DENVER, May 22, 2002 ? Qwest Communications International Inc. said today that it disagrees with Standard & Poor?s action to lower the company?s long-term corporate credit rating to BB+.
Qwest executive vice president and CFO, Robin R. Szeliga said, ?We are extremely disappointed with the action taken by S&P. Most concerning to us is that this change in rating is not based on any new information and we are unclear as to what prompted this action. We expect to be cash flow positive by the end of the second quarter and through the rest of the year. We continue to make progress in our efforts to delever our balance sheet.?
Qwest has in excess of $10 billion of non-strategic assets under consideration for sale to help reduce debt. A number of parties have expressed interest in purchasing some or all of these properties. On May 8, Qwest said that it had received multiple bids for the purchase of all or part of the QwestDex Yellow Pages business. The company is encouraged by the level of interest and quality of the bids and is proceeding with the sales process.
Qwest said it is funded to make quarterly payments on its $26.2 billion in debt until May of 2003.
Given Qwest?s current debt structure, the company believes this downgrade will have no real impact on its repayment obligations. Qwest has stable cash flows from its local service operations, which contribute nearly 80 percent of revenue and more than 90 percent of adjusted EBITDA.
Qwest Communications International Inc. (NYSE: Q) is a leader in reliable, scalable and secure broadband data, voice and image communications for businesses and consumers. The Qwest Macro Capacity® Fiber Network, designed with the newest optical networking equipment for speed and efficiency, spans more than 190,000 miles globally. For more information, please visit the Qwest Web site at www.qwest.com.
This release may contain 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, higher than anticipated employee levels, capital expenditures and operating expenses, 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 timely or at all and difficulties in combining the operations of Qwest and U S WEST. This release may include 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.
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