,  U S WEST Multimedia Communications, Inc., which owns domestic cable 
television  operations  and  investments, and U S WEST International Holdings, 
Inc., which primarily owns investments in international cable and 
telecommunications, wireless communications and directory publishing 
operations. 
 
 
<PAGE> 
 
Form 10-Q - Part I 
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued 
                            (Dollars in millions) 
                                 (Unaudited) 
 
Dividends  to be paid to the holders of Communications Stock will initially be 
$0.535  per  share per quarter.  Dividends on the Communications Stock will be 
paid  at the discretion of the Board of Directors of U S WEST, based primarily 
upon  the financial condition, results of operations and business requirements 
of  the  Communications  Group and the Company as a whole.  With regard to the 
Media  Stock,  the  Board of Directors of U S WEST currently intends to retain 
future  earnings,  if any, for the development of the Media Group's businesses 
and does not anticipate paying dividends on the Media Stock in the foreseeable 
future. 
 
 B. Summary of Significant Accounting Policies 
 
Consolidated Financial Statements 
 
The  Consolidated Financial Statements have been prepared by U S WEST pursuant 
to the rules and regulations of the Securities and Exchange Commission 
("SEC").    Certain information and footnote disclosures normally accompanying 
financial statements prepared in accordance with generally accepted accounting 
principles have been condensed or omitted pursuant to such SEC rules and 
regulations.    In  the  opinion of the Company's management, the Consolidated 
Financial Statements include all adjustments, consisting of only normal 
recurring  adjustments,  necessary to present fairly the financial information 
set forth therein.  It is suggested that these Consolidated Financial 
Statements be read in conjunction with the financial statements and notes 
thereto  included  in the Company's proxy statement mailed to all shareholders 
on September 5, 1995. 
 
Certain  reclassifications  within  the Consolidated Financial Statements have 
been made to conform to the current year presentation. 
 
 
<PAGE> 
 
 Form 10-Q - Part I 
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued 
                            (Dollars in millions) 
                                 (Unaudited) 
 
C.     Investment in Time Warner Entertainment 
 
On September 15, 1993, U S WEST acquired 25.51 percent pro-rata priority 
capital  and  residual  equity  interests in Time Warner Entertainment Company 
L.P. ("TWE").  Summarized operating results for TWE follow: 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                             <C>           <C>          <C>          <C> 
 
                                Three Mos.    Three Mos.   Nine Mos.    Nine Mos. 
Dollars in millions             Ended         Ended        Ended        Ended 
                                Sept. 30,     Sept. 30     Sept. 30     Sept. 30, 
                                       1995          1994        1995         1994 
Revenues                        $     2,324   $     2,203  $    6,762   $    6,177 
Operating expenses*                   2,056         1,968       6,037        5,512 
Interest and other - net**              195           170         556          480 
Income before income taxes 
     and extraordinary item     $        73   $        65  $      169   $      185 
Income before extraordinary 
     item                                47            41         107          145 
Extraordinary item, net of tax          (24)            -         (24)           - 
Net income                      $        23   $        41  $       83   $      145 
<FN> 
 
<F1> 
*     Includes 1995 and 1994 depreciation and amortization of $260 and $254, and 
$761 and $707 for the three and nine months ended, respectively. 
<F2> 
**     Includes 1995 and 1994 corporate services of $17 and $15, and $47 and $45 
for the three months and nine months ended, respectively. 
 </FN> 
</TABLE> 
 
 
The Company accounts for its investment in TWE under the equity method of 
accounting. U S WEST's recorded share of TWE operating results represents 
allocated  TWE  net income or loss adjusted for the amortization of the excess 
of  fair  market value over the book value of the partnership net assets.  The 
Company's  recorded  share  of TWE operating results before extraordinary item 
was ($3) and $1, and ($14) and ($5) for the three months and nine months ended 
September 30, 1995 and 1994, respectively.  In addition, TWE recorded an 
extraordinary loss for the early extinguishment of debt in third quarter 1995. 
The  Media Group's portion of this extraordinary loss was $4, net of an income 
tax benefit of $2. 
 
<PAGE> 
 
Form 10-Q - Part I 
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued 
                            (Dollars in millions) 
                                 (Unaudited) 
 
D.   Company-Obligated Mandatorily Redeemable Preferred Securities of 
Subsidiary Trust Holding Solely Company Guaranteed Debentures 
 
On  September 11, 1995, U S WEST Financing I, a wholly-owned subsidiary of U S 
WEST  ("U S WEST Financing"), issued $600 of 7.96 % Trust Originated Preferred 
Securities  (the  "Preferred  Securities")  and $19 of common securities.  U S 
WEST  holds all of the outstanding common securities of U S WEST Financing.  U 
S  WEST  Financing  used  the proceeds from such issuance to purchase from U S 
WEST  Capital  Funding,  Inc., a wholly-owned subsidiary of U S WEST ("Capital 
Funding"), $619 principal amount of Capital Funding's 7.96% Subordinated 
Deferrable  Interest  Notes due 2025 (the "Subordinated Debt Securities"), the 
obligations  under  which  are guaranteed by U S WEST.  The sole assets of U S 
WEST Financing are and will be the Subordinated Debt Securities.  In addition, 
U S WEST has guaranteed the payment of interest and redemption amounts to 
holders  of  Preferred  Securities when U S WEST Financing has funds available 
for  such  payments as well as Capital Funding's undertaking to pay all of U S 
WEST Financing's costs, expenses and other obligations. The interest and other 
payment dates on the Subordinated Debt Securities correspond to the 
distribution and other payment dates on the Preferred Securities.  Under 
certain  circumstances, the Subordinated Debt Securities may be distributed to 
the  holders of Preferred Securities and common securities in liquidation of U 
S WEST Financing.  The Subordinated Debt Securities are redeemable in whole or 
in  part  by  Capital Funding at any time on or after September 11, 2000, at a 
redemption  price  of  $25.00  per Subordinated Debt Security plus accrued and 
unpaid interest.  If Capital Funding redeems the Subordinated Debt Securities, 
U S WEST Financing is required to redeem the Preferred Securities concurrently 
at  $25.00  per  share plus accrued and unpaid distributions.  As of September 
30, 1995, 24,000,000 Preferred Securities were outstanding. 
 
 E.     Debt 
 
During third quarter 1995, U S WEST Communications refinanced $410 of 
commercial  paper to take advantage of favorable long-term interest rates.  In 
addition  to  the  commercial paper, U S WEST Communications refinanced $90 of 
long-term  debt.  Expenses  associated  with the refinancing of long-term debt 
resulted  in  an extraordinary charge to income of $5, net of a tax benefit of 
$3. 
 
Subsequent to third quarter 1995, U S WEST refinanced $1.3 billion of 
commercial paper, including $750 at U S WEST Communications. 
 
 
<PAGE> 
 
 Form 10-Q - Part I 
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued 
                            (Dollars in millions) 
                                 (Unaudited) 
 
F.  AirTouch Joint Venture 
 
Effective November 1, 1995, AirTouch and the Company have entered into Phase I 
of their joint venture.  In accordance with the closing agreement, during 
Phase I the Media Group Combined Financial Statements will continue to reflect 
the  Company's  existing  ownership  of the domestic cellular operations.  The 
newly  formed Wireless Management Company will provide centralized services to 
both  companies  on  a  contract basis.  In Phase II, AirTouch and the Company 
will  contribute  their domestic cellular assets to the newly formed venture.  
This  phase  will  occur  within four years, upon obtaining interim regulatory 
relief, or earlier, at AirTouch's option. 
 
 G.     Contingencies 
 
At U S WEST Communications there are pending regulatory actions in local 
regulatory  jurisdictions  that call for price decreases, refunds or both.  In 
one  such  instance, the Utah Supreme Court has remanded a Utah Public Service 
Commission  ("PSC") order to the PSC for reconsideration, thereby establishing 
two  exceptions to the rule against retroactive ratemaking:  1) unforeseen and 
extraordinary  events,  and  2)  misconduct.  The PSC's initial order denied a 
refund  request  from  interexchange carriers and other parties related to the 
Tax  Reform Act of 1986.  This action is still in the discovery process.  If a 
formal  filing  -  made in accordance with the remand from the Supreme Court - 
alleges  that  the  exceptions  apply, the range of possible risk to  U S WEST 
Communications is $0 to $140. 
 
On  September 22, 1995, the Company filed a lawsuit in Delaware Chancery Court 
to  prevent  the  proposed merger of Time Warner and Turner Broadcasting.  The 
Time  Warner  Entertainment partnership is, among other things, in competition 
with Turner Broadcasting, and the Company believes that ownership of Turner by 
Time  Warner  would constitute breach of contract and fiduciary duties by Time 
Warner.    Time  Warner filed a countersuit against the Company on October 11, 
1995,  alleging  misrepresentation, breach of contract and other misconduct on 
the part of the Company.  Time Warner's countersuit seeks a reformation of the 
Time  Warner  Entertainment  partnership  agreement, an order that enjoins U S 
WEST  from  breaching  the partnership agreement, and unspecified compensatory 
damages.  U S WEST has denied each of the claims in Time Warner's countersuit. 
 A trial date of March 16,1996 has been set. 
 
 
<PAGE> 
 
 Form 10-Q - Part I 
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued 
                            (Dollars in millions) 
                                 (Unaudited) 
 
H.    Investment in International Ventures 
 
The Company's investments in international ventures increased $480 from 
December 31, 1994.  The increase primarily consists of a 20 percent investment 
in Malaysia to provide local wireline and wireless communications, the 
acquisition of a 50 percent interest in cable television systems in the 
Netherlands  and  the acquisition of a 29 percent interest in cable television 
systems in the Czech Republic. 
 
On  October  2,  1995, TeleWest Communications' acquisition and share exchange 
with  SBC CableComms (UK) became effective.  U S WEST and Tele-Communications, 
Inc., the major shareholders, each will own 26.7 percent of the combined 
company.  In fourth quarter 1995, the Company will recognize an after tax gain 
of approximately $100 in conjunction with the merger. 
 
I.    Net Investment in Assets Held for Sale 
 
Effective  January  1, 1995, the capital assets segment has been accounted for 
in  accordance with Staff Accounting Bulletin No. 93, issued by the Securities 
Exchange  Commission,  which  requires discontinued operations not disposed of 
within  one  year of the measurement date to be accounted for prospectively in 
continuing  operations  as  "net investment in assets held for sale."  The net 
realizable  value  of  the assets will be reevaluated on an ongoing basis with 
adjustments to the existing reserve, if any, being charged to continuing 
operations.    Prior to January 1, 1995, the entire capital assets segment was 
accounted for as discontinued operations in accordance with Accounting 
Principles Board Opinion No. 30. 
 
Sales  and  other  revenues of net investment in assets held for sale were $30 
and $64, and $137 and $443 for the three months and nine months ended 
September 30, 1995 and 1994, respectively.  Included are the sale of 
properties  for approximately $52 and $253 for the nine months ended September 
30, 1995 and 1994, respectively.  The sales were in line with Company 
estimates. 
 
 
<PAGE> 
 
Form 10-Q - Part I 
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, continued 
                            (Dollars in millions) 
                                 (Unaudited) 
<TABLE> 
 
<CAPTION> 
 
The components of net investment in assets held for sale follow: 
 
 
<S>                                                     <C>             <C> 
 
                                                        September 30,   December 31, 
Dollars in millions                                               1995           1994 
ASSETS 
Cash                                                    $           16  $           7 
Finance receivables - net                                        1,005          1,073 
Investment in real estate - net of valuation allowance             420            465 
Bonds, at market value                                             165            155 
Investment in FSA                                                  374            329 
Other assets                                                       198            362 
Total assets                                                     2,178          2,391 
LIABILITIES 
Debt                                                               922          1,283 
Deferred income taxes                                              700            693 
Accounts payable, accrued liabilities and other                    128            103 
Minority interests                                                  10             10 
Total liabilities                                                1,760          2,089 
Net investment in assets held for sale                  $          418  $         302 
</TABLE> 
 
 
 
<TABLE> 
 
<CAPTION> 
 
Selected financial data for U S WEST Financial Services follows: 
 
 
<S>                  <C>        <C>         <C>         <C> 
 
                      3 Months    3 Months    9 Months    9 Months 
                     Ended      Ended       Ended       Ended 
                     Sept. 30   Sept. 30,   Sept. 30,   Sept. 30, 
Dollars in millions       1995        1994        1995        1994 
Operating revenues   $       9  $       15  $       30  $       45 
 
</TABLE> 
 
 
 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                      <C>             <C> 
 
                         September 30,   December 31, 
Dollars in millions                1995           1994 
Net finance receivables  $          911  $         981 
Total assets                      1,223          1,331 
Total debt                          419            533 
Total liabilities                 1,153          1,282 
Shareowner's equity                  70             49 
 
</TABLE> 
 
 
 
<PAGE> 
 
Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions, except per share amounts) 
 
Results of Operations 
 
Comparative  details  of  income  before extraordinary item for three and nine 
months ended September 30 follow: 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                                                  <C>          <C>          <C>       <C>          <C>          <C> 
 
                                                         3 Mos.       3 Mos.                 9 Mos.       9 Mos.  
                                                     Ended        Ended                  Ended        Ended 
                                                     Sept. 30,    Sept. 30,    Percent   Sept. 30,    Sept. 30,    Percent 
Dollars in millions                                        1995         1994   Change          1995         1994   Change 
Communications Group                                 $      292   $      267       9.4   $      900   $      851       5.8  
Media Group: 
  Consolidated: 
    Multimedia content and services                          63           63         -          179          190      (5.8) 
    Wireless communications                                  24           11         -           56           62      (9.7) 
    Cable and telecommunications                             (1)           -         -           (7)           -         -  
  Unconsolidated equity investments: 
    Time Warner Entertainment Company, L.P.                  (3)          (2)    (50.0)         (16)         (13)    
(23.1) 
    TeleWest Communications plc                             (11)         (10)    (10.0)         (23)         (24)      4.2  
    Mercury One-2-One                                       (18)         (16)    (12.5)         (57)         (40)    (42.5) 
  Other                                                     (21)           5         -          (59)          (9)        -  
     Total Media Group                                       33           51     (35.3)          73          166     (56.0) 
Income before extraordinary item                     $      325   $      318       2.2   $      973   $    1,017      
(4.3) 
Earnings per common share before extraordinary item 
                                                     $     0.69   $     0.70      (1.4)  $     2.06   $     2.25      (8.4) 
 
</TABLE> 
 
 
Results of Operations - Third Quarter 
 
U  S  WEST's  third  quarter 1995 income before extraordinary item was $314, a 
decrease  of  $4, or 1.3 percent, over third quarter 1994, excluding a gain of 
$21  on  the  sale of rural telephone exchanges and expenses of $10 associated 
with the Recapitalization Plan, all in third quarter 1995. 
 
Third  quarter  1995  earnings per common share before extraordinary item were 
$0.67  compared  with  $0.70 in 1994, excluding the effects of the gain on the 
sale  of  rural  telephone exchanges ($0.04 per share) and expenses associated 
with  the  Recapitalization Plan ($0.02 per share).  Earnings per common share 
reflect  approximately  16  million  additional average shares outstanding, of 
which  12.8  million  were  issued in connection with the acquisition of cable 
systems in the Atlanta, Georgia metropolitan area (the "Atlanta Systems"). 
 
<PAGE> 
 
Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions, except per share amounts), 
continued 
 
The  Communications Group's third quarter income before extraordinary item was 
$276,  an  increase  of  $9, or 3.4 percent, compared with third quarter 1994, 
excluding  the  gain  on  sale of rural telephone exchanges and expenses of $5 
associated with the Recapitalization Plan. Increased income at the 
Communications  Group  is  attributable  to higher demand for services, access 
line growth and lower employee benefit costs, including the effects of certain 
benefit  cost  true-ups.   Partially offsetting these items was an increase in 
operating costs incurred to address current customer service issues, increased 
depreciation expense, and higher interest expense. 
 
The  Media  Group's  third quarter income before extraordinary item was $38, a 
decrease  of  $13,  or 25 percent, compared with third quarter 1994, excluding 
expenses of $5 associated with the Recapitalization Plan.  The decline is 
primarily due to increased interest expense associated with the acquisition of 
the  Atlanta Systems and the expansion of international investments, partially 
offset by improvement in the wireless communications business.  The 
amortization  of goodwill associated with the Atlanta Systems acquisition also 
caused  a  significant increase in the effective tax rate which contributed to 
lower earnings. 
 
Results of Operations - Nine Months 
 
For the nine months ended September 30, 1995, income before extraordinary item 
was  $913,  a decrease of $32, or 3.4 percent, excluding gains on the sales of 
rural  telephone  exchanges of $70 ($0.14 per share) and $31 ($0.07 per share) 
in  1995  and 1994, respectively, expenses of $10 ($0.02 per share) associated 
with  the  Recapitalization  Plan in 1995, and a gain of $41 ($0.09 per share) 
for  the sale of paging operations in 1994.  Earnings per share were $1.94 for 
the nine months ended September 30, 1995, as compared with $2.09 in 1994, 
excluding the one-time items. 
 
The Communications Group's income before extraordinary item was $835, an 
increase of $15, or 1.8 percent, as compared with the nine months ended 
September 30, 1994, excluding the gains on the sales of rural telephone 
exchanges  and  expenses associated with the Recapitalization Plan.  The Media 
Group's  income before extraordinary item during the first nine months of 1995 
was  $78,  a  decrease of $47, or 38 percent, as compared with the same period 
1994, excluding the expenses associated with the Recapitalization Plan in 1995 
and the 1994 gain on the sale of paging operations. 
 
 
<PAGE> 
 
 Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions, except per share amounts), 
continued 
 
Earnings Before Interest, Taxes, Depreciation, Amortization and Other 
("EBITDA") 
 
Increased demand for the Communications Group's services resulted in growth in 
EBITDA of 5.8 and 4.8 percent for third quarter and nine months ended 
September 30, 1995, respectively, as compared with the same periods in 1994. 
 
The  Media  Group's EBITDA increased by approximately 30 percent, to $207, for 
third quarter 1995, primarily due to improvement in the wireless 
communications business and acquisition of the Atlanta Systems.  Excluding the 
effects  of the acquisition, EBITDA increased by approximately 14 percent. For 
the nine months ended September 30, 1995, EBITDA increased by approximately 29 
percent,  to $552, primarily due to improvement in the wireless communications 
business and acquisition of the Atlanta Systems.  Excluding the effects of the 
acquisition and the paging sale, EBITDA increased by approximately 15 percent. 
 
The Company believes EBITDA is an important indicator of the operational 
strength  of  its businesses.  EBITDA, however, should not be considered as an 
alternative to operating or net income as an indicator of performance or as an 
alternative to cash flows from operating activities as a measure of liquidity, 
in each case determined in accordance with GAAP. 
 
Sales and Other Revenues 
<TABLE> 
 
<CAPTION> 
 
An analysis of the change in U S WEST's consolidated sales and other revenues follows: 
 
 
<S>                      <C>          <C>          <C>       <C>          <C>          <C> 
 
                             3 Mos.       3 Mos.                 9 Mos.       9 Mos.  
                         Ended        Ended                  Ended        Ended 
                         Sept. 30,    Sept. 30,    Percent   Sept. 30,    Sept. 30,    Percent 
Dollars in millions            1995         1994   Change          1995         1994   Change 
Communications Group     $    2,389   $    2,316       3.2   $    7,045   $    6,850       2.8  
Media Group                     604          482      25.3        1,725        1,359      26.9  
Intergroup eliminations         (29)         (33)    (12.1)         (84)         (95)    (11.6) 
    Total                $    2,964   $    2,765       7.2   $    8,686   $    8,114       7.0  
 
</TABLE> 
 
 
 
<PAGE> 
 
Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions, except per share amounts), 
continued 
 
Communications Group Revenue 
<TABLE> 
 
An analysis of changes in the Communications Group's revenues follows: 
<CAPTION> 
 
 
 
<S>                    <C>     <C>     <C>        <C>       <C>       <C>      <C>          <C> 
 
                                                  Lower                        Increase     Increase 
                                       Price      (Higher)                      (Decrease)   (Decrease) 
Dollars in millions      1995    1994  Changes    Refunds   Demand    Other    Dollars      Percentage 
Local service 
   Third quarter       $1,105  $1,034  $      5       ($7)  $    73   $    -   $       71          6.9  
   Nine months          3,231   3,035         9        (7)      194        -          196          6.5  
Interstate access 
   Third quarter          594     573        (9)       (5)       36       (1)          21          3.7  
   Nine months          1,774   1,691       (27)      (15)      126       (1)          83          4.9  
Intrastate access 
   Third quarter          186     188       (12)        4         6        -           (2)        (1.1) 
   Nine months            558     541       (24)        7        26        8           17          3.1  
Long-distance network 
   Third quarter          298     323        (5)        -       (14)      (6)         (25)        (7.7) 
   Nine months            891   1,019       (20)        -       (42)     (66)        (128)       (12.6) 
Other services 
   Third quarter          206     198                                      8            8          4.0  
   Nine months            591     564                                     27           27          4.8  
Total 
   Third quarter        2,389   2,316       (21)       (8)      101        1           73          3.2  
   Nine months         $7,045  $6,850      ($62)     ($15)  $   304     ($32)  $      195          2.8  
</TABLE> 
 
 
Local  service revenues increased principally as a result of higher demand for 
services, as evidenced by an increase of 495,000 access lines, or 3.5 percent, 
during the last 12 months.  Access line growth was 4.2 percent as adjusted for 
sales of approximately 103,000 rural telephone access lines during the last 12 
months. 
 
Higher  revenues  from  interstate  access services resulted from increases of 
10.0  and 9.4 percent in interstate billed access minutes of use for the three 
and  nine  months ended September 30, 1995, respectively, as compared with the 
same  periods  in 1994.  The increased volume of business more than offset the 
effects of price reductions and refunds. 
 
Intrastate  access revenues decreased for the three months ended September 30, 
1995,  compared  with the same period in 1994, primarily due to the effects of 
price reductions, partially offset by higher demand.  Intrastate access 
revenues increased for the nine months ended September 30, 1995, compared with 
1994, primarily due to the impacts of multiple toll carrier plans. 
 
 
<PAGE> 
 
 Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions, except per share amounts), 
continued 
 
Multiple  toll  carrier plans ("MTCP") implemented in Oregon and Washington in 
May  and July 1994, respectively, allow independent telephone companies to act 
as toll carriers.  The impact on Communications Group for the nine months 
ended  September  30, 1995, was long-distance revenue losses of $62, partially 
offset by increases in intrastate access revenue of $12 and decreases in other 
operating expenses (i.e. access expense) of $42. These regulatory arrangements 
did not impact third quarter results. 
 
Long-distance network revenues decreased by 7.7 and 12.6 percent for the three 
months  and  nine months ended September 30, 1995, respectively, compared with 
the same periods in 1994, primarily due to the effects of competition and 
price  reductions.    Adjusted  for the effects of MTCP, long-distance network 
revenues decreased by 6.5 percent for the nine months ended September 30, 
1995, as compared with the same period last year. 
 
Revenues from other services increased primarily as a result of continued 
market penetration in voice messaging services, increases in inside wire 
services,  sales of customer premise equipment and wire installation projects, 
partially offset by decreases in billing and collection revenues. 
 
Media Group Revenue 
<TABLE> 
 
An analysis of the Media Group's revenues follows: 
<CAPTION> 
 
 
 
<S>                              <C>        <C>         <C>      <C>        <C>        <C> 
 
                                    3 Mos.      3 Mos.              9 Mos.     9 Mos. 
                                 Ended      Ended                Ended      Ended 
                                 Sept 30,   Sept. 30,   Percent  Sept 30,   Sept 30,   Percent 
Dollars in millions                   1995        1994  Change        1995       1994  Change 
Multimedia content and services  $     292  $      277      5.4  $     856  $     774     10.6 
Wireless communications                246         198     24.2        676        563     20.1 
Cable and telecommunications            56           -        -        165          -        - 
  Other                                 10           7     42.9         28         22     27.3 
     Total Media Group           $     604  $      482     25.3  $   1,725  $   1,359     26.9 
</TABLE> 
 
 
Multimedia  Content  and Services.  Revenues related to Yellow Pages directory 
advertising increased approximately $17, or 7.3 percent, and $50, or 7.1 
percent, in third quarter and the nine months ended September 30, 1995, 
respectively,  as compared with 1994, due to pricing and an increase in Yellow 
Pages  advertising  volume.    Product enhancements and the effect of improved 
marketing programs on business volume also contributed to the increase in 
revenues.   Excluding the sale of certain non-strategic operations, non-Yellow 
Pages  revenues  increased  by  $4 and $8 in third quarter and the nine months 
ended September 30, 1995, respectively, as compared with 1994. 
 
International  directory  publishing  revenue decreased by $3 in third quarter 
1995 as compared with 1994, primarily due to a delay in publication of certain 
directories.   Revenue for the nine months ended September 30, 1995, increased 
by $30 compared with 1994 due to the May 1994 purchase of Thomson Directories. 
 
<PAGE> 
 
Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions, except per share amounts), 
continued 
 
Wireless  Communications.  Cellular service revenues increased by $55, or 32.7 
percent, and $162, or 35.7 percent, in third quarter and the nine months ended 
September  30, 1995, respectively, as compared with 1994. This increase is due 
to a 55 percent increase in subscribers during the last twelve months, 
partially  offset  by  a  13 percent drop in average revenue per subscriber to 
$62.00  per  month  for  the nine months ended September 30, 1995, as compared 
with  1994.    The increase in subscribers relates to lower costs for cellular 
phone equipment and enhanced service offerings, which has resulted in 
additional penetration into the consumer user market.  The decrease in average 
revenue  per  subscriber  is due to continuing competitive pressures and price 
sensitivity of non-business users. 
 
Cellular equipment revenues decreased by $7, or 23.3 percent, and $21, or 25.9 
percent, in third quarter and the nine months ended September 30, 1995, 
respectively, as compared with 1994.  This decrease is primarily due to a 
decrease in unit sales and price per unit due to the impacts of competition. 
 
Paging revenues for the nine months ended September 30, 1995, decreased $28 as 
compared with 1994 due to the sale of the paging assets in 1994. 
 
Cable  and Telecommunications.  Domestic cable and telecommunications revenues 
reflect the December 1994 acquisition of the Atlanta Systems. 
<TABLE> 
 
Costs and Expenses 
<CAPTION> 
 
 
 
<S>                                       <C>         <C>          <C>       <C>          <C>         <C> 
 
                                             3 Mos.       3 Mos.                 9 Mos.       9 Mos. 
                                          Ended       Ended                  Ended        Ended 
                                          Sept. 30    Sept. 30,    Percent   Sept. 30,    Sept. 30,   Percent 
Dollars in millions                           1995,         1994   Change          1995         1994  Change 
Employee-related expenses                 $   1,007   $      968       4.0   $    2,982   $    2,822      5.7 
Other operating expenses                        592          532      11.3        1,661        1,527      8.8 
Taxes other than income taxes                   103          109      (5.5)         330          322      2.5 
Depreciation and amortization                   573          509      12.6        1,695        1,519     11.6 
Interest expense                                137          104      31.7          404          323     25.1 
Equity losses in unconsolidated ventures         38           26      46.2          128           83     54.2 
Other income (expense) - net                     (8)          (3)        -           (6)          11        - 
</TABLE> 
 
 
 
<PAGE> 
 
 Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions, except per share amounts), 
continued 
 
Communications  Group  employee-related  expense  increased $7 and $68 for the 
three  and  nine  months ended September 30, 1995, respectively, compared with 
the same periods in 1994.  Higher employee-related expenses at the 
Communications Group are primarily the result of initiatives to improve 
customer service and address business growth.  Customer service has been 
impacted  by temporary declines in productivity partly caused by restructuring 
efforts.    Higher  levels  of employee-related expenses at the Communications 
Group  are  expected  to continue through the remainder of the year.  Overtime 
payments and contract labor increased employee-related expenses at the 
Communications  Group  by approximately $54 and $149 for third quarter and the 
first  nine months of 1995, respectively, as compared with the same periods in 
1994.  Partially offsetting these increases was a reduction in the accrual for 
postretirement  benefits,  certain benefit cost true-ups, and lower travel and 
conference expenses. 
 
Since  December  1993,  the Communications Group has separated 4,299 employees 
under the Restructuring Plan.  (See "Restructuring Charges.")  These 
separations  have been partially offset by the addition of approximately 2,600 
employees  (a  significant portion of which are temporary) primarily dedicated 
to improving customer service and developing new business opportunities.  
Benefits from the net work-force reductions at Communications Group have 
offset wage and salary increases. 
 
The  Company  estimates  that  it will achieve employee reductions of 9,000 in 
connection with the Restructuring Plan by the end of 1997.  (See 
"Restructuring  Charges.")  These employee reductions will be partially offset 
by  the  planned addition of some employees at the Communications Group by the 
end  of 1997 to accommodate business growth, including wireless cable and data 
transmission services. 
 
Employee-related expenses also increased due to the 1994 purchases of the 
Atlanta Systems and Thomson Directories, and growth initiatives in the 
multimedia content and services segment. 
 
The  1994  purchases  of the Atlanta Systems and Thomson Directories increased 
other operating expenses by $24 and $98 for third quarter and nine months 
ended 1995, respectively, as compared with the same periods in 1994.  
Additionally, expansion of the cellular customer base increased other 
operating expenses by $15 and $39 for third quarter and nine months ended 
1995, respectively, as compared with the same periods in 1994. 
 
Other  operating  expenses  at  Communications Group increased by $15 in third 
quarter 1995 compared with third quarter 1994.  The increase is due to several 
items, including costs associated with the sales of customer premise equipment 
and wire installation projects.  For the nine months ended September 30, 1995, 
other  operating expenses decreased by $24, primarily due to the effect of the 
multiple toll carrier plans. 
 
Increased depreciation and amortization expense was attributable to the 
effects of a higher depreciable asset base at the Communications Group and the 
purchase of the Atlanta Systems. 
 
<PAGE> 
 
Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions, except per share amounts), 
continued 
 
Equity losses increased by $12 and $45 in third quarter 1995 and the nine 
months  ended  September  30,  1995, respectively, as compared with 1994.  The 
increases were primarily due to costs related to the expansion of the customer 
base at Mercury One-2-One ("One 2 One") in the nine months ended September 30, 
1995, as compared with 1994. 
 
Interest expense increased primarily as a result of increased debt at the 
Communications  Group, the purchase of the Atlanta Systems, partially financed 
through  the  issuance of short-term debt, new international investments and a 
reclassification of debt from net investment in assets held for sale. 
 
 Liquidity and Capital Resources 
 
Operating Activities 
 
Cash  provided  by  operations  decreased by $108 compared with the first nine 
months  of 1994.  Business growth was more than offset by the combined effects 
of  an  increase of $73 in postretirement benefit funding, an increase of $101 
in  Restructuring  Plan expenditures and higher income tax payments, including 
approximately  $60  related to the partial sale of the Company's joint venture 
interest in TeleWest. 
 
Investing Activities 
 
Investments in international ventures were $576 in the nine months ended 
September  30,  1995,  as  compared with $214 in 1994.  Significant 1995 Media 
Group  investing  activities include equity investments in Malaysia to provide 
local wireline and wireless communications, the acquisition of cable 
television systems in the Netherlands and Czech Republic and additional 
capital contributions to One 2 One in the U.K. 
 
In  March  1995, PCS PrimeCo, L.P. ("PCS PrimeCo") was awarded PCS licenses in 
11 markets.  The Company's share of the cost of the licenses was approximately 
$268, all of which was funded by June 30, 1995.  Under the PCS PrimeCo 
partnership agreement, the Company is required to fund 25 percent of PCS 
PrimeCo's operating and capital costs, including licensing costs.  The Company 
anticipates  that its total funding obligations to PCS PrimeCo during the next 
four years will be significant. 
 
Cash  provided  to  the net investment in assets held for sale of $108 for the 
nine months ended September 30, 1995, primarily reflects the payment of debt. 
 
<PAGE> 
 
Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions, except per share amounts), 
continued 
 
At September 30, 1995, the Company guaranteed debt associated with its 
international investments in the principal amount of approximately $165. 
 
In the first nine months of 1995, U S WEST received cash proceeds of $162 from 
the sale of certain rural telephone exchanges as compared with proceeds of $51 
in the same period last year. 
 
Financing Activities 
 
During  the first nine months of 1995, debt increased by $846.  Communications 
Group debt increased by $714, primarily related to increased expenditures 
(including capital related to service quality issues and implementation of the 
Restructuring Plan) and cash fundings for postretirement medical and life 
costs. 
 
Media  Group debt increased by $132 due to new international investments, cash 
funding of the PCS licenses and a reclassification of debt from net investment 
in assets held for sale.  These increases were largely offset by reductions of 
debt related to the investment in TWE and the reduction of commercial paper by 
issuing  Preferred  Securities.    The Company issued $600 of Trust Originated 
Preferred  Securities (the "Preferred Securities") in third quarter 1995.  U S 
WEST has fully and unconditionally guaranteed the payment of interest and 
redemption  amounts  to  holders  of  the Preferred Securities.  The Preferred 
Securities  are  redeemable  in whole or in part by U S WEST at any time on or 
after September 11, 2000, at a redemption price of $25.00 per Preferred 
Security. As of September 30, 1995, 24,000,000 Preferred Securities were 
outstanding. 
 
Excluding debt included in net investment in assets held for sale, the 
percentage  of  debt  to total capital at September 30, 1995, was 51.1 percent 
compared  with  51.8  percent at December 31, 1994.  Including debt related to 
net investment in assets held for sale, the percentage of debt to total 
capital  was  53.6  and  55.5 percent at September 30, 1995, and December  31, 
1994,  respectively.  The percentage of debt to total capital has decreased at 
September 30, 1995 as compared with December 31, 1994 primarily as a result of 
issuing  the  Preferred Securities, which are included as a component of total 
capital. 
 
During  the  first quarter of 1995, U S WEST purchased 1,704,700 shares of U S 
WEST Common Stock for $63, at an average price of $37.02 per share. 
 
The  Company from time to time engages in discussions regarding acquisitions.  
The  Company  may fund such acquisitions with internally generated funds, debt 
or  equity.    The incurrence of indebtedness to fund such acquisitions and/or 
the assumption of indebtedness in connection with acquisitions, if 
significant, could result in a downgrading of the credit rating of the Company 
and/or U S WEST Communications. 
 
<PAGE> 
 
Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions, except per share amounts), 
continued 
 
 Restructuring 
 
The Company's 1993 results reflected a $1 billion restructuring charge 
(pretax).  The related restructuring plan (the "Restructuring Plan") is 
designed  to  provide faster, more responsive customer services while reducing 
the costs of providing these services.  As part of the Restructuring Plan, the 
Company  is developing new systems and enhanced system functionality that will 
enable  it  to  monitor  networks to reduce the risk of service interruptions, 
activate telephone service on demand, rapidly design and engineer new services 
for customers and centralize its service centers.  The Company is 
consolidating  its  560  customer service centers into 26 centers in 10 cities 
and reducing its total work force by approximately 9,000 employees. 
 
The Restructuring Plan is scheduled to be completed by the end of 1997.  
Implementation  to  date has been driven by growth in the business and related 
service issues, revisions to system delivery schedules and productivity issues 
caused  by  the  major rearrangement of resources due to restructuring.  These 
issues may continue to affect the timing of the implementation of the 
Restructuring Plan. 
<TABLE> 
 
<CAPTION> 
 
Following is a schedule of the costs included in the Restructuring Plan: 
 
 
<S>                            <C>      <C>      <C>        <C>        <C>        <C> 
 
                               Actual   Actual   Estimate   Estimate   Estimate 
Dollars in millions               1993     1994       1995       1996       1997  Total 
Cash expenditures: 
  Employee separation (1)      $     -  $    19  $      76  $      99  $      66  $  260 
  Systems development                -      127        161        112          -     400 
  Real estate                        -       50         71          9          -     130 
  Relocation                         -       21         23         31          5      80 
  Retraining and other               -       16         27         15          7      65 
Total cash expenditures              -      233        358        266         78     935 
Asset write-down                    65        -          -          -          -      65 
Total Plan                          65      233        358        266         78   1,000 
Remaining 1991 plan employee 
      costs (1)                      -       56          -          -          -      56 
Total                          $    65  $   289  $     358  $     266  $      78  $1,056 
 
<FN> 
 
(1) Employee separation costs, including the balance of the 1991 restructuring reserve 
at December 31, 1993, aggregate $316. 
</FN> 
</TABLE> 
 
 
 
<PAGE> 
 
Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions, except per share amounts), 
continued 
 
Employee separation costs include severance payments, health-care coverage and 
postemployment education benefits.  System development costs include new 
systems and the application of enhanced system functionality to existing 
single  purpose systems to provide integrated, end-to-end customer service.  A 
substantial portion of the work-force reductions will be enabled by developing 
new systems and enhanced system functionality, which will simplify the 
current,  labor-intensive  interfaces between existing processes.  Real estate 
costs  include  preparation costs for the new service centers.  The relocation 
and retraining costs are related to moving employees to the new service 
centers  and  retraining  employees on the methods and systems required in the 
new, restructured mode of operation. 
 
The  Company estimates that full implementation of the Restructuring Plan will 
reduce employee-related expenses by approximately $400 per year.  These 
savings are expected to be offset by the effects of inflation.  Future 
operating costs also will be impacted by business growth. 
 
Employee Separation.  Net employee reductions will total 9,000 under the 
Restructuring Plan.  While the Company will separate 10,000 employees, 
approximately  1,000  employees that were originally expected to relocate have 
chosen separation or other job assignments and will be replaced.  The 
estimated  total  cost for employee separations is $316, compared with $286 in 
the original estimate.  The $30 cost associated with these additional employee 
separations  has been reclassified from relocation to the reserve for employee 
separations. 
 
The following estimates of employee separations and related amounts reflect 
the extension of employee reductions into 1997: 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                   <C>       <C>         <C>       <C>       <C>       <C> 
 
                      Estimate  Actual      Estimate  Estimate  Estimate 
Employee separations      1994  (1994) (1)      1995      1996      1997  Total 
  Managerial             1,061        497        612     1,090       521   2,720 
  Occupational           1,887      1,683      1,638     2,310     1,649   7,280 
  Total                  2,948      2,180      2,250     3,400     2,170  10,000 
 
</TABLE> 
 
 
 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                          <C>        <C>          <C>        <C>        <C>        <C> 
 
                             Estimate   Actual       Estimate   Estimate   Estimate 
Employee separation amounts       1994   (1994) (1)       1995       1996       1997  Total 
  Managerial                 $      25  $        5   $      22  $      43  $      20  $   90 
  Occupational                      15          14          54         56         46     170 
  Total                             40          19          76         99         66     260 
  Remaining 1991 reserve            56          56           -          -          -      56 
   Total                     $      96  $       75   $      76  $      99  $      66  $  316 
 
<FN> 
 
 (1)   Includes the remaining employees and the separation amounts associated with the 
balance of the 1991 restructuring reserve at 
        December 31, 1993. 
</FN> 
</TABLE> 
 
 
  
<PAGE> 
 
Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions, except per share amounts), 
continued 
 
Compared with the original estimates, employee reduction and separation 
amounts shown above have been reduced by 1,219 employees and $27, 
respectively,  in  1995,  and  increased by 800 employees and $12 in 1996, and 
2,170 employees and $66 in 1997, respectively. 
 
Systems Development.  U S WEST Communications' existing information management 
systems were largely developed to support a monopoly environment.  These 
systems  have  become  increasingly inadequate due to the effects of increased 
competition,  new forms of regulation and changing technology that have driven 
consumer  demand  for new services that can be delivered quickly, reliably and 
economically.   The Company believes that improved customer service, delivered 
at lower cost, can be achieved by a combination of new systems and introducing 
new  functionality  to  existing systems.  This is a change from the Company's 
initial strategy which placed more emphasis on the development of new systems. 
The  Restructuring  Plan is now less dependent on development of entirely new, 
untested systems and related technology. 
 
The systems development program involves new systems and enhanced system 
functionality for systems that support the following core processes: 
 
Service Delivery - to support service on demand for all products and services. 
           These new systems and enhanced system functionality will permit one 
          customer service representative to handle all facets of a customer's 
        requirements as contrasted to the numerous points of customer 
        interface required today. 
 
Service  Assurance  -  for performance monitoring from one location and remote 
        testing in the new environment, including identification and 
        resolution of faults prior to customer impact. 
 
Capacity  Provisioning  -  for integrated planning of future network capacity, 
        including the installation of software controllable service 
        components. 
 
The  direct,  incremental  and nonrecurring costs of providing new systems and 
enhanced system  functionality follow: 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                    <C>        <C>      <C>        <C>        <C> 
 
                       Estimate   Actual   Estimate   Estimate 
                            1994     1994       1995       1996  Total 
Service delivery       $      35  $    21  $      21  $      31  $   73 
Service assurance             45       12         24         28      64 
Capacity provisioning         17       57         92         30     179 
All other                     28       37         24         23      84 
Total                  $     125  $   127  $     161  $     112  $  400 
 
</TABLE> 
 
 
 
<PAGE> 
 
Form 10-Q - Part I 
 
  Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions, except per share amounts), 
continued 
 
The  Company  continues  to review its estimates of systems expenditures under 
the Restructuring Plan.  Management does not anticipate any material revisions 
in total estimated expenditures.  However, should expenditures exceed the 
remaining reserve, additional amounts would be expensed as incurred. 
 
Systems expenses charged to current operations at U S WEST Communications 
consist of costs associated with the information management function, 
including planning, developing, testing and maintaining data bases for general 
purpose computers, in addition to systems costs related to maintenance of 
telephone network applications.  Other systems expenses are for administrative 
(i.e.  general  purpose)  systems which include customer service, order entry, 
billing and collection, accounts payable, payroll, human resources and 
property  records.   Ongoing systems costs comprised approximately six percent 
of total operating expenses at U S WEST Communications in 1994, 1993 and 1992. 
U S WEST Communications expects systems costs charged to current operations as 
a percent of total operating expenses to approximate the current level 
throughout  the  life of the Restructuring Plan.  However, systems costs could 
increase relative to other operating costs as the business becomes more 
technology dependent. 
 
Progress Under the Restructuring Plan: 
 
Following is a reconciliation of restructuring reserve activity since December 
1993. 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                      <C>        <C>        <C>        <C>        <C>            <C> 
 
                                                          First      Change in 
                                                          Nine       Relocation/ 
                         Reserve                          Months     Employee       Reserve 
                         Balance         1994  Reserve         1995  Separation     Balance 
                          12/31/93  Activity    12/31/94  Activity   Estimates       9/30/95 
Employee separations 
  Managerial             $      80  $       5  $      75  $      19  $          7   $     63 
  Occupational                 150         14        136         48            23        111 
Total separations              230         19        211         67            30        174 
Systems Development 
  Service delivery              73         21         52         13                       39 
  Service assurance             64         12         52         16                       36 
  Capacity provisioning        179         57        122         65                       57 
  All other                     84         37         47         17                       30 
 Total systems                 400        127        273        111                      162 
Real estate                    130         50         80         58                       22 
Relocation                     110         21         89         13           (30)        46 
Retraining and other            65         16         49         18                       31 
 Total                         935        233        702        267             -        435 
Remaining 1991 Plan 
    expenditures                56         56          -          -             -          - 
Total                    $     991  $     289  $     702  $     267  $          -   $    435 
</TABLE> 
 
 
 
<PAGE> 
 
 Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions, except per share amounts), 
continued 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                   <C>               <C>               <C> 
 
                                                          Cumulative 
                                                          Separations 
Employee separations  1994 Separations  1995 Separations  At September 30,1995 
  Managerial                       497               581                 1,078 
   Occupational                  1,683             1,538                 3,221 
Total                            2,180             2,119                 4,299 
 
</TABLE> 
 
 
Recapitalization Plan 
 
On October 31, 1995, the shareholders of U S WEST, Inc., a Colorado 
corporation, voted to approve a proposal by the Board of Directors to 
reincorporate from Colorado to Delaware and create two classes of common 
stock,  the  Communications  Stock  and the Media Stock, which are intended to 
reflect separately the performance of the communications and multimedia 
businesses.    For a more complete discussion on the Recapitalization Plan see 
Note A in the Notes to the Consolidated Financial Statements. 
 
 AirTouch Joint Venture 
 
Effective November 1, 1995, AirTouch and the Company have entered into Phase I 
of their joint venture.  In accordance with the closing agreement, during 
Phase I the Media Group Combined Financial Statements will continue to reflect 
the  Company's  existing  ownership  of the domestic cellular operations.  The 
newly  formed Wireless Management Company will provide centralized services to 
both  companies  on  a  contract basis.  In Phase II, AirTouch and the Company 
will  contribute  their domestic cellular assets to the newly formed venture.  
This  phase  will  occur  within four years, upon obtaining interim regulatory 
relief, or earlier, at AirTouch's option. 
 
TeleWest Merger 
 
On  October  2,  1995, TeleWest Communications' acquisition and share exchange 
with  SBC CableComms (UK) became effective.  U S WEST and Tele-Communications, 
Inc., the major shareholders, will each own 26.7 percent of the combined 
company.   In fourth quarter 1995, the Media Group will recognize an after tax 
gain of approximately $100 in conjunction with the merger. 
 
<PAGE> 
 
 Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions, except per share amounts), 
continued 
 
Broadband 
 
In  1993,  U S WEST announced its intention to build an interactive multimedia 
telecommunications  network  (the  "Broadband  Network")  capable of providing 
voice,  data  and  video services to customers within the Communications Group 
Region.   The Company began limited testing of the Broadband Network in Omaha, 
Nebraska  in  December 1994.  A market trial in the Omaha area that will cover 
up to 50,000 homes commenced in August 1995. 
 
In early 1994, U S WEST Communications filed applications with the FCC to 
install  Broadband  Network architecture in Denver; Minneapolis-St. Paul; Salt 
Lake City; Boise; and Portland, Oregon (collectively, the "Broadband 
Applications").    In May 1995, U S WEST Communications withdrew the Broadband 
Applications.    The  Communications Group is evaluating the relative costs of 
alternative video technologies, as well as the near-term feasibility of 
interactive  services.    In  order to satisfy anticipated demand for combined 
video  and  telephony  services  on a cost-effective basis, the Communications 
Group's strategy may include selective investments in wireless cable 
technologies. 
 
Regulatory 
 
On  October 11, 1995, the U.S. Justice Department recommended that U S WEST be 
allowed to offer long-distance telephone service outside its 14-state region.  
The agreement, among U S WEST, the Justice Department and AT&T, must be 
approved by U. S. District Court Judge Harold Greene, who oversees the consent 
decree  that  broke up AT&T in 1984, and barred the Regional Holding Companies 
from a number of businesses, including interLATA long distance. 
 
If approved by Judge Greene, U S WEST will be able to offer long-distance 
service  outside  U  S WEST's local service territory.  Such an approval would 
mean that U S WEST would be the first Regional Holding Company allowed to 
offer interLATA long-distance service outside its region. 
 
Union Contract 
 
On  October 2, 1995, U S WEST union members approved a new three-year contract 
with  the Company.  The contract provides for salary increases of 10.6 percent 
over three years effective January 1 of each year.  The contract also provides 
employees with a lump sum payment of $1,500 in lieu of wage increases 
beginning  in  August  of each year.  This lump sum payment will be recognized 
over  the  life  of  the contract.  The agreement covers 33,000 Communications 
Workers  of  America members who work for U S WEST Communications and U S WEST 
Business Resources. 
 
<PAGE> 
 
 Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions, except per share amounts), 
continued 
 
On October 15, 1995, U S WEST Direct and the CWA reached a tentative agreement 
on their contract, subject to ratification by the CWA membership.  This 
contract  would  provide for salary increases of 10.5 percent over three years 
and provides employees with a lump sum payment of $850. 
 
Contingencies 
 
At U S WEST Communications there are pending regulatory actions in local 
regulatory  jurisdictions  that call for price decreases, refunds or both.  In 
one  such  instance, the Utah Supreme Court has remanded a Utah Public Service 
Commission  ("PSC") order to the PSC for reconsideration, thereby establishing 
two  exceptions to the rule against retroactive ratemaking:  1) unforeseen and 
extraordinary  events,  and  2)  misconduct.  The PSC's initial order denied a 
refund  request  from  interexchange carriers and other parties related to the 
Tax  Reform Act of 1986.  This action is still in the discovery process.  If a 
formal  filing  -  made in accordance with the remand from the Supreme Court - 
alleges  that  the  exceptions  apply, the range of possible risk to  U S WEST 
Communications is $0 to $140. 
 
On  September 22, 1995, the Company filed a lawsuit in Delaware Chancery Court 
to  prevent  the  proposed merger of Time Warner and Turner Broadcasting.  The 
Time  Warner  Entertainment partnership is, among other things, in competition 
with Turner Broadcasting, and the Company believes that ownership of Turner by 
Time  Warner  would constitute breach of contract and fiduciary duties by Time 
Warner.    Time  Warner filed a countersuit against the Company on October 11, 
1995,  alleging  misrepresentation, breach of contract and other misconduct on 
the part of the Company.  Time Warner's countersuit seeks a reformation of the 
Time  Warner  Entertainment  partnership  agreement, an order that enjoins U S 
WEST  from  breaching  the partnership agreement, and unspecified compensatory 
damages.  U S WEST has denied each of the claims in Time Warner's countersuit. 
 A trial date of March 16,1996 has been set. 
 
     57 
 
Form 10-Q - Part I 
 
COMBINED STATEMENTS OF INCOME 
(Unaudited)                                U S WEST COMMUNICATIONS GROUP 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                                                      <C>          <C>         <C>          <C> 
 
                                                             3 Mos.       3 Mos.      9 Mos.       9 Mos. 
                                                         Ended        Ended       Ended        Ended 
Dollars in millions                                      Sept. 30,    Sept. 30,   Sept. 30,    Sept. 30, 
 (except per share amounts)                                    1995         1994        1995         1994 
Operating Revenues: 
   Local service                                         $    1,105   $    1,034  $    3,231   $    3,035 
   Interstate access                                            594          573       1,774        1,691 
   Intrastate access                                            186          188         558          541 
   Long-distance network                                        298          323         891        1,019 
   Other services                                               206          198         591          564 
Total operating revenues                                      2,389        2,316       7,045        6,850 
 
Operating Expenses: 
   Employee-related expenses                                    835          828       2,479        2,411 
   Other operating expenses                                     404          389       1,099        1,123 
   Taxes other than income taxes                                 95          102         306          301 
   Depreciation and amortization                                513          476       1,514        1,420 
Total operating expenses                                      1,847        1,795       5,398        5,255 
 
Income from operations                                          542          521       1,647        1,595 
Interest expense                                                108           94         315          277 
Gains on sales of rural telephone exchanges                      34            -         112           48 
Other expense - net                                              14            5          30           21 
Income before income taxes and 
    extraordinary item                                          454          422       1,414        1,345 
Provision for income taxes                                      162          155         514          494 
Income before extraordinary item                                292          267         900          851 
Extraordinary item: 
  Early extinguishment of debt, net of tax                       (5)           -          (5)           - 
 NET INCOME                                              $      287   $      267  $      895   $      851 
 
Pro form earnings per share: 
  Income before extraordinary item                       $     0.62   $     0.59  $     1.91   $     1.89 
  Extraordinary item                                          (0.01)           -       (0.01) 
Pro forma earnings per share                             $     0.61   $     0.59  $     1.90   $     1.89 
 
PRO FORMA AVERAGE COMMON SHARES OUTSTANDING (thousands) 
                                                            471,229      454,997     470,076      451,037 
 
<FN> 
 
See Notes to Combined Financial Statements. 
</FN> 
</TABLE> 
 
 
 
<PAGE> 
 
Form 10-Q - Part I 
 
COMBINED BALANCE SHEETS 
(Unaudited)                          U S WEST COMMUNICATIONS GROUP 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                                   <C>             <C> 
 
                                      September 30,   December 31, 
Dollars in millions                             1995           1994 
 
ASSETS 
Current assets: 
     Cash and cash equivalents        $           81  $         116 
     Accounts and notes receivable             1,699          1,500 
     Inventories and supplies                    222            166 
     Deferred tax asset                          294            300 
     Other                                        44             56 
Total current assets                           2,340          2,138 
 
Gross property, plant and equipment           30,675         29,578 
 Accumulated depreciation                     17,395         16,537 
 Property, plant and equipment - net          13,280         13,041 
Other assets                                     803            765 
Total assets                          $       16,423  $      15,944 
 
<FN> 
 
See Notes to Combined Financial Statements. 
</FN> 
</TABLE> 
 
 
 
<PAGE> 
 
Form 10-Q - Part I 
 
COMBINED BALANCE SHEETS 
(Unaudited), Continued          U S WEST COMMUNICATIONS GROUP 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                                              <C>             <C> 
 
                                                 September 30,   December 31, 
Dollars in millions                                        1995           1994 
 
LIABILITIES AND EQUITY 
Current liabilities: 
     Short-term debt                             $        2,092  $       1,608 
     Accounts payable                                       785            888 
     Employee compensation                                  350            313 
     Dividends payable                                      252            250 
     Current portion of restructuring charges               342            318 
     Other                                                  879            831 
Total current liabilities                                 4,700          4,208 
 
Long-term debt                                            4,746          4,516 
Postretirement and other postemployment benefit 
    obligations                                           2,287          2,427 
Deferred taxes, credits and other                         1,418          1,614 
Communications Group equity                               3,272          3,179 
Total liabilities and equity                     $       16,423  $      15,944 
 
<FN> 
 
See Notes to Combined Financial Statements. 
</FN> 
</TABLE> 
 
 
 
<PAGE> 
 
 Form 10-Q - Part I 
 
 
COMBINED STATEMENTS OF 
CASH FLOWS (Unaudited)     U S WEST COMMUNICATIONS GROUP 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                                                   <C>       <C> 
 
Dollars in millions 
Nine Months Ended September 30,                          1995      1994  
OPERATING ACTIVITIES 
   Net income                                         $   895   $   851  
   Adjustments to net income: 
      Depreciation and amortization                     1,514     1,420  
      Postretirement medical and life costs, net of 
           cash fundings                                 (156)     (208) 
      Gains on sales of rural telephone exchanges        (112)      (48) 
      Deferred income taxes and amortization 
         of investment tax credits                        121       142  
   Changes in operating assets and liabilities: 
      Restructuring payments                             (254)     (160) 
      Accounts and notes receivable                      (204)     (125) 
      Inventories, supplies and other                     (63)      (61) 
      Accounts payable and accrued liabilities            (33)      (30) 
   Other adjustments - net                                (10)      (20) 
   Cash provided by operating activities                1,698     1,761  
INVESTING ACTIVITIES 
   Expenditures for property, plant and equipment      (1,703)   (1,746) 
   Proceeds from disposals of property, plant 
      and equipment                                       161        49  
    Cash (used for) investing activities               (1,542)   (1,697) 
FINANCING ACTIVITIES 
   Net proceeds from issuance of short-term debt          365       332  
   Proceeds from issuance of long-term debt               499       315  
   Repayments of long-term debt                          (256)     (271) 
   Dividends paid on common stock                        (694)     (663) 
   Proceeds from issuance of common stock                   -       211  
   Equity transfer to Media Group                        (105)        -  
   Cash provided by financing activities                 (191)      (76) 
CASH AND CASH EQUIVALENTS 
   Increase (decrease)                                    (35)      (12) 
   Beginning balance                                      116        56  
   Ending balance                                     $    81   $    44  
 
<FN> 
 
See Notes to Combined Financial Statements 
</FN> 
</TABLE> 
 
 
 
<PAGE> 
 
 Form 10-Q - Part I 
 
                    NOTES TO COMBINED FINANCIAL STATEMENTS 
                            (Dollars in millions) 
                                 (Unaudited) 
 
A.  Recapitalization Plan 
 
On October 31, 1995, the shareholders of U S WEST, Inc., a Colorado 
corporation ("U S WEST Colorado") voted to approve a proposal (the 
"Recapitalization  Plan")  adopted  by the Board of Directors to reincorporate 
from Colorado to Delaware and create two classes of common stock that are 
intended to reflect separately the performance of the communications and 
multimedia businesses.  Under the Recapitalization Plan, shareholders approved 
an  Agreement and Plan of Merger between U S WEST Colorado and U S WEST, Inc., 
a  Delaware corporation (" U S WEST" or "Company"), pursuant to which U S WEST 
continues  as  the  surviving corporation.  In connection with the merger, the 
Certificate  of  Incorporation  of  U S WEST has been amended and restated to, 
among  other  things,  designate  two classes of common stock of U S WEST, one 
class  of  which  is  authorized as U S WEST Communications Group Common Stock 
("Communications  Stock"), and the other class is authorized as U S WEST Media 
Group Common Stock ("Media Stock").  Effective November 1, 1995, each share of 
common stock of U S WEST Colorado was converted into one share of 
Communications Stock and one share of Media Stock. 
 
The  Communications Stock and Media Stock are designed to provide shareholders 
with separate securities that are intended to reflect separately the 
communications businesses of U S WEST Communications, Inc. ("U S WEST 
Communications") and certain other subsidiaries of the Company (the 
"Communications  Group")  and  the Company's multimedia businesses (the "Media 
Group" and, together with the Communications Group, the "Groups"). 
 
The  Communications  Group  is  comprised of U S WEST Communications, U S WEST 
Communications Services, Inc., U S WEST Communications Federal Services, Inc., 
U  S WEST Advanced Technologies, Inc. and U S WEST Business Resources, Inc.  U 
S  WEST  Communications comprised approximately 98 percent of the revenues and 
assets of the Communications Group in 1994. 
 
The  Media  Group  is comprised of U S WEST Marketing Resources Group, Inc., a 
publisher  of  White  and  Yellow Pages telephone directories, and provider of 
multimedia content and services, U S WEST NewVector Group, Inc., which 
provides  communications  and  information products and services over wireless 
networks,  U S WEST Multimedia Communications, Inc., which owns domestic cable 
television  operations  and  investments and, U S WEST International Holdings, 
Inc., which primarily owns investments in international cable and 
telecommunications, wireless communications and directory publishing 
operations. 
 
<PAGE> 
 
 Form 10-Q - Part I 
 
              NOTES TO COMBINED FINANCIAL STATEMENTS, continued 
                            (Dollars in millions) 
                                 (Unaudited) 
 
Dividends  to be paid to the holders of Communications Stock will initially be 
$0.535  per  share per quarter.  Dividends on the Communications Stock will be 
paid  at the discretion of the Board of Directors of U S WEST, based primarily 
upon  the financial condition, results of operations and business requirements 
of  the  Communications  Group and the Company as a whole.  With regard to the 
Media  Stock,  the  Board of Directors of U S WEST currently intends to retain 
future  earnings,  if any, for the development of the Media Group's businesses 
and does not anticipate paying dividends on the Media Stock in the foreseeable 
future. 
 
 B. Summary of Significant Accounting Policies 
 
Combined Financial Statements 
 
The  Combined  Financial Statements of the Groups comprise all of the accounts 
included in the corresponding Consolidated Financial Statements of the 
Company.  Investments in less than majority-owned ventures are generally 
accounted  for using the equity method.  The separate Group Combined Financial 
Statements  give  effect  to  the accounting policies that are applicable upon 
implementation of the Recapitalization Plan.  The separate Group Combined 
Financial Statements have been prepared on a basis that management believes to 
be reasonable and appropriate and include: (i) the combined historical balance 
sheets,  results  of operations and cash flows of the businesses that comprise 
each  of  the Groups, with all significant intragroup amounts and transactions 
eliminated;  (ii)  in  the case of the Communications Group Combined Financial 
Statements,  certain  corporate assets and liabilities of U S WEST and related 
transactions  identified  with  the Communications Group; (iii) in the case of 
the  Media Group Combined Financial Statements, all other corporate assets and 
liabilities and related transactions of U S WEST; and (iv) an allocated 
portion of the corporate expense of U S WEST.  Transactions between the 
Communications Group and the Media Group have not been eliminated. 
 
 
 
<PAGE> 
 
Form 10-Q - Part I 
 
              NOTES TO COMBINED FINANCIAL STATEMENTS, continued 
                            (Dollars in millions) 
                                 (Unaudited) 
 
Notwithstanding the allocation of assets and liabilities (including contingent 
liabilities) and stockholders' equity between the Communications Group and the 
Media  Group  for the purpose of preparing the respective financial statements 
of  such Group, holders of Communications Stock and Media Stock are subject to 
risks associated with an investment in a single company and all of the 
Company's  businesses,  assets and liabilities.  Such allocation of assets and 
liabilities  and change in the equity structure of the Company does not result 
in  a distribution or spin-off to shareholders of any assets or liabilities of 
the  Company or any of its subsidiaries or otherwise affect responsibility for 
the  liabilities of the Company or such subsidiaries.  As a result, the rights 
of the holders of the Company's or any of its subsidiaries' debt are not 
affected.  Financial effects arising from either Group that affect the 
Company's  results of operations or financial condition could, if significant, 
affect  the  results of operations or financial position of the other Group or 
the  market  price  of the class of common stock relating to the other Group.  
Any  net  losses of the Communications Group or the Media Group, and dividends 
or  distributions  on,  or repurchases of Communications Stock, Media Stock or 
Preferred  Stock,  will  reduce the funds of the Company legally available for 
payment of dividends on both the Communications Stock and Media Stock.  
Accordingly,  the Communications Group Combined Financial Statements should be 
read  in  conjunction with the Company's Consolidated Financial Statements and 
the Media Group Combined Financial Statements. 
 
The  Combined  Financial Statements have been prepared by the Company pursuant 
to the rules and regulations of the Securities and Exchange Commission 
("SEC").    Certain information and footnote disclosures normally accompanying 
financial statements prepared in accordance with generally accepted accounting 
principles have been condensed or omitted pursuant to such SEC rules and 
regulations.  In the opinion of the Company's management, the Combined 
Financial Statements include all adjustments, consisting of only normal 
recurring  adjustments,  necessary to present fairly the financial information 
set  forth  therein.  It is suggested that these Combined Financial Statements 
be read in conjunction with the financial statements and notes thereto 
included in the Company's proxy statement mailed to all shareholders on 
September 5, 1995. 
 
Certain  reclassifications  within the Combined Financial Statements have been 
made to conform to the current year presentation. 
 
 
<PAGE> 
 
 Form 10-Q - Part I 
 
              NOTES TO COMBINED FINANCIAL STATEMENTS, continued 
                            (Dollars in millions) 
                                 (Unaudited) 
 
C.     Contingencies 
 
At U S WEST Communications there are pending regulatory actions in local 
regulatory  jurisdictions  that call for price decreases, refunds or both.  In 
one  such  instance, the Utah Supreme Court has remanded a Utah Public Service 
Commission  ("PSC") order to the PSC for reconsideration, thereby establishing 
two  exceptions to the rule against retroactive ratemaking:  1) unforeseen and 
extraordinary  events,  and  2)  misconduct.  The PSC's initial order denied a 
refund  request  from  interexchange carriers and other parties related to the 
Tax  Reform Act of 1986.  This action is still in the discovery process.  If a 
formal  filing  -  made in accordance with the remand from the Supreme Court - 
alleges that the exceptions apply, the range of possible risk is $0 to $140. 
 
 D.     Debt 
 
During third quarter 1995, U S WEST Communications refinanced $410 of 
commercial  paper to take advantage of favorable long-term interest rates.  In 
addition  to  the  commercial paper, U S WEST Communications refinanced $90 of 
long-term  debt.  Expenses  associated  with the refinancing of long-term debt 
resulted in an extraordinary charge to income of $5, net of an income tax 
benefit of $3. 
 
Subsequent  to  third quarter 1995, U S WEST Communications refinanced $750 of 
commercial paper. 
 
 
<PAGE> 
 
Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions, except per share amounts) 
 
Results of Operations 
 
Comparative  details  of  income  before extraordinary item for three and nine 
months ended September 30 follow: 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                                  <C>         <C>         <C>      <C>         <C>         <C> 
 
                                         3 Mos.      3 Mos.               9 Mos.      9 Mos. 
                                     Ended       Ended                Ended       Ended 
                                     Sept. 30,   Sept. 30,   Percent  Sept. 30,   Sept. 30,   Percent 
Dollars in millions                        1995        1994  Change         1995        1994  Change 
Income before extraordinary item     $      292  $      267      9.4  $      900  $      851      5.8 
Pro forma earnings per share before 
     extraordinary item              $     0.62  $     0.59      5.1  $     1.91  $     1.89      1.1 
</TABLE> 
 
 
The Communications Group's third quarter 1995 income before extraordinary item 
was $276, an increase of $9, or 3.4 percent, over third quarter 1994, 
excluding  a gain of $21 on the sale of rural telephone exchanges and expenses 
of $5 associated with the Recapitalization Plan, both in third quarter 1995. 
 
Increased  income at the Communications Group is attributable to higher demand 
for  services,  access line growth and lower employee benefit costs, including 
the effects of certain benefit cost true-ups.  Partially offsetting these 
items  was an increase in operating costs incurred to address current customer 
service issues, increased depreciation expense and higher interest expense. 
 
Third quarter 1995 pro forma earnings per share before extraordinary item 
("earnings  per  share")  were $0.59, unchanged from the prior year, excluding 
the effects of the gain on sale of rural telephone exchanges ($0.04 per share) 
and  expenses  associated  with  the Recapitalization Plan ($0.01 per share).  
Earnings per share in 1995 reflect approximately 16 million additional average 
shares  outstanding,  of which 12.8 million were issued in connection with the 
December  1994  purchase  by the Media Group of cable television properties in 
the Atlanta, Georgia area. 
 
For the nine months ended September 30, 1995, income before extraordinary item 
was  $835, an increase of $15, or 1.8 percent, excluding gains on the sales of 
rural  telephone  exchanges of $70 ($0.14 per share) and $31 ($0.07 per share) 
in 1995 and 1994, respectively, and expenses of $5 ($0.01 per share) 
associated with the Recapitalization Plan in 1995.  Earnings per share for the 
nine  months  ended  September 30, 1995, excluding one time items, were $1.78, 
compared with $1.82 in the same period in 1994. 
 
 
<PAGE> 
 
Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions, except per share amounts), 
continued 
 
Increased demand for the Communications Group's services resulted in growth in 
earnings before interest, taxes, depreciation, amortization and other 
("EBITDA") of 5.8 and 4.8 percent for third quarter and nine months ended 
September  30, 1995, respectively, as compared with the same periods in 1994.  
The Communications Group believes EBITDA is an important indicator of the 
operational strength of its businesses.  EBITDA, however, should not be 
considered as an alternative to operating or net income as an indicator of the 
performance  or as an alternative to cash flows from operating activities as a 
measure of liquidity, in each case determined in accordance with GAAP. 
 
Sales and Other Revenues 
 
An analysis of changes in the Communications Group's revenues follows: 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                    <C>     <C>     <C>        <C>       <C>       <C>      <C>        <C> 
 
Dollars in millions                               Lower                        Incr.      Inc. 
                                       Price      (Higher)                       (Decr.)   (Decr.) 
                         1995    1994  Changes    Refunds   Demand    Other    Dollars    Percent 
Local service 
   Third quarter       $1,105  $1,034  $      5       ($7)  $    73   $    -   $     71       6.9  
   Nine months          3,231   3,035         9        (7)      194        -        196       6.5  
Interstate access 
   Third quarter          594     573        (9)       (5)       36       (1)        21       3.7  
   Nine months          1,774   1,691       (27)      (15)      126       (1)        83       4.9  
Intrastate access 
   Third quarter          186     188       (12)        4         6        -         (2)     (1.1) 
   Nine months            558     541       (24)        7        26        8         17       3.1  
Long-distance network 
   Third quarter          298     323        (5)        -       (14)      (6)       (25)     (7.7) 
   Nine months            891   1,019       (20)        -       (42)     (66)      (128)    (12.6) 
Other services 
   Third quarter          206     198                                      8          8       4.0  
   Nine months            591     564                                     27         27       4.8  
Total 
   Third quarter        2,389   2,316       (21)       (8)      101        1         73       3.2  
   Nine months         $7,045  $6,850      ($62)     ($15)  $   304     ($32)  $    195       2.8  
</TABLE> 
 
 
Local  service revenues increased principally as a result of higher demand for 
services, as evidenced by an increase of 495,000 access lines, or 3.5 percent, 
during the last 12 months.  Access line growth was 4.2 percent as adjusted for 
sales of approximately 103,000 rural telephone access lines during the last 12 
months. 
 
Higher  revenues  from  interstate  access services resulted from increases of 
10.0  and 9.4 percent in interstate billed access minutes of use for the three 
and  nine  months ended September 30, 1995, respectively, as compared with the 
same  periods  in 1994.  The increased volume of business more than offset the 
effects of price reductions and refunds. 
 
<PAGE> 
 
Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions, except per share amounts), 
continued 
 
Intrastate  access revenues decreased for the three months ended September 30, 
1995,  compared  with the same period in 1994, primarily due to the effects of 
price reductions, partially offset by higher demand.  Intrastate access 
revenues increased for the nine months ended September 30, 1995, compared with 
1994, primarily due to the impacts of multiple toll carrier plans. 
 
Multiple  toll  carrier plans ("MTCP") implemented in Oregon and Washington in 
May  and July 1994, respectively, allow independent telephone companies to act 
as  toll carriers.  The impact on the Communications Group for the nine months 
ended  September  30, 1995, was long-distance revenue losses of $62, partially 
offset by increases in intrastate access revenue of $12 and decreases in other 
operating expenses (i.e. access expense) of $42.  These regulatory 
arrangements did not impact third quarter results. 
 
Long-distance network revenues decreased by 7.7 and 12.6 percent for the three 
months  and  nine months ended September 30, 1995, respectively, compared with 
the same periods in 1994, primarily due to the effects of competition and 
price  reductions.    Adjusted  for the effects of MTCP, long-distance network 
revenues decreased by 6.5 percent for the nine months ended September 30, 
1995, compared with the same period last year. 
 
Revenues from other services increased primarily as a result of continued 
market penetration in voice messaging services, increases in inside wire 
services,  sales of customer premise equipment and wire installation projects, 
partially offset by decreases in billing and collection revenues. 
 
Costs and Expenses 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                            <C>         <C>         <C>       <C>         <C>         <C> 
 
                                   3 Mos.      3 Mos.                9 Mos.      9 Mos. 
                               Ended       Ended                 Ended       Ended 
                               Sept. 30,   Sept. 30,   Percent   Sept. 30,   Sept. 30,   Percent 
                                     1995        1994  Change          1995        1994  Change 
Employee-related expenses      $      835  $      828      0.8   $    2,479  $    2,411      2.8  
Other operating expenses              404         389      3.9        1,099       1,123     (2.1) 
Taxes other than income taxes          95         102     (6.9)         306         301      1.7  
Depreciation and amortization         513         476      7.8        1,514       1,420      6.6  
Interest expense                      108          94     14.9          315         277     13.7  
Other expense-net                      14           5        -           30          21     42.9  
</TABLE> 
 
 
Higher  employee-related  expenses  are primarily the result of initiatives to 
improve  customer  service  and address business growth.  Customer service has 
been impacted by temporary declines in productivity partly caused by 
restructuring efforts.  Higher levels of employee-related expenses are 
expected to continue through the remainder of the year.  Overtime payments and 
contract  labor  increased  employee-related expenses by approximately $54 and 
$149  for  third  quarter  and the first nine months of 1995, respectively, as 
compared  with the same periods in 1994.  Partially offsetting these increases 
was  a  reduction  in the accrual for postretirement benefits, certain benefit 
cost true-ups and lower travel and conference expenses. 
 
<PAGE> 
 
Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions, except per share amounts), 
continued 
 
Since  December  1993,  the Communications Group has separated 4,299 employees 
under the Restructuring Plan.  ("See "Restructuring Charges.")  These 
separations  have been partially offset by the addition of approximately 2,600 
employees  (a  significant portion of which are temporary) primarily dedicated 
to improving customer service and also developing new business opportunities.  
Benefits from the net work-force reductions have offset wage and salary 
increases. 
 
The Communications Group estimates that it will achieve employee reductions of 
9,000 in connection with the Restructuring Plan by the end of 1997.  (See 
"Restructuring  Charges.")  These employee reductions will be partially offset 
by  the  planned  addition of some employees by the end of 1997 to accommodate 
business growth, including wireless cable and data transmission services. 
 
The  increase  in other operating expenses during third quarter 1995 is due to 
several  items,  including costs associated with the sales of customer premise 
equipment and wire installation projects.  For the nine months ended September 
30,  1995,  other  operating expenses decreased primarily due to the effect of 
the multiple toll carrier plans. 
 
Increased depreciation and amortization expense was attributable to the 
effects of a higher depreciable asset base.  Interest expense increased 
primarily as a result of an increased use of debt financing. 
 
Liquidity and Capital Resources 
 
Cash provided by operations decreased by $63 compared with the first nine 
months of 1994.  Business growth was more than offset by the effects of 
increased expenditures related to implementation of the Restructuring Plan. 
 
U S WEST, Inc. ("U S WEST" or "Company") from time to time engages in 
discussions  regarding  acquisitions.   The Company may fund such acquisitions 
with internally generated funds, debt or equity.  The incurrence of 
indebtedness  to  fund such acquisitions and/or the assumption of indebtedness 
in connection with acquisitions, if significant, could result in a downgrading 
of the credit rating of the Company and/or U S WEST Communications. 
 
In  the first nine months of 1995, Communications Group received cash proceeds 
of  $162  from  the sale of certain rural telephone exchanges as compared with 
proceeds of $51 in the same period last year. 
 
<PAGE> 
 
 Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions, except per share amounts), 
continued 
 
During the first nine months of 1995, debt increased by $714 and the 
percentage  of  debt  to total capital increased from 65.8 percent at December 
31, 1994, to 67.6 percent at September 30, 1995.  The increase in debt and the 
percentage of debt to total capital was primarily related to increased 
expenditures (including capital related to service quality issues and 
implementation of the Restructuring Plan) and cash fundings for postretirement 
medical and life costs. 
 
During the first nine months of 1995, the Communications Group made cash 
equity infusions of $105 to the Media Group.  As of November 1, 1995, the 
effective  date  of  the Recapitalization Plan, the Company does not intend to 
transfer  funds  between  the  Groups, except for certain short-term, ordinary 
course advances of funds associated with the Company's centralized cash 
management.  Such short-term transfers of funds will be accounted for as 
short-term  loans  between  the  Groups bearing interest at the market rate at 
which management determines the borrowing Group could obtain funds on a 
short-term basis.  If the Board of Directors of U S WEST (the "Board"), in its 
sole discretion, determines that a transfer of funds between the Groups should 
be  accounted  for as a long-term loan, the Board would establish the terms on 
which such loan would be made, including the interest rate, amortization 
schedule,  maturity  and redemption terms.  Such terms would generally reflect 
the  then  prevailing  terms upon which management determines such Group could 
borrow  funds  on  a similar basis.  The financial statements of the borrowing 
Group will be charged with the amount of any such loan, as well as with 
periodic  interest  accruing thereon.  The Board may determine that a transfer 
of  funds from the Communications Group to the Media Group should be accounted 
for as an equity contribution, in which case an Inter-Group Interest 
(determined  by  the Board based on the then current Market Value of shares of 
Media  Stock)  will either be created or increased, as applicable.  Similarly, 
if  an Inter-Group Interest exists, the Board may determine that a transfer of 
funds from the Media Group to the Communications Group should be accounted for 
as a reduction in the Inter-Group Interest. 
 
 Restructuring 
 
The Communications Group's 1993 results reflected an $880 restructuring charge 
(pretax).  The related restructuring plan (the "Restructuring Plan") is 
designed  to  provide faster, more responsive customer services while reducing 
the  costs of providing these services.  As part of the Restructuring Plan new 
systems and enhanced system functionality are being developed that will enable 
it  to  monitor networks to reduce the risk of service interruptions, activate 
telephone service on demand, rapidly design and engineer new services for 
customers  and  centralize  its  service centers.  The Communications Group is 
consolidating  its  560  customer service centers into 26 centers in 10 cities 
and reducing its total work force by approximately 9,000 employees. 
 
<PAGE> 
 
Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions, except per share amounts), 
continued 
 
The Restructuring Plan is scheduled to be completed by the end of 1997.  
Implementation  to  date has been driven by growth in the business and related 
service issues, revisions to system delivery schedules and productivity issues 
caused  by  the  major rearrangement of resources due to restructuring.  These 
issues may continue to affect the timing of the implementation of the 
Restructuring Plan. 
 
Following is a schedule of the costs included in the Restructuring Plan: 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                            <C>      <C>        <C>        <C>        <C> 
 
                               Actual   Estimate   Estimate   Estimate 
                                  1994       1995       1996       1997  Total 
Cash expenditures: 
  Employee separation (1)      $    19  $      75  $      96  $      65  $  255 
  Systems development              118        145         97          -     360 
  Real estate                       50         71          9          -     130 
  Relocation                        21         23         31          -      75 
  Retraining and other               8         27         15         10      60 
Total cash expenditures            216        341        248         75     880 
Remaining 1991 plan employee        56          -          -          -      56 
     costs (1) 
Total                          $   272  $     341  $     248  $      75  $  936 
 
<FN> 
 
(1) Employee separation costs, including the balance of the 1991 restructuring 
reserve at December 31, 1993, aggregate $311. 
</FN> 
</TABLE> 
 
 
 
Employee separation costs include severance payments, health-care coverage and 
postemployment education benefits.  System development costs include new 
systems and the application of enhanced system functionality to existing 
single  purpose systems to provide integrated, end-to-end customer service.  A 
substantial portion of the work-force reductions will be enabled by developing 
new systems and enhanced system functionality, which will simplify the 
current,  labor-intensive  interfaces between existing processes.  Real estate 
costs  include  preparation costs for the new service centers.  The relocation 
and retraining costs are related to moving employees to the new service 
centers  and  retraining  employees on the methods and systems required in the 
new, restructured mode of operation. 
 
The Communications Group estimates that full implementation of the 
Restructuring Plan will reduce employee-related expenses by approximately $400 
per year.  These savings are expected to be offset by the effects of 
inflation.  Future operating costs also will be impacted by business growth. 
 
 
<PAGE> 
 
Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions, except per share amounts), 
continued 
 
Employee Separation.  Net employee reductions will total 9,000 under the 
Restructuring Plan.  While the Communications Group will separate 10,000 
employees, approximately 1,000 employees that were originally expected to 
relocate have chosen separation or other job assignments and will be replaced. 
 The estimated total cost for employee separations is $311, compared with $281 
in the original estimate.  The $30 cost associated with these additional 
employee  separations has been reclassified from relocation to the reserve for 
employee separations. 
 
The  following  estimates  of employee separations and related amounts reflect 
the extension of employee reductions into 1997: 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                   <C>       <C>       <C>       <C>       <C>       <C> 
 
                      Estimate  Actual    Estimate  Estimate  Estimate 
                          1994  1994 (1)      1995      1996      1997  Total 
Employee separations 
 
 
  Managerial             1,061      497        612     1,090       521   2,720 
  Occupational           1,887    1,683      1,638     2,310     1,649   7,280 
  Total                  2,948    2,180      2,250     3,400     2,170  10,000 
 
 
<CAPTION> 
 
 
 
<S>                          <C>        <C>         <C>        <C>        <C>        <C> 
 
                             Estimate   Actual      Estimate   Estimate   Estimate 
                                  1994   1994 (1)`       1995       1996       1997  Total 
Employee separation amounts 
  Managerial                 $      22  $        5  $      21  $      40  $      19  $   85 
  Occupational                      15          14         54         56         46     170 
  Total                             37          19         75         96         65     255 
   Remaining 1991 reserve           56          56          -          -          -      56 
  Total                      $      93  $       75  $      75  $      96  $      65  $  311 
<FN> 
 
<F1> 
(1)   Includes the remaining employees and the separation amounts associated with the 
balance of the 1991 restructuring reserve at 
December 31, 1993 
</FN> 
</TABLE> 
 
 
Compared with the original estimates, employee reductions and separation 
amounts  shown above have been reduced by 1,219 and $27 in 1995, and increased 
by 800 and $10 in 1996, and 2,170 and $65 in 1997. 
 
Systems Development.  The existing information management systems were largely 
developed to support a monopoly environment.  These systems have become 
increasingly inadequate due to the effects of increased competition, new forms 
of regulation and changing technology that have driven consumer demand for new 
services that can be delivered quickly, reliably and economically.  The 
Communications  Group  believes  that  improved customer service, delivered at 
lower  cost,  can  be achieved by a combination of new systems and introducing 
new functionality to existing systems.  This is a change from the initial 
strategy  which  placed  more emphasis on the development of new systems.  The 
Restructuring Plan is now less dependent on development of entirely new, 
untested systems and related technology. 
 
<PAGE> 
 
 Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions, except per share amounts), 
continued 
 
The systems development program involves new systems and enhanced system 
functionality for systems that support the following core processes: 
 
Service Delivery - to support service on demand for all products and services. 
           These new systems and enhanced system functionality will permit one 
          customer service representative to handle all facets of a customer's 
        requirements as contrasted to the numerous points of customer 
        interface required today. 
 
Service  Assurance  -  for performance monitoring from one location and remote 
        testing in the new environment, including identification and 
        resolution of faults prior to customer impact. 
 
Capacity  Provisioning  -  for integrated planning of future network capacity, 
        including the installation of software controllable service 
        components. 
 
The  direct,  incremental  and nonrecurring costs of providing new systems and 
enhanced system  functionality follow: 
 
 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                    <C>        <C>      <C>        <C>        <C> 
 
                       Estimate   Actual   Estimate   Estimate 
                            1994     1994       1995       1996  Total 
Service delivery       $      35  $    21  $      21  $      31  $   73 
Service assurance             45       12         24         28      64 
Capacity provisioning         17       57         92         30     179 
All other                      8       28          8          8      44 
Total                  $     105  $   118  $     145  $      97  $  360 
 
</TABLE> 
 
 
The Communications Group continues to review its estimates of systems 
expenditures under the Restructuring Plan.  Material revisions in total 
estimated expenditures are not anticipated.  However, should expenditures 
exceed the remaining reserve, additional amounts would be expensed as 
incurred. 
 
Systems  expenses  charged  to  current operations consist of costs associated 
with the information management function, including planning, developing, 
testing  and maintaining data bases for general purpose computers, in addition 
to  systems  costs  related to maintenance of telephone network applications.  
Other  systems  expenses are for administrative (i.e. general purpose) systems 
which  include customer service, order entry, billing and collection, accounts 
payable, payroll, human resources and property records.  Ongoing systems costs 
comprised  approximately six percent of total operating expenses in 1994, 1993 
and  1992.   The Communications Group expects systems costs charged to current 
operations as a percent of total operating expenses to approximate the current 
level  throughout  the life of the Restructuring Plan.  However, systems costs 
could  increase relative to other operating costs as the business becomes more 
technology dependent. 
  
<PAGE> 
 
Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions, except per share amounts), 
continued 
 
Progress Under the Restructuring Plan: 
 
Following is a reconciliation of restructuring reserve activity since December 
1993. 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                      <C>        <C>        <C>        <C>          <C>           <C> 
 
                                                                       Change in 
                                                          First Nine   Relocation 
                                               Reserve    Months       Employee      Reserve 
                         Reserve         1994  Balance           1995  Separation    Balance 
                          12/31/93  Activity    12/31/94  Activity     Estimates      9/30/95 
Employee separations 
  Managerial             $      75  $       5  $      70  $        19  $         7   $     58 
  Occupational                 150         14        136           48           23        111 
Total separations              225         19        206           67           30        169 
Systems Development 
  Service delivery              73         21         52           13                      39 
  Service assurance             64         12         52           16                      36 
  Capacity provisioning        179         57        122           65                      57 
   All other                    44         28         16            3                      13 
Total systems                  360        118        242           97                     145 
Real estate                    130         50         80           58                      22 
Relocation                     105         21         84           13          (30)        41 
Retraining and other            60          8         52           18                      34 
Total                          880        216        664          253                     411 
Remaining 1991 Plan 
    expenditures                56         56          -            -            -          - 
 Total                   $     936  $     272  $     664  $       253  $         -   $    411 
 
</TABLE> 
 
 
 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                   <C>               <C>                <C> 
 
                                                           Cumulative 
                                        First Nine Months  Separations 
                      1994 Separations   1995 Separations  At September 30,1995 
Employee separations 
  Managerial                       497                581                 1,078 
  Occupational                   1,683              1,538                 3,221 
Total                            2,180              2,119                 4,299 
 
</TABLE> 
 
 
Recapitalization Plan 
 
On October 31, 1995, the shareholders of U S WEST, Inc., a Colorado 
corporation, voted to approve a proposal by the Board of Directors to 
reincorporate from Colorado to Delaware and create two classes of common 
stock,  the  Communications  Stock  and the Media Stock, which are intended to 
reflect separately the performance of the communications and multimedia 
businesses.    For a more complete discussion on the Recapitalization Plan see 
Note A in the Notes to the Combined Financial Statements. 
 
<PAGE> 
 
 Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions, except per share amounts), 
continued 
 
Broadband 
 
In 1993, the Communications Group announced its intention to build an 
interactive  multimedia  telecommunications network (the "Broadband Network")  
capable  of  providing  voice, data and video services to customers within its 
region.   Limited testing of the Broadband Network began in Omaha, Nebraska in 
December  1994.  A market trial in the Omaha area that will cover up to 50,000 
homes commenced in August 1995. 
 
In early 1994, U S WEST Communications filed applications with the FCC to 
install  Broadband  Network architecture in Denver; Minneapolis-St. Paul; Salt 
Lake City; Boise; and Portland, Oregon (collectively, the "Broadband 
Applications").    In May 1995, U S WEST Communications withdrew the Broadband 
Applications.    The  Communications Group is evaluating the relative costs of 
alternative video technologies, as well as the near-term feasibility of 
interactive  services.    In  order to satisfy anticipated demand for combined 
video  and  telephony  services  on a cost-effective basis, the Communications 
Group's strategy may include selective investments in wireless cable 
technologies. 
 
Regulatory 
 
On  October 11, 1995, the U.S. Justice Department recommended that U S WEST be 
allowed to offer long-distance telephone service outside its 14-state region.  
The agreement, among U S WEST, the Justice Department and AT&T, must be 
approved by U. S. District Court Judge Harold Greene, who oversees the consent 
decree  that  broke up AT&T in 1984, and barred the Regional Holding Companies 
from a number of businesses, including interLATA long distance. 
 
If approved by Judge Greene, U S WEST will be able to offer long-distance 
service  outside  U  S WEST's local service territory.  Such an approval would 
mean that U S WEST would be the first Regional Holding Company allowed to 
offer interLATA long-distance service outside its region. 
 
Union Contract 
 
On  October 2, 1995, U S WEST union members approved a new three-year contract 
with  the Company.  The contract provides for salary increases of 10.6 percent 
over three years effective January 1 of each year.  The contract also provides 
employees with a lump sum payment of $1,500 in lieu of wage increases becoming 
effective  in August each year.  This lump sum payment will be recognized over 
the  life of the contract.  The agreement covers 33,000 Communications Workers 
of  America members who work for U S WEST Communications and U S WEST Business 
Resources. 
 
 
<PAGE> 
 
Form 10-Q - Part I 
 
Item 2.  Management's' Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions, except per share amounts), 
continued 
 
Contingencies 
 
There  are  pending  regulatory actions in local regulatory jurisdictions that 
call  for  price  decreases,  refunds or both.  In one such instance, the Utah 
Supreme  Court  has remanded a Utah Public Service Commission ("PSC") order to 
the  PSC  for reconsideration, thereby establishing two exceptions to the rule 
against  retroactive  ratemaking:  1) unforeseen and extraordinary events, and 
2) misconduct.  The PSC's initial order denied a refund request from 
interexchange carriers and other parties related to the Tax Reform Act of 
1986.    This  action is still in the discovery process.  If a formal filing - 
made  in  accordance with the remand from the Supreme Court - alleges that the 
exceptions apply, the range of possible risk is $0 to $140. 
 
 
     85 
 
Form 10-Q - Part I 
 
COMBINED STATEMENTS OF INCOME 
(Unaudited)                                            U S WEST MEDIA GROUP 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                                                 <C>          <C>         <C>          <C> 
 
                                                        3 Mos.       3 Mos.      9 Mos.       9 Mos. 
                                                    Ended        Ended       Ended        Ended 
                                                    Sept. 30,    Sept. 30,   Sept. 30,    Sept. 30, 
Dollars in millions (except per share amounts)            1995         1994        1995         1994 
 
Sales and other revenues                            $      604   $      482  $    1,725   $    1,359 
 
Cost of sales and other revenues                           193          161         539          433 
Selling, general and administrative                        204          162         634          498 
Depreciation and amortization                               60           33         181           99 
Interest expense                                            29           10          89           46 
Equity losses in unconsolidated ventures                    38           26         128           83 
Gain on sale of paging assets                                -            -           -           68 
Guaranteed minority interest expense                         2            -           2            - 
Other income - net                                           6            2          24           32 
 
Income before income taxes and extraordinary item 
                                                            84           92         176          300 
Provision for income taxes                                  51           41         103          134 
 
Income before extraordinary item                            33           51          73          166 
 
Extraordinary item: 
  Early extinguishment of debt, net of tax                  (4)           -          (4)           - 
 
NET INCOME                                                  29           51          69          166 
 
Preferred dividends                                          1            -           3            - 
 
Earnings available after preferred stock dividend 
                                                    $       28   $       51  $       66   $      166 
 
Pro forma earnings per common share: 
  Income available for common stock before 
    extraordinary item                              $     0.07   $     0.11  $     0.15   $     0.37 
  Extraordinary item                                    ( 0.01)           -      ( 0.01)           - 
PRO FORMA EARNINGS PER COMMON 
SHARE                                               $     0.06   $     0.11  $     0.14   $     0.37 
 
 PRO FORMA AVERAGE COMMON 
SHARES OUTSTANDING (thousands)                         471,229      454,997     470,076      451,037 
 
<FN> 
 
See Notes to Combined Financial Statements. 
</FN> 
</TABLE> 
 
 
<PAGE> 
 
Form 10-Q - Part I 
 
COMBINED BALANCE SHEETS 
(Unaudited)                               U S WEST MEDIA GROUP 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                                        <C>             <C> 
 
                                           September 30,   Decmeber 31, 
Dollars in millions                                  1995           1994 
 
ASSETS 
Current assets: 
     Cash and cash equivalents             $           27  $          93 
     Accounts and notes receivable                    250            212 
     Deferred directory costs                         246            234 
     Receivable from Communications Group              89            109 
     Other                                             91            108 
Total current assets                                  703            756 
 
Gross property, plant and equipment                 1,603          1,436 
Accumulated depreciation                              541            480 
 
Property, plant and equipment - net                 1,062            956 
 
Investment in Time Warner Entertainment             2,501          2,522 
Intangible assets - net                             1,824          1,858 
Investment in international ventures                1,361            881 
Net investment in assets held for sale                418            302 
Other assets                                          581            119 
 
 Total assets                              $        8,450  $       7,394 
 
<FN> 
 
See Notes to Combined Financial Statements. 
</FN> 
</TABLE> 
 
 
 
<PAGE> 
 
Form 10-Q - Part I 
 
COMBINED BALANCE SHEETS 
(Unaudited), Continued              U S WEST MEDIA GROUP 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                                                       <C>              <C> 
 
                                                          September 30,    December 31, 
Dollars in millions                                                 1995            1994  
 
LIABILITIES AND EQUITY 
 
Current liabilities: 
     Short-term debt                                      $        1,548   $       1,229  
     Accounts payable                                                169             170  
     Income taxes payable                                            202              86  
     Deferred revenue and customer deposits                           96              76  
      Other                                                          327             372  
Total current liabilities                                          2,342           1,933  
 
Long-term debt                                                       398             585  
Deferred taxes, credits and other                                    567             622  
 
Company-obligated mandatorily redeemable preferred 
   securities of subsidiary trust holding solely Company 
   guaranteed debentures                                             600               -  
Preferred stock subject to mandatory redemption                       51              51  
 
Media Group equity                                                 4,649           4,390  
Company LESOP guarantee                                             (157)           (187) 
 
Total equity                                                       4,492           4,203  
 
Total liabilities and equity                              $        8,450   $       7,394  
 
<FN> 
 
See Notes to Combined Financial Statements. 
</FN> 
</TABLE> 
 
 
 
<PAGE> 
 
Form 10-Q - Part I 
 
COMBINED STATEMENTS OF CASH FLOWS 
(Unaudited)                         U S WEST MEDIA GROUP 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                                                      <C>       <C> 
 
Dollars in millions 
Nine Months Ended September 30,                             1995    1994  
 
OPERATING ACTIVITIES 
   Net income                                            $    69   $ 166  
   Adjustments to net income: 
      Depreciation and amortization                          181      99  
      Gain on sale of paging assets                            -     (68) 
      Equity losses in unconsolidated ventures               128      83  
      Deferred income taxes and amortization 
         of investment tax credits                           (28)     50  
   Changes in operating assets and liabilities: 
      Accounts and notes receivable                          (15)    (48) 
      Deferred directory costs, prepaid and other            (18)    (58) 
      Accounts payable and accrued liabilities               107     131  
   Other adjustments - net                                    40      26  
    Cash provided by operating activities                    464     381  
INVESTING ACTIVITIES 
   Expenditures for property, plant and equipment           (240)   (199) 
   Investment in international ventures                     (576)   (214) 
   Cash (to) net investment in assets held for sale         (108)      -  
   Proceeds from sale of paging assets                         -     143  
   Other - net                                              (269)    (97) 
   Cash (used for) investing activities                   (1,193)   (367) 
FINANCING ACTIVITIES 
   Net proceeds from issuance of short-term debt             323      71  
   Repayments of long-term debt                             (384)   (201) 
   Proceeds from issuance of trust originated preferred 
       securities - net                                      581       -  
   Dividends paid on preferred stock                          (3)      -  
   Proceeds from issuance of common stock                    104     305  
   Proceeds form issuance of preferred stock                   -      50  
   Equity transfer from Communications Group                 105       -  
   Purchase of treasury stock                                (63)      -  
   Cash provided by financing activities                     663     225  
   Cash (used for) provided by continuing operations         (66)    239  
   Cash (to) discontinued operations                           -     (59) 
CASH AND CASH EQUIVALENTS 
   (Decrease) increase                                       (66)    180  
   Beginning balance                                          93      72  
   Ending balance                                        $    27   $ 252  
 
<FN> 
 
See Notes to Combined Financial Statements. 
</FN> 
</TABLE> 
 
 
 
<PAGE> 
 
Form 10-Q - Part I 
 
                    NOTES TO COMBINED FINANCIAL STATEMENTS 
                            (Dollars in millions) 
                                 (Unaudited) 
 
A.  Recapitalization Plan 
 
On October 31, 1995, the shareholders of U S WEST, Inc., a Colorado 
corporation ("U S WEST Colorado") voted to approve a proposal (the 
"Recapitalization  Plan")  adopted  by the Board of Directors to reincorporate 
from Colorado to Delaware and create two classes of common stock that are 
intended to reflect separately the performance of the communications and 
multimedia businesses.  Under the Recapitalization Plan, shareholders approved 
an  Agreement and Plan of Merger between U S WEST Colorado and U S WEST, Inc., 
a  Delaware  corporation ("U S WEST" or "Company"), pursuant to which U S WEST 
continues  as  the  surviving corporation.  In connection with the merger, the 
Certificate  of  Incorporation  of  U S WEST has been amended and restated to, 
among  other  things,  designate  two classes of common stock of U S WEST, one 
class  of  which  is  authorized as U S WEST Communications Group Common Stock 
("Communications  Stock"), and the other class is authorized as U S WEST Media 
Group Common Stock ("Media Stock").  Effective November 1, 1995, each share of 
common stock of U S WEST Colorado was converted into one share of 
Communications Stock and one share of Media Stock. 
 
The  Communications Stock and Media Stock are designed to provide shareholders 
with separate securities that are intended to reflect separately the 
communications businesses of U S WEST Communications, Inc. ("U S WEST 
Communications") and certain other subsidiaries of the Company (the 
"Communications  Group")  and  the Company's multimedia businesses (the "Media 
Group" and, together with the Communications Group, the "Groups"). 
 
The  Communications  Group  is  comprised of U S WEST Communications, U S WEST 
Communications Services, Inc., U S WEST Communications Federal Services, Inc., 
U  S WEST Advanced Technologies, Inc. and U S WEST Business Resources, Inc.  U 
S  WEST  Communications comprised approximately 98 percent of the revenues and 
assets of the Communications Group in 1994. 
 
The  Media  Group  is comprised of U S WEST Marketing Resources Group, Inc., a 
publisher  of  White  and  Yellow Pages telephone directories, and provider of 
multimedia content and services, U S WEST NewVector Group, Inc., which 
provides  communications  and  information products and services over wireless 
networks,  U S WEST Multimedia Communications, Inc., which owns domestic cable 
television  operations  and  investments  and U S WEST International Holdings, 
Inc., which primarily owns investments in international cable and 
telecommunications, wireless communications and directory publishing 
operations. 
 
 
<PAGE> 
Form 10-Q - Part I 
 
              NOTES TO COMBINED FINANCIAL STATEMENTS, continued 
                            (Dollars in millions) 
                                 (Unaudited) 
 
Dividends  to be paid to the holders of Communications Stock will initially be 
$0.535  per  share per quarter.  Dividends on the Communications Stock will be 
paid  at the discretion of the Board of Directors of U S WEST, based primarily 
upon  the financial condition, results of operations and business requirements 
of  the  Communications  Group and the Company as a whole.  With regard to the 
Media  Stock,  the  Board of Directors of U S WEST currently intends to retain 
future  earnings,  if any, for the development of the Media Group's businesses 
and does not anticipate paying dividends on the Media Stock in the foreseeable 
future. 
 
 B. Summary of Significant Accounting Policies 
 
Combined Financial Statements 
 
The  Combined  Financial Statements of the Groups comprise all of the accounts 
included in the corresponding Consolidated Financial Statements of the 
Company.  Investments in less than majority-owned ventures are generally 
accounted  for using the equity method.  The separate Group Combined Financial 
Statements  give  effect  to  the accounting policies that are applicable upon 
implementation of the Recapitalization Plan.  The separate Group Combined 
Financial Statements have been prepared on a basis that management believes to 
be reasonable and appropriate and include: (i) the combined historical balance 
sheets,  results  of operations and cash flows of the businesses that comprise 
each  of  the Groups, with all significant intragroup amounts and transactions 
eliminated;  (ii)  in  the case of the Communications Group Combined Financial 
Statements, corporate assets and liabilities of U S WEST and related 
transactions  identified  with  the Communications Group; (iii) in the case of 
the  Media Group Combined Financial Statements, all other corporate assets and 
liabilities and related transactions of U S WEST; and (iv) an allocated 
portion of the corporate expense of U S WEST.  Transactions between the 
Communications Group and the Media Group have not been eliminated. 
 
 
 
 
<PAGE> 
 
Form 10-Q - Part I 
 
              NOTES TO COMBINED FINANCIAL STATEMENTS, continued 
                            (Dollars in millions) 
                                 (Unaudited) 
 
Notwithstanding the allocation of assets and liabilities (including contingent 
liabilities) and stockholders' equity between the Communications Group and the 
Media  Group  for the purpose of preparing the respective financial statements 
of  such Group, holders of Communications Stock and Media Stock are subject to 
risks associated with an investment in a single company and all of the 
Company's  businesses,  assets and liabilities.  Such allocation of assets and 
liabilities  and change in the equity structure of the Company does not result 
in  a distribution or spin-off to shareholders of any assets or liabilities of 
the  Company or any of its subsidiaries or otherwise affect responsibility for 
the  liabilities of the Company or such subsidiaries.  As a result, the rights 
of the holders of the Company's or any of its subsidiaries' debt are not 
affected.  Financial effects arising from either Group that affect the 
Company's  results of operations or financial condition could, if significant, 
affect  the  results of operations or financial position of the other Group or 
the  market  price  of the class of common stock relating to the other Group.  
Any  net  losses of the Communications Group or the Media Group, and dividends 
or  distributions  on,  or repurchases of Communications Stock, Media Stock or 
Preferred  Stock,  will  reduce the funds of the Company legally available for 
payment of dividends on both the Communications Stock and Media Stock.  
Accordingly,  the  Media Group Combined Financial Statements should be read in 
conjunction with the Company's Consolidated Financial Statements and the 
Communications Group Combined Financial Statements. 
 
The  Combined  Financial Statements have been prepared by the Company pursuant 
to the rules and regulations of the Securities and Exchange Commission 
("SEC").    Certain information and footnote disclosures normally accompanying 
financial statements prepared in accordance with generally accepted accounting 
principles have been condensed or omitted pursuant to such SEC rules and 
regulations.  In the opinion of the Company's management, the Combined 
Financial Statements include all adjustments, consisting of only normal 
recurring  adjustments,  necessary to present fairly the financial information 
set  forth  therein.  It is suggested that these Combined Financial Statements 
be read in conjunction with the financial statements and notes thereto 
included in the Company's proxy statement mailed to all shareholders on 
September 5, 1995. 
 
Certain  reclassifications  within the Combined Financial Statements have been 
made to conform to the current year presentation. 
 
 
<PAGE> 
 
Form 10-Q - Part I 
 
              NOTES TO COMBINED FINANCIAL STATEMENTS, continued 
                            (Dollars in millions) 
                                 (Unaudited) 
 
C.     Investment in Time Warner Entertainment 
 
On September 15, 1993, U S WEST acquired 25.51 percent pro-rata priority 
capital  and  residual  equity  interests in Time Warner Entertainment Company 
L.P. ("TWE").  Summarized operating results for TWE follow: 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                             <C>          <C>         <C>          <C> 
 
                                    3 Mos.       3 Mos.      9 Mos.       9 Mos. 
                                Ended        Ended       Ended        Ended 
                                Sept. 30,    Sept. 30,   Sept. 30,    Sept. 30, 
                                      1995         1994        1995         1994 
 
Revenues                        $    2,324   $    2,203  $    6,762   $    6,177 
Operating expenses*                  2,056        1,968       6,037        5,512 
Interest and other - net**             195          170         556          480 
 
 Income before income taxes 
  and extraordinary item        $       73   $       65  $      169   $      185 
 
Income before extraordinary             47           41         107          145 
  item 
 
Extraordinary item, net of tax         (24)           -         (24)           - 
 
Net income                      $       23   $       41  $       83   $      145 
 
<FN> 
 
<F1> 
*     Includes 1995 and 1994 depreciation and amortization of $260 and $254, and 
$761 and $707 for the three and nine months ended, respectively. 
<F2> 
**     Includes 1995 and 1994 corporate services of $17 and $15, and $47 and $45 
for the three months and nine months ended, respectively. 
 </FN> 
</TABLE> 
 
 
The Company accounts for its investment in TWE under the equity method of 
accounting. U S WEST's recorded share of TWE operating results represents 
allocated  TWE  net income or loss adjusted for the amortization of the excess 
of  fair  market value over the book value of the partnership net assets.  The 
Company's  recorded  share  of TWE operating results before extraordinary item 
was ($3) and $1, and ($14) and ($5) for the three months and nine months ended 
September 30, 1995 and 1994, respectively.  In addition, TWE recorded an 
extraordinary loss for the early extinguishment of debt in third quarter 1995. 
The  Media Group's portion of this extraordinary loss was $4, net of an income 
tax benefit of $2. 
 
<PAGE> 
 
 Form 10-Q - Part I 
 
              NOTES TO COMBINED FINANCIAL STATEMENTS, continued 
                            (Dollars in millions) 
                                 (Unaudited) 
 
D.   Company-Obligated Mandatorily Redeemable Preferred Securities of 
Subsidiary Trust Holding Solely Company Guaranteed Debentures 
 
On  September 11, 1995, U S WEST Financing I, a wholly-owned subsidiary of U S 
WEST  ("U  S  WEST Financing"), issued $600 million of 7.96 % Trust Originated 
Preferred Securities (the "Preferred Securities") and $19 of common 
securities.    U  S WEST holds all of the outstanding common securities of U S 
WEST  Financing.    U S WEST Financing used the proceeds from such issuance to 
purchase from U S WEST Capital Funding, Inc., a wholly-owned subsidiary of U S 
WEST  ("Capital  Funding"),  $619  principal amount of Capital Funding's 7.96% 
Subordinated Deferrable Interest Notes due 2025 (the "Subordinated Debt 
Securities"),  the  obligations  under  which are guaranteed by U S WEST.  The 
sole assets of U S WEST Financing are and will be the Subordinated Debt 
Securities.   In addition, U S WEST has guaranteed the payment of interest and 
redemption  amounts to holders of Preferred Securities when U S WEST Financing 
has funds available for such payments as well as Capital Funding's undertaking 
to  pay all of U S WEST Financing's costs, expenses and other obligations. The 
interest and other payment dates on the Subordinated Debt Securities 
correspond to the distribution and other payment dates on the Preferred 
Securities.  Under certain circumstances, the Subordinated Debt Securities may 
be distributed to the holders of Preferred Securities and common securities in 
liquidation of U S WEST Financing.  The Subordinated Debt Securities are 
redeemable in whole or in part by Capital Funding at any time on or after 
September 11, 2000, at a redemption price of $25.00 per Subordinated Debt 
Security  plus  accrued  and  unpaid interest.  If Capital Funding redeems the 
Subordinated  Debt  Securities,  U  S WEST Financing is required to redeem the 
Preferred  Securities concurrently at $25.00 per share plus accrued and unpaid 
distributions.  As of September 30, 1995, 24,000,000 Preferred Securities were 
outstanding. 
 
E.  Airtouch Joint Venture 
 
Effective November 1, 1995, AirTouch and the Company have entered into Phase I 
of their joint venture.  In accordance with the closing agreement, during 
Phase I the Media Group Combined Financial Statements will continue to reflect 
the  Company's  existing  ownership  of the domestic cellular operations.  The 
newly  formed Wireless Management Company will provide centralized services to 
both  companies  on  a  contract basis.  In Phase II, AirTouch and the Company 
will  contribute  their domestic cellular assets to the newly formed venture.  
This  phase  will  occur  within four years, upon obtaining interim regulatory 
relief, or earlier, at AirTouch's option. 
 
 
<PAGE> 
 
Form 10-Q - Part I 
 
              NOTES TO COMBINED FINANCIAL STATEMENTS, continued 
                            (Dollars in millions) 
                                 (Unaudited) 
 
F. Investment in International Ventures 
 
The  Media  Group's  investments in international ventures increased $480 from 
December 31, 1994.  The increase primarily consists of a 20 percent investment 
in Malaysia to provide local wireline and wireless communications, the 
acquisition of a 50 percent interest in cable television systems in the 
Netherlands  and  the acquisition of a 29 percent interest in cable television 
systems in the Czech Republic. 
 
On  October  2,  1995, TeleWest Communications' acquisition and share exchange 
with  SBC CableComms (UK) became effective.  U S WEST and Tele-Communications, 
Inc., the major shareholders, will each own 26.7 percent of the combined 
company.   In fourth quarter 1995, the Media Group will recognize an after tax 
gain of approximately $100 in conjunction with the merger. 
 
G. Debt 
 
Subsequent to third quarter 1995, U S WEST refinanced $1.3 billion of 
commercial  paper,  to  take  advantage of favorable long-term interest rates, 
including $550 at the Media Group. 
 
H. Contingencies 
 
On  September 22, 1995, the Company filed a lawsuit in Delaware Chancery Court 
to  prevent  the  proposed merger of Time Warner and Turner Broadcasting.  The 
Time  Warner  Entertainment partnership is, among other things, in competition 
with Turner Broadcasting, and the Company believes that ownership of Turner by 
Time  Warner  would constitute breach of contract and fiduciary duties by Time 
Warner.    Time  Warner filed a countersuit against the Company on October 11, 
1995,  alleging  misrepresentation, breach of contract and other misconduct on 
the part of the Company.  Time Warner's countersuit seeks a reformation of the 
Time  Warner  Entertainment  partnership  agreement, an order that enjoins U S 
WEST  from  breaching  the partnership agreement, and unspecified compensatory 
damages.  U S WEST has denied each of the claims in Time Warner's countersuit. 
 A trial date of March 16,1996 has been set. 
 
I.  Net Investment in Assets Held for Sale 
 
Effective  January  1, 1995, the capital assets segment has been accounted for 
in  accordance with Staff Accounting Bulletin No. 93, issued by the Securities 
Exchange  Commission,  which  requires discontinued operations not disposed of 
within  one  year of the measurement date to be accounted for prospectively in 
continuing  operations  as  "net investment in assets held for sale."  The net 
realizable  value  of  the assets will be reevaluated on an ongoing basis with 
adjustments to the existing reserve, if any, being charged to continuing 
operations.    Prior to January 1, 1995, the entire capital assets segment was 
accounted for as discontinued operations in accordance with Accounting 
Principles Board Opinion No. 30. 
 
Sales  and  other  revenues of net investment in assets held for sale were $30 
and $64, and $137 and $443 for the three months and nine months ended 
September 30, 1995 and 1994, respectively.  Included are the sale of 
properties  for approximately $52 and $253 for the nine months ended September 
30, 1995 and 1994, respectively.  The sales were in line with Company 
estimates. 
 
The components of net investment in assets held for sale follow: 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                                                     <C>             <C> 
 
                                                        September 30,   December 31, 
Dollars in millions                                               1995           1994 
ASSETS 
Cash                                                    $           16  $           7 
Finance receivables - net                                        1,005          1,073 
Investment in real estate - net of valuation allowance             420            465 
Bonds, at market value                                             165            155 
Investment in FSA                                                  374            329 
Other assets                                                       198            362 
 
   Total assets                                                  2,178          2,391 
 
LIABILITIES 
Debt                                                               922          1,283 
Deferred income taxes                                              700            693 
Accounts payable, accrued liabilities and other                    128            103 
 Minority interests                                                 10             10 
 
Total liabilities                                                1,760          2,089 
 
 Net investment in assets held for sale                 $          418  $         302 
</TABLE> 
 
 
 
Selected financial data for U S WEST Financial Services follows: 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                 <C>             <C>             <C>             <C> 
 
                    Three           Three           Nine            Nine 
                    Mos. Ended      Mos. Ended      Mos. Ended      Mos. Ended 
                    September 30,   September 30,   September 30,   September 30, 
                              1995            1994            1995            1994 
Operating revenues  $            9  $           15  $           30  $           45 
 
</TABLE> 
 
 
 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                      <C>             <C> 
 
                         September 30,   December 31, 
                                   1995           1994 
Net finance receivables  $          911  $         981 
Total assets                      1,223          1,331 
Total debt                          419            533 
Total liabilities                 1,153          1,282 
Shareowner's equity                  70             49 
 
</TABLE> 
 
 
 
<PAGE> 
 
Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions) 
 
Results of Operations 
 
Net income of the Media Group declined by $13, or 25 percent, in third quarter 
1995  as compared with third quarter 1994, excluding expenses of $5 associated 
with  the Recapitalization Plan and an extraordinary loss of  $4 for the early 
retirement of debt by TWE.  The decline is due primarily to increased interest 
expense associated with the acquisition of cable systems in the Atlanta, 
Georgia metropolitan area (the "Atlanta Systems") and interest expense 
associated  with  expansion  in international investments, partially offset by 
improvement in the wireless communications business.  The amortization of 
goodwill associated with the Atlanta Systems acquisition also caused a 
significant increase in the effective tax rate which contributed to lower 
earnings.  EBITDA increased by approximately 30 percent, to $207, due 
primarily to improvement in the wireless communication business and the 
acquisition of the Atlanta Systems.  Excluding the effects of the acquisition, 
EBITDA increased by approximately 14 percent. 
 
Net  income  of  the  Media Group declined by $47, or 38 percent, for the nine 
months  ended  September 30, 1995 as compared with 1994, excluding the effects 
of  the  1994 gain on sale of paging assets of $41 and the 1995 expenses of $5 
associated  with  the  Recapitalization Plan and the extraordinary loss of  $4 
for the early retirement of debt by TWE.  The decline is due primarily to 
increased  interest  expense  associated with the Atlanta Systems acquisition, 
expansion  in  international  investments  and higher equity losses related to 
international growth initiatives, partially offset by improvement in the 
wireless  communications  business.  The amortization of intangible assets and 
goodwill  associated with the Atlanta Systems acquisition caused a significant 
increase  in  the  effective  tax rate and also contributed to the decrease in 
earnings. 
 
EBITDA increased by approximately 29 percent, to $552, due primarily to 
improvement  in the wireless communication business and the acquisition of the 
Atlanta Systems.  Excluding the effects of the acquisition and the paging 
sale, EBITDA increased by approximately 15 percent.  The Media Group considers 
EBITDA  an  important indicator of the operational strength and performance of 
its  businesses.   EBITDA, however, should not be considered as an alternative 
to  operating  or  net  income as an indicator of the performance of the Media 
Group's businesses or as an alternative to cash flows from operating 
activities  as  a  measure of liquidity, in each case determined in accordance 
with GAAP. 
 
<PAGE> 
 
 Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions), continued 
 
Following is a summary of income before extraordinary item by industry segment 
and for significant unconsolidated, equity investments: 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                                  <C>        <C>          <C>            <C>       <C>          <C>          <C> 
 
                                                Three        Three; Mos.              Nine         Nine 
                                                Mos.         Ended                    Mos.         Mos. 
                                                Ended        Sept. 30,                Ended        Enced 
                                     Percent    Sept. 30,            1994   Percent   Sept. 30,    Sept. 30,    Percent 
                                     Ownership        1995                  Change          1995      1994 (3)  Change 
Consolidated 
  Multimedia content and 
     services                              100  $       63   $         63         -   $      179   $      190      (5.8) 
  Wireless communications                  100          24             11         -           56           62      (9.7) 
  Cable and 
     telecommunications                    100          (1)             -         -           (7)           -         -  
Unconsolidated equity investments: 
  Time Warner Entertainment 
     Company, L.P. (1)                    25.5          (3)            (2)    (50.0)         (16)         (13)    (23.1) 
  TeleWest Communications                 37.8         (11)           (10)    (10.0)         (23)         (24)      4.2  
     plc 
  Mercury One-2-One                       50.0         (18)           (16)    (12.5)         (57)         (40)    (42.5) 
Other (2)                                              (21)             5         -          (59)          (9)        -  
Income before extraordinary 
    item                                        $       33   $         51     (35.3)  $       73   $      166     (56.0) 
 
<FN> 
 
<F1> 
(1)  Percent ownership represents pro rata priority capital and residual equity interests. 
<F2> 
(2)  Includes other unconsolidated equity investments and divisional expenses. 
<F3> 
(3) Wireless communications includes the $41 gain on sale of paging assets. 
</FN> 
</TABLE> 
 
 
 
Multimedia Content and Services. Income related to Yellow Pages directory 
advertising increased by approximately 7 percent and 8 percent in third 
quarter and the nine months ended September 30, 1995 as compared with 1994, to 
$75 and $225, respectively.  The increase is due to pricing, product 
enhancements and the effect of improved marketing programs on business volume. 
However, Yellow Pages income growth was offset by losses related to 
international directory publishing operations and the effect of increased 
expenditures  related  to new products and other growth initiatives, including 
development of interactive services. 
 
Second  quarter  1995 includes an after tax charge of approximately $9 related 
to the exit of certain product lines.  This charge is part of the Media 
Group's ongoing efforts to evaluate each product for financial and market 
feasibility.  The Media Group views new service offerings as an important part 
of its growth strategy.  Accordingly, the Media Group anticipates that 
investments in new products and services in 1995 will continue to offset 
expected income growth related to the Yellow Pages business. 
 
<PAGE> 
 
 Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions), continued 
 
Wireless  Communication.  Wireless communications income increased $13 and $35 
in  third quarter and for the nine months ended September 30, 1995 as compared 
with 1994, excluding the 1994 gain on sale of paging assets of $41.  The 
increase in wireless communications income is attributable to continued strong 
growth in cellular subscribers.  The domestic cellular subscriber base reached 
1,269,000 at September 30,  1995, a 55 percent increase as compared with 
September  30,  1994.    Cellular service EBITDA approximated $85 and $217 for 
third  quarter and the nine months ended September 30, 1995, increases of  $28 
and $79, or 49 percent and 58 percent, respectively, compared to 1994.  
Cellular service revenue growth, in addition to economies of scale and expense 
controls,  resulted  in a third quarter 1995 cellular service EBITDA margin of 
38.0  percent compared to 33.8  percent in 1994 and EBITDA margin for the nine 
months  ended  September 30, 1995 was 35.3 percent compared to 30.4 percent in 
1994. 
 
Effective November 1, 1995, AirTouch and the Company have entered into Phase I 
of their joint venture.  In accordance with the closing agreement, during 
Phase I the Media Group Combined Financial Statements will continue to reflect 
the  Company's  existing  ownership  of the domestic cellular operations.  The 
newly  formed Wireless Management Company will provide centralized services to 
both  companies  on  a  contract basis.  In Phase II, AirTouch and the Company 
will  contribute  their domestic cellular assets to the newly formed venture.  
This  phase  will  occur  within four years, upon obtaining interim regulatory 
relief, or earlier, at AirTouch's option. 
 
Cable  and  Telecommunication.   The 1995 loss in cable and telecommunications 
operations  is  the result of amortization of intangible assets related to the 
December 1994 acquisition of the Atlanta Systems.  The Atlanta Systems 
contributed  EBITDA of approximately $26 and $74 in third quarter and the nine 
months  ended  September  30,  1995, respectively.  The subscriber base of the 
Atlanta Systems increased 7.5 percent during the last twelve months, to 
517,000 at September 30, 1995. 
 
Operating Results of Unconsolidated Equity Investments.  The loss before 
extraordinary  item related to the Media Group's interests in TWE increased in 
third  quarter  and  the nine months ended September 30, 1995 compared to 1994 
due  primarily  to  higher  TWE financing costs, minority interest expense and 
depreciation  charges,  partially offset by increased EBITDA related to cable, 
programming and filmed entertainment.  Cable subscribers served by TWE 
increased  by  6 percent compared to a year ago excluding the impact of recent 
cable transactions. 
 
<PAGE> 
 
 Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions), continued 
 
On  September 22, 1995, the Company filed a lawsuit in Delaware Chancery Court 
to  prevent  the  proposed merger of Time Warner and Turner Broadcasting.  The 
Time  Warner  Entertainment partnership is, among other things, in competition 
with Turner Broadcasting, and the Company believes that ownership of Turner by 
Time  Warner  would constitute breach of contract and fiduciary duties by Time 
Warner.    Time  Warner filed a countersuit against the Company on October 11, 
1995,  alleging  misrepresentation, breach of contract and other misconduct on 
the part of the Company.  Time Warner's countersuit seeks a reformation of the 
Time  Warner  Entertainment  partnership  agreement, an order that enjoins U S 
WEST  from  breaching  the partnership agreement, and unspecified compensatory 
damages.  U S WEST has denied each of the claims in Time Warner's countersuit. 
A trial date of March 16,1996 has been set. 
 
International  businesses  are experiencing rapid growth, and will continue to 
incur near term start-up losses.  New investments in 1995 include a 20 percent 
investment  in Malaysia to provide local wireline and wireless communications, 
the  acquisition  of  a 50 percent interest in cable television systems in the 
Netherlands  and  the acquisition of a 29 percent interest in cable television 
systems in the Czech Republic. 
 
On  October  2,  1995, TeleWest Communications' acquisition and share exchange 
with  SBC CableComms (UK) became effective.  U S WEST and Tele-Communications, 
Inc., the major shareholders, will each own 26.7 percent of the combined 
company.   In fourth quarter 1995, the Media Group will recognize an after tax 
gain  of  approximately  $100  in conjunction with the merger.  The new entity 
will be the largest cable television and cable telephony operator in the 
United Kingdom. 
 
Subscribers  to U S WEST's international cable joint venture operations in the 
United  Kingdom,  Norway,  Sweden  and Hungary grew to 854,000, a 12.8 percent 
increase from a year ago.  Including the recent acquisitions in the Czech 
Republic  and Netherlands, international cable subscribers total approximately 
1,720,000 at September 30, 1995. 
 
Subscribers  to  U S WEST's international wireless joint venture operations in 
the  United  Kingdom, Hungary, the Czech Republic, Slovakia and Russia grew to 
579,000  at September 30, 1995, which is more than two times the customer base 
at September 30, 1994.  Mercury One 2 One ("One 2 One") added 135,000 
customers during the nine months ended September 30, 1995, a 65.9 percent 
increase since December 31, 1994. One 2 One served 340,000 customers at 
September 30, 1995, compared with 139,000 customers at September 30, 1994. 
 
<PAGE> 
 
Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions), continued 
 
 Sales and Other Revenues 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                                <C>         <C>         <C>       <C>         <C>         <C> 
 
                                       3 Mos.      3 Mos.                9 Mos.      9 Mos. 
                                   Ended       Ended                 Ended       Ended 
                                   Sept. 30,   Sept. 30,   Percent   Sept. 30,   Sept. 30,   Percent 
                                         1995        1994  Change          1995        1994  Change 
 
Multimedia content and services: 
    Domestic                       $      264  $      246      7.3   $      784  $      732      7.1  
    International                          28          31     (9.7)          72          42     71.4  
 
                                          292         277      5.4          856         774     10.6  
 
Wireless communications: 
    Cellular service                      223         168     32.7          616         454     35.7  
    Cellular equipment                     23          30    (23.3)          60          81    (25.9) 
    Paging sales & service (1)              -           -        -            -          28        -  
 
                                          246         198     24.2          676         563     20.1  
 
Cable and telecommunications               56           -        -          165           -        -  
Other                                      10           7     42.9           28          22     27.3  
 
Sales and other revenues           $      604  $      482     25.3   $    1,725  $    1,359     26.9  
 
<FN> 
 
____________________ 
(1)  The paging business was sold in June 1994.  Results reflect operations for the six months 
ending 
June 30, 1994. 
</FN> 
</TABLE> 
 
 
Multimedia  Content  and Services.  Revenues related to Yellow Pages directory 
advertising increased approximately $17, or 7.3 percent, and $50, or 7.1 
percent, in third quarter and the nine months ended September 30, 1995, 
respectively,  as compared with 1994, due to pricing and an increase in Yellow 
Pages  advertising  volume.    Product enhancements and the effect of improved 
marketing programs on business volume also contributed to the increase in 
revenues.   Excluding the sale of certain non-strategic operations, non-Yellow 
Pages  revenues  increased  by  $4 and $8 in third quarter and the nine months 
ended September 30, 1995, respectively, as compared with 1994. 
 
International  directory  publishing  revenue decreased by $3 in third quarter 
1995 as compared with 1994, primarily due to a delay in publication of certain 
directories.    Revenue for the nine months ended September 30, 1995 increased 
by $30 compared to 1994 due to the May 1994 purchase of Thomson Directories. 
 
 Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions), continued 
 
Wireless  Communications.    Cellular  service revenues increased $55, or 32.7 
percent, and $162, or 35.7 percent, in third quarter and the nine months ended 
September  30, 1995, respectively, as compared with 1994. This increase is due 
to a 55 percent increase in subscribers during the last twelve months, 
partially  offset  by  a  13 percent drop in average revenue per subscriber to 
$62.00 per month for the nine months ended September 30, 1995 as compared with 
1994.    The increase in subscribers relates to lower costs for cellular phone 
equipment  and  enhanced  service  offerings, which has resulted in additional 
penetration  into  the  consumer user market.  The decrease in average revenue 
per subscriber is due to continuing competitive pressures and price 
sensitivity of non-business users. 
 
Cellular equipment revenues decreased by $7, or 23.3 percent, and $21, or 25.9 
percent, in third quarter and the nine months ended September 30, 1995, 
respectively, as compared with 1994.  This decrease is primarily due to a 
decrease in unit sales and price per unit due to the impacts of competition. 
 
Cable  and Telecommunications.  Domestic cable and telecommunications revenues 
reflect the December 1994 acquisition of the Atlanta Systems. 
 
Cost of Sales and Other Revenues 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                                     <C>         <C>         <C>       <C>         <C>         <C> 
 
                                        Three       Three                 Nine        Nine 
                                        Mos.        Mos.                  Mos.        Mos. 
                                        Ended       Ended                 Ended       Ended 
                                        Sept. 30,   Sept. 30,   Percent   Sept. 30,   Sept. 30,   Percent 
                                              1995        1994  Change          1995        1994  Change 
 
Multimedia content and services: 
    Domestic                            $       99  $       86     15.1   $      285  $      254     12.2  
    International                               20          21     (4.8)          50          29     72.4  
 
                                               119         107     11.2          335         283     18.4  
 
Wireless communications: 
    Cost of cellular service                    30          24     25.0           91          63     44.4  
    Cost of cellular equipment                  29          30     (3.3)          71          81    (12.3) 
    Cost of paging sales & service (1)           -           -        -            -           6        -  
 
                                                59          54      9.3          162         150      8.0  
 
Cable and telecommunications                    15           -        -           42           -        -  
 
Costs of sales and other revenues       $      193  $      161     19.9   $      539  $      433     24.5  
 
<FN> 
 
____________________ 
(1)  The paging business was sold in June 1994.  Results reflect operations for six months ending 
June 30, 
1994. 
</FN> 
</TABLE> 
 
 
 
<PAGE> 
 
Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions), continued 
 
Multimedia Content and Services.  Cost of sales related to domestic publishing 
operations increased primarily due to product enhancements and increased 
printing and delivery costs associated with growth in the Yellow Pages 
directory business.  The decrease in third quarter 1995 cost of sales for 
international directory publishing operations as compared with 1994 is 
primarily  due to a delay in publication of certain directories.  The increase 
in  cost  of  sales in the nine months ended September 30, 1995 is a result of 
the 1994 acquisition of Thomson Directories. 
 
Wireless Communications. Network maintenance expenses increased by $2 in third 
quarter  1995  as compared with 1994 due primarily to additional network usage 
and  expansion  of the wireless network.  Billing and other expenses increased 
by $4, due primarily to a larger average customer base. 
 
Land-line telecommunications and network maintenance expenses increased by $11 
for the nine months ended September 30, 1995 as compared with 1994 due 
primarily  to additional network usage and expansion of the wireless network.  
Billing  expenses increased by $10, due primarily to a larger average customer 
base.    Costs associated with fraudulent activity and roaming costs increased 
by $7. 
 
During 1995, the cellular equipment margin has declined as a result of 
increased equipment concessions associated with the direct marketing channel.  
The  cellular  equipment margin is expected to continue to decline as a result 
of this change in distribution mix. 
 
Cable  and Telecommunications.  Cable and telecommunications costs reflect the 
December 1994 acquisition of the Atlanta Systems. 
 
Selling, General and Administrative Expenses 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                                <C>         <C>         <C>      <C>         <C>         <C> 
 
                                   Three       Three                Nine        Nine 
                                   Months      Months               Months      Months 
                                   Ended       Ended                Ended       Ended 
                                   Sept. 30,   Sept. 30,   Percent  Sept. 30,   Sept. 30,   Percent 
                                         1995        1994  Change         1995        1994  Change 
 
Multimedia content and services: 
    Domestic                       $       57  $       53      7.5  $      182  $      161     13.0 
    International                           7           3        -          22           8        - 
 
                                           64          56     14.3         204         169     20.7 
 
Wireless communications (1)               102          87     17.2         297         264     12.5 
Cable and telecommunications               16           -        -          50           -        - 
Other                                      22          19     15.8          83          65     27.7 
                                   $      204  $      162     25.9  $      634  $      498     27.3 
 
<FN> 
 
___________________ 
(1)  The paging business was sold in June 1994.  Results reflect operations for six months ending 
June 30, 1994. 
</FN> 
</TABLE> 
 
 
 
<PAGE> 
 
Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions), continued 
 
Multimedia Content and Services.  In domestic operations, costs related to the 
development of new database marketing and interactive services increased by $5 
in  third quarter 1995 as compared with 1994.  Partially offsetting these cost 
increases was the effect of the sale of certain non-strategic operations. 
 
In domestic operations, costs related to the development of new database 
marketing  and  interactive services increased by $15 in the nine months ended 
September  30,  1995 as compared with 1994.  Additionally, a charge of $14 was 
incurred  to  recognize  costs associated with exiting certain product lines.  
Other  selling, general and administrative expenses decreased by $8, primarily 
related to the effect of the sale of certain non-strategic operations. 
 
The increase in selling, general and administrative expenses related to 
international directory publishing operations in third quarter 1995 as 
compared with 1994 is due to a reclassification and increased marketing, 
salary and wage expenses. The increase for the nine months ended September 30, 
1995  as  compared  with  1994 is primarily due to the May 1994 acquisition of 
Thomson Directories. 
 
Wireless Communications. Selling, general and administrative expenses 
increased by $15, or 17.2 percent, in third quarter 1995 as compared with 
1994.    Commissions paid to retailers increased by $10, primarily as a result 
of  a 39 percent increase in gross customer additions.  Other selling, general 
and administrative expenses increased by $5, primarily due to increased 
advertising expenditures and bad debts. 
 
Excluding  the  effects  of  the sale of the paging business in 1994, selling, 
general  and administrative expenses increased by $44, or 17.5 percent, in the 
nine  months ended September 30, 1995 as compared with 1994.  Commissions paid 
to  retailers increased by $33, primarily as a result of a 47 percent increase 
in gross customer additions.  Other selling, general and administrative 
expenses increased by $11, primarily due to increased advertising expenditures 
and bad debts. 
 
Cable  and Telecommunications.  Cable and telecommunications costs reflect the 
December 1994 acquisition of the Atlanta Systems. 
 
Other.   The increase in these other selling, general and administrative 
expenses  is primarily attributable to additional resources being allocated to 
accommodate growth in domestic and international operations. 
 
<PAGE> 
 
Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions), continued 
 
Depreciation and Amortization 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                               <C>         <C>         <C>      <C>         <C>         <C> 
 
                                  Three       Three                Nine        Nine 
                                  Months      Months               Months      Months 
                                  Ended       Ended                Ended       Ended 
                                  Sept. 30,   Sept. 30,   Percent  Sept. 30,   Sept. 30,   Percent 
                                        1995        1994  Change         1995        1994  Change 
 
Multimedia content and services   $        8  $        7     14.3  $       26  $       18     44.4 
Wireless communications (1)               29          24     20.8          86          74     16.2 
Cable and telecommunications              19           -        -          59           -        - 
Other                                      4           2    100.0          10           7     42.9 
                                  $       60  $       33     81.8  $      181  $       99     82.8 
 
<FN> 
 
____________________ 
(1)  The paging business was sold in June 1994.  Results reflect operations for six months ending 
June 30, 1994. 
</FN> 
</TABLE> 
 
 
Depreciation  and amortization related to wireless operations increased by $17 
in  the  nine months ended September 30, 1995 as compared with 1994, excluding 
the  effects  of  the sale of the paging business in 1994.  Multimedia content 
and  services  depreciation  and amortization increased principally due to the 
effects of the May 1994 acquisition of Thomson Directories.  Cable and 
telecommunications  depreciation  and  amortization  reflect the December 1994 
acquisition of the Atlanta Systems. 
 
Interest Expense and Other 
 
Interest expense increased by $19 and $43 in third quarter and the nine months 
ended  September  30, 1995, respectively, as compared with 1994.  The increase 
in interest expense is primarily a result of incremental financing costs 
associated with the December 1994 acquisition of the Atlanta Systems, new 
international  investments  and a reclassification of debt from net investment 
in assets held for sale. 
 
Equity  losses  increased  by $12 and $45 in third quarter and the nine months 
ended  September 30, 1995, respectively, as compared with 1994.  The increases 
were  primarily  due to costs related to the expansion of the customer base at 
One 2 One in the nine months ended September 30, 1995, as compared with 1994. 
 
 Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions), continued 
 
Provision for Income Taxes 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                         <C>         <C>         <C>      <C>         <C>         <C> 
 
                            Three       Three                Nine        Nine 
                            Months      Months               Mos.        Mos. 
                            Ended       Ended                Ended       Ended 
                            Sept. 30,   Sept. 30,   Percent  Sept. 30,   Sept. 30,   Percent 
                                  1995        1994  Change         1995        1994  Change 
 
Provision for income taxes  $       51  $       41     24.4  $      103  $      134    (23.1) 
Effective tax rate                60.7        44.6        -        58.5        44.7        -  
 
</TABLE> 
 
 
The  increase  in  the  effective tax rate reflects the impact of lower pretax 
income, the effects of goodwill amortization related to the acquisition of the 
Atlanta  Systems, a benefit recorded in 1994 related to the sale of the paging 
assets, higher state and foreign income taxes and expenses associated with the 
Recapitalization Plan. 
 
Liquidity and Capital Resources 
 
Operating Activities 
 
During  the  nine  months ended September 30, 1995, cash provided by operating 
activities  of  the  Media Group increased by $83 as compared with 1994.  Cash 
provided  by operating activities for the nine months ended September 30, 1995 
includes an income tax payment of approximately $60 related to the 1994 
partial sale of the Media Group's joint venture interest in TeleWest.  
Adjusted  for  the  income tax payment, operating cash flow of the Media Group 
increased  by $143.  Growth in operating cash flow from wireless communication 
services  and  the acquisition of the Atlanta Cable systems contributed to the 
increase. 
 
Investing Activities 
 
Total  capital  expenditures  of the Media Group were $240 for the nine months 
ended September 30, 1995 as compared with $199 for the nine months ended 
September 30, 1995 of 1994, the majority of which were devoted to the 
enhancement and expansion of the cellular network. 
 
Investments in international ventures were $576 for the nine months ended 
September  30,  1995  as  compared with $214 for 1994.  Significant 1995 Media 
Group  investing  activities include equity investments in Malaysia to provide 
local wireline and wireless communications, the acquisitions of cable 
television systems in the Netherlands and Czech Republic and additional 
capital contributions to One 2 One in the U.K. 
 
In March 1995,  PCS PrimeCo was awarded PCS licenses in 11 markets.  The Media 
Group's  share of the cost of the licenses was approximately $268 all of which 
was funded by June 30, 1995.  Under the PCS PrimeCo partnership agreement, the 
Company  is required to fund 25 percent of PCS PrimeCo's operating and capital 
costs, including licensing costs.  The Company anticipates that its total 
funding obligations to PCS PrimeCo during the next four years will be 
significant. 
 
<PAGE> 
 
 Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions), continued 
 
Cash  provided  to  the net investment in assets held for sale of $108 for the 
nine months ended September 30, 1995 primarily reflects the payment of debt. 
 
At September 30, 1995, the Company guaranteed debt associated with its 
international investments in the principal amount of approximately $165. 
 
Financing Activities 
 
Debt  increased  by $132 due to new international investments, cash funding of 
the  PCS licenses and a reclassification of debt from net investment in assets 
held for sale.  These increases were largely offset by reductions of debt 
related to the investment in TWE and a  reduction of commercial paper by 
issuing  Preferred  Securities.    The Company issued $600 of Trust Originated 
Preferred  Securities  (the "Preferred Securities") in third quarter 1995. U S 
WEST has fully and unconditionally guaranteed the payment of interest and 
redemption amounts to holders of the Preferred Securities.  The Preferred 
Securities  are  redeemable  in whole or in part by U S WEST at any time on or 
after September 11, 2000, at a redemption price of $25.00 per Preferred 
Security. As of September 30, 1995, 24,000,000 Preferred Securities were 
outstanding. 
 
Excluding  debt  included in net investment in assets held for sale, the Media 
Group's  percentage  of  debt to total capital at September 30, 1995, was 27.5 
percent compared to 30.1 percent at December 31, 1994.  Including debt related 
to  net  investment  in  assets held for sale, the Media Group's percentage of 
debt  to  total  capital  was 35.8 and 42.4 percent at September 30, 1995, and 
December  31, 1994, respectively.  The percentage of debt to total capital has 
decreased  at September 30, 1995, as compared with December 31, 1994 primarily 
as a result of issuing the Preferred Securities which are included as a 
component of total capital. 
 
The  Media  Group  reinvests  earnings, if any, for future growth and does not 
expect to pay dividends on the Media Stock in the foreseeable future. 
 
The Media group expects that cash from operations will not be adequate to fund 
expected  cash  requirements  in the foreseeable future.  Additional financing 
will primarily come from a combination of new debt and equity.  The Media 
Group will also continue to employ strategic alliances in executing its 
business strategies. 
 
The Media Group from time to time engages in discussions regarding 
acquisitions.    The  Company  may fund any such acquisitions, if consummated, 
with internally generated funds, debt or equity.  The incurrence of 
indebtedness  to  fund such acquisitions and/or the assumption of indebtedness 
in connection with such acquisitions could result in a downgrading of the 
Company's credit rating. 
 
During  the  nine  months ended September 30, 1995, the Media Group received a 
$105 transfer of equity from the Communications Group. 
 
<PAGE> 
 
Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions), continued 
 
Union Contract 
 
On October 15, 1995, U S WEST Direct and the CWA reached a tentative agreement 
on their contract, subject to ratification by the CWA membership.  This 
contract  would  provide for salary increases of 10.5 percent over three years 
and provides employees with a lump sum payment of $850. 
 
Regulatory 
 
On October 11, 1995, the U.S. Justice Department recommended that U S WEST be 
allowed to offer long-distance telephone service outside its 14-state region.  
The agreement, among U S WEST, the Justice Department and AT&T, must be 
approved by U.S. District Court Judge Harold Greene, who oversees the consent 
decree that broke up AT&T in 1984, and barred the Regional Holding Companies 
from a number of businesses, including interLATA long distance. 
 
If approved by Judge Greene, U S WEST will be able to offer long-distance 
service outside U S WEST's local service territory.  Such an approval would 
mean that U S WEST would be the first Regional Holding Company allowed to 
offer interLATA long-distance service outside its region. 
 
Selected Proportionate Data 
 
The following table is not required by GAAP or intended to replace the 
Combined Financial Statements prepared in accordance with GAAP.  It is 
presented  supplementally because the Company believes that proportionate data 
facilitates the understanding and assessment of its Combined Financial 
Statements.  The following table includes allocations of Media Group corporate 
activity.    The  table  does not reflect financial data of the capital assets 
segment, which had net assets of $418 at September 30, 1995 and $302 at 
December 31, 1994. The financial information included below departs materially 
from  GAAP because it aggregates the revenues and operating income of entities 
not controlled by the Media Group with those of the consolidated operations of 
the Media group. 
 
<PAGE> 
 
Form 10-Q - Part I 
 
Item 2.  Management's Discussion and Analysis of Financial Condition and 
Results of Operations (Dollars in millions), continued 
 
Selected Proportionate Data, continued 
<TABLE> 
 
<CAPTION> 
 
 
 
<S>                      <C>           <C>                    <C>         <C>              <C>          <C>              <C> 
 
                         Cable &       Cable &                Wireless    Wireless         Multimedia   Multimedia 
                         Telecommu-    Telecommu-nications    Commu-      Commu-           Content &    
Content & 
                         nications     International          nications   nications        Services     Services 
Dollars in millions      Domestic                        (3)  Domestic    International    Domestic     
International    Total 
                                  (1)                                                 (3) 
THREE MONTHS ENDED 
SEPTEMBER 30, 1995 
Revenue                  $       655   $                 32   $      223  $           75   $       267  $           28   $1,280 
Operating income (loss)           59                    (21)          50             (16)          104              (6)     170 
Net income (loss)                (14)                   (23)          23             (16)           65              (6)      29 
 
EBITDA (2)               $       162   $                (10)  $       77  $            -   $       111  $           (3)  $  337 
Subscribers (thousands)        2,825                    599        1,162             271   NA           NA                
4,857 
 
THREE MONTHS ENDED 
SEPTEMBER 30, 1994 
Revenue                  $       566   $                 21   $      166  $           52   $       248  $           31   $1,084 
Operating income (loss)           41                    (23)          29             (28)          102               4      125 
Net income (loss)                 (1)                   (14)          15             (12)           63               -       51 
 
EBITDA (2)               $       123   $                (13)  $       48  $          (15)  $       108  $            7   $  
258 
Subscribers (thousands)        2,349                    232          694             124   NA           NA                
3,399 
 
NINE MONTHS ENDED 
SEPTEMBER 30, 1995 
Revenue                  $     1,906   $                 82   $      584  $          200   $       791  $           72   
$3,635 
Operating income (loss)          136                    (64)         112             (62)          302             (15)     
409 
Net income (loss)                (46)                   (36)          54             (76)          184             (11)      69 
 
EBITDA (2)               $       440   $                (34)  $      189  $          (25)  $       322  $           (7)  $  
885 
 
NINE MONTHS ENDED 
SEPTEMBER 30, 1994 
Revenue                  $     1,589   $                 64   $      479  $          121   $       738  $           42   
$3,033 
Operating income (loss)          110                    (58)          65             (68)          300               1      350 
Net income (loss)                (15)                   (32)          69             (47)          193              (2)     166 
 
EBITDA (2)               $       343   $                (33)  $      125  $          (38)  $       318  $            5   $  
720 
 
<FN> 
 
<F1> 
(1)   The proportionate results are based on the Media Group's 25.51 percent pro rata priority and 
residual equity interests in 
reported  TWE  results.  The reported TWE results are prepared in accordance with GAAP and 
have not been adjusted to report TWE 
investments accounted for under the equity method on a proportionate basis. 
<F2> 
(2)    Proportionate EBITDA represents the Media Group's equity interest in the entities multiplied 
by the entity's EBITDA.  As 
such, proportionate EBITDA does not represent cash available to the Media Group.  The Media 
Group considers EBITDA an important 
indicator of the operational strength and performance of its businesses.  EBITDA, however, should 
not be considered as an 
alternative  to operating or net income as an indicator of the performance of the Media Group's 
businesses or as an alternative 
to cash flows from operating activities as a measure of liquidity, in each case determined in 
accordance with GAAP. 
<F3> 
(3)  Previously reported amounts have been reclassified to conform with the current presentation. 
</FN> 
</TABLE> 
 
 
 
<PAGE> 
 
 Form 10-Q - Part II 
 
                         PART II - OTHER INFORMATION 
 
Item 1.  Legal Proceedings 
 
On  September 22, 1995, the Company filed a lawsuit in Delaware Chancery Court 
to  prevent  the  proposed merger of Time Warner and Turner Broadcasting.  The 
Time  Warner  Entertainment partnership is, among other things, in competition 
with Turner Broadcasting, and the Company believes that ownership of Turner by 
Time  Warner  would constitute breach of contract and fiduciary duties by Time 
Warner.    Time  Warner filed a countersuit against the Company on October 11, 
1995,  alleging  misrepresentation, breach of contract and other misconduct on 
the part of the Company.  Time Warner's countersuit seeks a reformation of the 
Time  Warner  Entertainment  partnership  agreement, an order that enjoins U S 
WEST  from  breaching  the partnership agreement, and unspecified compensatory 
damages.  U S WEST has denied each of the claims in Time Warner's countersuit. 
A trial date of March 16,1996 has been set. 
 
 
Item 6.  Exhibits and Reports on Form 8-K 
 
(a)  Exhibits 
 
  11  Statement regarding computation of earnings per share of U S WEST, Inc. 
 
12  Statement regarding computation of earnings to fixed charges ratio of U S 
   WEST, Inc. 
 
 (b)  Reports on Form 8-K filed during the third quarter 
 
(i)  Form 8-K/A report dated July 12, 1995, to Form 8-K filed May 23, 1995, 
concerning the consolidated financial statements of Time Warner Entertainment 
Company, L.P. for the years ended December 31, 1994, 1993 and 1992 and for the 
three month periods ended March 31, 1995 and 1994; the financial statements of 
Mercury One 2 One for the year ended March 31, 1995; the combined financial 
statements of Georgia Cable Holdings and subsidiary partnerships for the years 
ended December 31, 1993 and 1992; and the consolidated financial statements of 
Wometco Cable Corp. and subsidiaries for the years ended December 31, 1993 and 
1992; 
 
(ii)  report dated July 28, 1995, concerning the release of earnings for the 
second quarter ended June 30, 1995, and related exhibits; 
 
(iii)  Form 8-K/A report dated August 24, 1995, to Form 8-K filed May 23, 
1995, concerning the consolidated financial statements of Time Warner 
Entertainment Company, L.P. for the years ended December 31, 1994, 1993 and 
1992 and for the three month periods ended March 31, 1995 and 1994; the 
financial statements of Mercury One 2 One for the year ended March 31, 1995; 
the combined financial statements of Georgia Cable Holdings and subsidiary 
partnerships for the years ended December 31, 1993 and 1992; and the 
consolidated financial statements of Wometco Cable Corp. and subsidiaries for 
the years ended December 31, 1993 and 1992; 
 
(iv)  report dated September 22, 1995, concerning U S WEST's announcement 
entitled "U S WEST Files to Stop Time Warner-Turner Merger"; and 
 
(v)  report dated September 28, 1995, concerning U S WEST's proposal to 
reincorporate in Delaware and create two classes of common stock that are 
intended to reflect separately the performance of U S WEST's communications 
and multimedia businesses, including the Proxy Statement and Prospectus mailed 
to shareholders of U S WEST in connection with the Special Meeting of 
Shareholders held October 31, 1995. 
 
 
<PAGE> 
 
 
                                  SIGNATURES 
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the 
registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized. 
 
     U S WEST, Inc. 
 
 
     By:  /S/  James T. Anderson 
     James T. Anderson 
     Acting Executive Vice President 
       and Chief Financial Officer 
 
November 13, 1995