SEATTLE, May 16, 2003 ? Qwest Communications International Inc. (NYSE: Q) today reached an agreement with four critical groups representing consumers, businesses, seniors and government entities on the proposed sale of the company?s directory business, commonly known as QwestDex. In the agreement, Qwest, the Washington Attorney General, AARP, The Washington Electronic Business Telecommunications Coalition and the Department of Defense agreed to a one-time customer bill credit of $67 million as a condition for approval of the sale. Additionally, the agreement includes revenue credits of more than $100 million per year over the next 15 years to keep rates low for customers in Washington.
?This is a fair and balanced settlement that provides Washington customers with $67 million in credits, as well as ongoing provisions to help ensure stable rates for telecommunications services,? said Kirk Nelson, Qwest president in Washington. ?The sale of our QwestDex unit is a critical component of our effort to strengthen our finances so that we can continue to improve service, deliver new products and services to our customers, and provide benefits to our employees.?
The settlement on the QwestDex sale will provide for one-time bill credits totaling $67 million for Washington customers. Additionally, an annual revenue credit of $110 million for the first four years and $103.4 million for the following 11 years, for a total of 15 years, will be added to Qwest?s intrastate regulated revenues.
Hearings on this settlement and other remaining issues will begin on May 19. The staff of the Washington Utilities and Transportation Commission is not involved in this settlement.
On August 19, 2002, Qwest Communications announced the sale of all of the business of QwestDex to the private equity firms of The Carlyle Group and Welsh, Carson, Anderson & Stowe. The transaction will be completed in two phases. The first phase, completed November 8, 2002, included the directories operations in Colorado, Iowa, Minnesota, Nebraska, New Mexico, North Dakota, and South Dakota. Qwest used a portion of the proceeds from this first phase of the sale to pay down its existing credit facility to $2 billion. The second phase involves the QwestDex operations in the states of Oregon, Montana, Idaho, Utah, Arizona and Wyoming, along with Washington.
Qwest Communications International Inc. (NYSE: Q) is a leading provider of voice, video and data services to more than 25 million customers. The company?s 50,000-plus employees are committed to the ?Spirit of Service? and providing world-class services that exceed customers? expectations for quality, value and reliability. 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 us 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 but not limited to: the duration and extent of the current economic downturn in our 14-state local service area, including its effect on our customers and suppliers; the effects of our anticipated restatement of historical financial statements including delays in or restrictions on our ability to access the capital markets or other adverse effects to our business and financial position; our substantial indebtedness, and our inability to complete any efforts to de-lever our balance sheet through asset sales or other transactions; any adverse outcome of the SEC's current investigation into our accounting policies, practices and procedures; any adverse outcome of the current investigation by the U.S. Attorney's office in Denver into certain matters relating to us; adverse results of increased review and scrutiny by Congress, regulatory authorities, media and others (including any internal analyses) of financial reporting issues and practices or otherwise; the failure of our chief executive and chief financial officers to provide certain certifications relating to certain public filings; rapid and significant changes in technology and markets; any adverse developments in commercial disputes or legal proceedings, including any adverse outcome of current or future legal proceedings related to matters that are the subject of governmental investigations, and, to the extent not covered by insurance, if any, our inability to satisfy any resulting obligations from funds available to us, if any; our future ability to provide interLATA services within our 14-state local service area; potential fluctuations in quarterly results; volatility of our stock price; intense competition in the markets in which we compete, including the likelihood of certain of our competitors emerging from bankruptcy court protection or otherwise reorganizing their capital structure and competing effectively against us; changes in demand for our 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; adverse changes in the regulatory or legislative environment affecting our business; and changes in the outcome of future events from the assumed outcome included in our significant accounting policies.
The information contained in this release is a statement of Qwest's present intention, belief or expectation and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices, the economy in general and Qwest's assumptions. Qwest may change its intention, belief or expectation, at any time and without notice, based upon any changes in such factors, in Qwest's assumptions or otherwise. The cautionary statements contained or referred to in this release should be considered in connection with any subsequent written or oral forward-looking statements that Qwest or persons acting on its behalf may issue. 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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