SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 24, 2001
QWEST COMMUNICATIONS INTERNATIONAL INC.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
000-22609 84-1339282
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(Commission File Number) (IRS Employer Identification No.)
1801 California Street Denver, Colorado 80202
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 303-992-1400
Not applicable
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(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS
On January 24, 2001, Qwest Communications International Inc. ("Qwest") reported
its financial results for the fourth quarter of 2000 and for the full year 2000.
A copy of the press release announcing the same is attached as Exhibit 99.1 to
this Current Report on Form 8-K.
On January 24, 2001, Qwest also hosted a conference call with media, analysts,
investors, and other interested persons during which it discussed, among other
things, its business and operations, its announced financial results and its
expected financial results for future periods. As previously announced, the
webcast of the call (live and replay) is accessible on Qwest's website.
On the call Qwest announced the following (all numbers are approximate):
o Where applicable, information had been presented on a pro forma normalized
basis to exclude the revenue from Qwest's divested interLATA business in
its local service area, revenue from Qwest's completed network
construction business and charges from merger related and other one-time
items.
o It expected that revenue would grow between 11.5% and 12.5% for the 1st
quarter of 2001 over the 1st quarter of 2000. It expected higher growth
rates in the subsequent quarters.
o It was comfortable with its previously announced guidance for 2001 for
revenues of $21.3 billion to $21.7 billion (a 12.5% to 14.5% increase over
2000) and EBITDA (earnings before interest, taxes, depreciation and
amortization) of $8.5 billion to $8.7 billion (a 14.9% to 17.6% increase
over 2000).
o It was on track to meet previously announced targets of 15% to 17% CAGR
(compounded annual growth rate) for revenue and almost 20% CAGR for EBITDA
from 2000 to 2005.
o Internet and data revenue, which grew almost 40% (for the 4th quarter of
2000 over the 4th quarter of 1999) on a pro forma normalized basis,
constituted more than 23% of total revenues for the 4th quarter of 2000.
It was confident it would meet or exceed the previously announced plan to
reach 44% of total revenue in 2005.
o It expects to double its targets for DSL and wireless customers by the end
of 2001 to 500,000 and 1.6 million customers, respectively.
o The number of wireless customers at December 31, 2000 does not include
customers in a pilot "win back" program, implemented in December 2000 for
certain customers expressing an interest in deactivating their service.
The number does include 1.5% to 2% of its year-end customers in another
long standing "win back" program that does not require a monthly service
charge.
o Gross margins were 64.5% for the 4th quarter of 2000 and 64.4% for the
full year 2000. As it continued to invest for growth and realize a higher
percentage of its revenue high growth services, Qwest expects gross
margins to decrease slightly in 2001, because higher growth products tend
to have lower gross margins during the initial launch phase than more
mature regulated products. Qwest expects that any decrease will be
partially offset by continued focus on operating cost reductions, scale
efficiencies and merger synergies.
o SG&A (selling, general and administrative expenses) as a percentage of
revenue were 24.9% for the 4th quarter of 2000 and 25.5% for the full year
2000. Qwest expects SG&A as a percentage of revenue to continue to improve
modestly through 2001 as a result of workforce reductions and other
synergies and scale and efficiency improvements, partially offset by
increased investments in wireless, DSL and sales activities.
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o It was comfortable with prior guidance of EBITDA margins of just under 40%
in 2001.
o It expected depreciation expense of $2.8 billion in 2000 to increase by
one-third in 2001.
o It expected interest expense (net of capitalized interest) of $1.1 billion
in 2000 to increase by one-third in 2001.
o It expected the number of diluted shares to increase by 3% in 2001 (as
compared to 1.69 billion in 2000).
o It had EPS (earnings per share) of $0.59 and cash EPS of $1.25 for 2000.
It expected EPS and cash EPS for 2001 to be flat or slightly higher, due
to strong EBITDA growth offset by increase in interest and depreciation
expense.
o It expected capital expenditure to be about $9.5 billion in 2001, as
previously announced. It expected that in capital expenditures would be in
the $2.8 to $2.9 billion range per quarter for the first two quarters of
2001, and approximately $1.9 billion in the 4th quarter of 2001. It also
expected that capital expenditures for 2002 and beyond would be closer to
or less than $9 billion per year.
FORWARD LOOKING STATEMENTS WARNING
This Current Report on Form 8-K contains projections and other forward-looking
statements that involve risks and uncertainties. These statements may differ
materially from actual future events or results. Readers are referred to the
documents filed by Qwest with the Securities and Exchange Commission,
specifically the most recent reports which identify important risk factors that
could cause actual results to differ from those contained in the forward-looking
statements, including potential fluctuations in quarterly results, volatility of
Qwest's stock price, intense competition in the communications services market,
changes in demand for Qwest's products and services, dependence on new product
development and acceleration of the deployment of advanced new services, such as
broadband data, wireless and video services, which could require substantial
expenditure of financial and other resources in excess of contemplated levels,
rapid and significant changes in technology and markets, adverse changes in the
regulatory or legislative environment affecting Qwest's business and delays in
Qwest's ability to provide interLATA services within its 14-state local service
territory, failure to maintain rights of way, and failure to achieve the
projected synergies and financial results expected to result from the
acquisition of U S WEST, Inc. timely or at all and difficulties in combining the
operations of Qwest and U S WEST. This Current Report on Form 8-K includes
analysts' estimates and other information prepared by third parties for which
Qwest assumes no responsibility. Qwest undertakes no obligation to review or
confirm analysts' expectations or estimates or to release publicly any revisions
to any forward-looking statements to reflect events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events.
ss including any information in this Current Report on Form 8-K, Qwest does not
necessarily acknowledge that the information is material. The contents of
Qwest's website shall not be deemed to be incorporated by reference into this
Current Report on Form 8-K.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
Exhibit 99.1 Press release dated January 24, 2001.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Qwest has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
QWEST COMMUNICATIONS INTERNATIONAL INC.
DATE: January 24, 2001 By: /s/ YASH A. RANA
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Yash A. Rana
Associate General Counsel and Assistant
Secretary
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EXHIBIT INDEX
Exhibit 99.1 Press release dated January 24, 2001.
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