Anschutz Company and Subsidiaries - Page 13

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          US West Grants to Gallup; and (9) MFS Anaheim.  The third-party             
          customer contracts for these nine conduit installation projects             
          constitute long-term contracts as defined by section 460(f).                
                    2.   IRU Projects                                                 
               By November 1995, Qwest was in negotiations with WorldCom              
          Network Services, Inc. (WorldCom), for rights to use a limited              
          number of fibers in fiberoptic cable installed along particular             
          routes.  On February 26, 1996, Qwest granted WorldCom an IRU in             
          24 dark fibers over three routes:  (1) WorldCom Dallas-Houston;             
          (2) WorldCom Denver-El Paso; and (3) WorldCom Santa Clara-SLC.              
          Pursuant to the IRU agreement, Qwest pulled fiber for the three             
          IRU projects, as described above.                                           
               In addition to pulling fiber for WorldCom, Qwest also pulled           
          fiber for its own potential future use or sale.  Instead of                 
          pulling 24-fiber fiberoptic cables, Qwest pulled cables with a              
          larger number of fibers.  While WorldCom had an IRU in 24 of the            
          fibers, Qwest retained control over the remaining fibers in the             
          same cable.                                                                 
               The IRU agreement constitutes a long-term contract as                  
          defined by section 460(f).  For tax purposes, Qwest’s granting of           
          the IRUs to WorldCom was treated as a sale of those fibers.  The            
          total contract price for the IRU agreement was $65,196,466.                 









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