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): March 30, 1998
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.)
555 SEVENTEENTH STREET, SUITE 1000 DENVER, COLORADO 80202
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 303-291-1400
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NOT APPLICABLE
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
On March 31, 1998, the Registrant announced the consummation of the
merger pursuant to the Amended and Restated Agreement and Plan of Merger dated
as of December 31, 1997 (the "Merger Agreement") among Phoenix Network, Inc.
("Phoenix"), the Registrant and a wholly-owned subsidiary of the Registrant,
providing for the merger that will result in Phoenix becoming a subsidiary of
the Registrant. As of March 30, 1998, the effective date of the acquisition,
approximately 785,175 shares of the Registrant's common stock having a deemed
value of approximately $27,222,017 (based upon an adjusted average price of
$34.67 per share) were exchanged for the outstanding shares of common stock, par
value $0.001 per share of Phoenix ("Phoenix Common Stock"). Each outstanding
share of Phoenix Common Stock was converted into the right to receive 0.0218
shares of the Registrant's common stock and cash in lieu of fractional shares,
in accordance with the terms of the Merger Agreement. Additional cash
consideration of up to $4 million is being withheld pending the outcome of
litigation to which Phoenix or its affiliates may have certain potential
liability, and as to which final and nonappealable resolution has not been
attained.
The press release dated March 31, 1998 of the Registrant and Phoenix
Network announcing the consummation of the merger is filed with the Securities
and Exchange Commission as Exhibit 99.1 to this Current Report on Form 8-K.
The Registrant cautions that the press release contains forward-looking
statements that may include, among others, statements concerning the
Registrant's plans to complete an approximately 16,250 route mile
coast-to-coast, technologically advanced, fiber optic telecommunications network
(the "Qwest Network"), expectations as to funding its capital requirements,
anticipated expansion of carrier and commercial services and other statements of
expectations, beliefs, future plans and strategies, anticipated developments and
other matters that are not historical facts. The Registrant cautions that these
forward-looking statements are subject to risks and uncertainties that could
cause actual events or results to differ materially from those expressed or
implied by the statements. Important factors that could prevent the Registrant
from achieving its stated goals include, but are not limited to: (i) failure by
the Registrant to manage effectively, cost efficiently and on a timely basis the
construction of the Qwest Network route segments; (ii) failure by the Registrant
to enter into additional customer contracts to sell dark fiber or provide
high-volume capacity and otherwise expand its telecommunications customer base;
(iii) failure by the Registrant to obtain and maintain all necessary
rights-of-way; (iv) intense competition in the Registrant's carrier services and
commercial services markets; (v) the potential for rapid and significant changes
in technology and their effect on the Company's operations; (vi) operating and
financial risks related to managing rapid growth and integrating acquired
businesses; (vii) adverse changes in the regulatory environment; (viii) failure
by the Registrant to consummate the previously announced merger with LCI
International Inc. timely or at all; and (ix) risks of being highly leveraged
and sustaining operating cash deficits.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
Exhibit 99.1 Press release of Phoenix Network, Inc. and the
Registrant dated March 31, 1998.
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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.
QWEST COMMUNICATIONS INTERNATIONAL INC.
DATE: April 1, 1998 By: /s/ ROBERT S. WOODRUFF
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Robert S. Woodruff
Executive Vice President - Finance,
Chief Financial Officer and
Treasurer
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EXHIBIT INDEX
Exhibit 99.1 Press release of Phoenix Network, Inc. and the
Registrant dated March 31, 1998.
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QWEST CORPORATE CONTACT: QWEST INVESTOR CONTACT: QWEST MEDIA CONTACT:
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Qwest Qwest Communications Alexander Communications
Communications Lee Wolfe Erin McKelvey
Diane Reberger (800) 567-7296 (303) 615-5070 x108
(303) 291-1708 [email protected] [email protected]
[email protected] HTTP://WWW.QWEST.NET HTTP://WWW.ALEXANDER-PR.COM
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HTTP//WWW.QWEST.NET
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PHOENIX NETWORK INVESTOR CONTACT:
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Phoenix Network
Monica Williamson
(800) 448-0804
HTTP://WWW.PHOENIXNET.COM
QWEST ANNOUNCES COMPLETION OF PHOENIX NETWORK ACQUISITION
DENVER--(BUSINESS WIRE)--MARCH 31, 1998--Qwest Communications International Inc.
today announced the consummation of the definitive merger agreement, dated Dec.
31, 1997, to acquire Phoenix Network, Inc. of Golden Colorado.
Phoenix Network, the non-facilities-based reseller of long distance services,
has approximately 40,000 business customers, and annual revenue of nearly $75
million.
As of the close of the acquisition, approximately 785,175 shares of Qwest common
stock having a deemed value of approximately $27,222,017 (based upon an adjusted
average price of $34.67 per share) were exchanged for the outstanding shares of
Phoenix Network. Additional cash consideration of up to $4 million is being
withheld pending the outcome of litigation to which Phoenix Network or its
affiliates may have certain potential liability, and as to which final and
nonappealable resolution has not been attained.
The transaction was approved by a majority vote of Phoenix Network stockholders
at their Annual Meeting of Stockholders held March 30, 1998, the effective date
of the transaction.
Each outstanding share of Phoenix Network common stock will be exchanged for
0.0218 shares of Qwest common stock and cash in lieu of fractional shares in
accordance with the terms of the definitive merger agreement. As soon as
practicable following the close of the transaction, Chase Mellon Shareholder
Services, the appointed exchange agent, will issue letters of transmittal to
each Phoenix Network stockholder, detailing procedures of the exchange. The
outstanding shares of Phoenix Network common stock on the effective date were
36,053,884 shares (on a fully diluted basis).
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THE QWEST MACRO CAPACITY NETWORK
Qwest's planned domestic 16,250 mile network will serve over 125 cities, which
represent approximately 80 percent of the data and voice traffic originating in
the United States, upon its scheduled completion in the second quarter of 1999.
Currently, 3,750 miles are activated from Los Angeles to Cleveland; and from
Dallas to Houston. Qwest is also extending its network 1,400 miles into Mexico
with completion slated for late third quarter 1998.
The Qwest Macro Capacity Fiber network is designed with a highly reliable and
secure bi-directional, line switching OC-192 SONET ring architecture. Upon
completion, the network will offer a self-healing system that provides the
ultimate security and reliability by allowing instantaneous rerouting in the
event of a fiber cut.
ABOUT QWEST
Qwest Communications International Inc. (NASDAQ:QWST) is a multimedia
communications company building a high-capacity, fiber optic network for the
21st century. With its cutting-edge technology, Qwest will deliver high-quality
data, video and voice connectivity securely and reliably to businesses,
customers and other communications service providers. Further information is
available at WWW.QWEST.NET.
# # #
This release may contain 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 SEC,
specifically the most recent reports on Form 10-Q, 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, dependence on new product development, rapid technological and market
change, failure to complete the network on schedule, failure to consummate the
proposed merger with LCI International, Inc. timely or at all, volatility of
stock price, financial risk management and future growth subject to risks.
The Qwest logo is a registered trademark of Qwest Communications International
Inc. in the U.S. and certain other countries.
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