<PAGE>
Form 11-K for QWEST COMMUNICATIONS INTERNATIONAL INC /CO/ filed on Mar 30, 1999
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
For the period from November 1, 1998 (inception) through December 31, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from _______________ to __________________
Commission file number 000-22609
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
Qwest Communications International Inc. Employee
Stock Purchase Plan
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
Qwest Communications International Inc.
700 Qwest Tower
555 Seventeenth Street
Denver, Colorado 80202
(303) 992-1400
REQUIRED INFORMATION
The following financial statements for the Qwest Communications International
Inc. Employee Stock Purchase Plan are being filed herewith:
<TABLE>
<CAPTION>
Description Page No.
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<S> <C>
Independent Auditors' Report 5
Statement of Financial Condition as of December 31, 1998 6
Statement of Income and Changes in Plan Equity for the period from November 1, 1998 7
(inception) through December 31, 1998
Notes to Financial Statements 8
</TABLE>
Financial Statement Schedules: Schedules I, II and III are not
applicable
The following exhibit is being filed herewith:
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Exhibit No. Description
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23 Consent of Independent Auditors
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
Qwest Communications International
Inc. Employee Stock Purchase Plan
(Name of Plan)
Date: March 30, 1999 By: /s/Robert S. Woodruff
-----------------------
Robert S. Woodruff
Chief Financial Officer and
Executive Vice President - Finance
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QWEST COMMUNICATIONS INTERNATIONAL INC.
EMPLOYEE STOCK PURCHASE PLAN
Financial Statements
Period from November 1, 1998 (Inception)
through December 31, 1998
(With Independent Auditors' Report Thereon)
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QWEST COMMUNICATIONS INTERNATIONAL INC.
Employee Stock Purchase Plan
Period from November 1, 1998 (Inception)
through December 31, 1998
Table of Contents
<TABLE>
<CAPTION>
Page
<S> <C>
Independent Auditors' Report 5
Statement of Financial Condition -
December 31, 1998 6
Statement of Income and Changes in Plan Equity -
Period from November 1, 1998 (Inception) through
December 31, 1998 7
Notes to Financial Statements -
December 31, 1998 8
</TABLE>
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Independent Auditors' Report
The Stock Purchase Plan Committee
Qwest Communications International Inc.
Employee Stock Purchase Plan:
We have audited the accompanying statement of financial condition of the Qwest
Communications International Inc. Employee Stock Purchase Plan (the "Plan") as
of December 31, 1998, and the related statement of income and changes in plan
equity for the period from November 1, 1998 (inception) through December 31,
1998. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial condition of the Plan as of December 31,
1998 and the income and changes in plan equity for the period from November 1,
1998 (inception) through December 31, 1998 in conformity with generally accepted
accounting principles.
KPMG LLP
Denver, Colorado
March 19, 1999
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QWEST COMMUNICATIONS INTERNATIONAL INC.
EMPLOYEE STOCK PURCHASE PLAN
Statement of Financial Condition
December 31, 1998
<TABLE>
<CAPTION>
Assets
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<S> <C>
Common Stock of Qwest Communications International Inc.,
at fair value (10,562 shares) $ 528,100
Receivable from Qwest Communications International Inc. 602,219
-------------------
Total assets $ 1,130,319
===================
Total plan equity $ 1,130,319
===================
</TABLE>
See accompanying notes to financial statements.
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QWEST COMMUNICATIONS INTERNATIONAL INC.
EMPLOYEE STOCK PURCHASE PLAN
Statement of Income and Changes in Plan Equity
Period from November 1, 1998 (Inception) through December 31, 1998
<TABLE>
<CAPTION>
<S> <C>
Additions attributed to:
Net unrealized appreciation in the fair value of
Common Stock of Qwest Communications International Inc. $ 169,039
Contributions from participants 961,280
-------------------
Net increase in plan equity 1,130,319
Plan equity, beginning of period --
-------------------
Plan equity, end of period $ 1,130,319
===================
See accompanying notes to financial statements.
</TABLE>
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<PAGE>
QWEST COMMUNICATIONS INTERNATIONAL INC.
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 1998
(1) Description of Plan
The following description of the Qwest Communications International Inc.
Employee Stock Purchase Plan (the "Plan") provides only general information.
Participants should refer to the Plan agreement for a more complete
description of the Plan's provisions.
(a) General
The Plan is an employee stock purchase plan which allows for
participation by all eligible employees of Qwest Communications
International Inc. and its subsidiaries (the "Company") within the
meaning of Section 423 of the Internal Revenue Code of 1986, as amended
(the "Code"). The Plan was established November 1, 1998.
The purpose of the Plan is to provide eligible employees who wish to
become stockholders of the Company or who wish to increase their
stockholdings in the Company, with an opportunity to purchase shares of
the Company's Common Stock, $.01 par value per share ("Common Stock").
Funds used to purchase shares under the Plan are withheld from employee
compensation (as defined by the Plan) through payroll deductions. The
Common Stock is held by Salomon Smith Barney Inc. (the "Custodian"). The
Custodian holds all of the Plan assets and executes all of the Plan's
transactions.
The Plan is administered by the Stock Purchase Plan Committee (the
"Committee"), which was established by the Board of Directors of the
Company. Under the Plan, 760,000 shares of Common Stock are reserved for
issuance pursuant to the terms of the Plan. The current offering under
this Plan is in effect for the twenty-seven month period from November 1,
1998 (inception) through January 31, 2001. The Plan is not subject to
the provisions of the Employee Retirement Income Security Act of 1974.
Any full-time employee of the Company is eligible to participate in the
Plan immediately on the employee's date of hire. Also, any part-time
employee whose customary employment terms are for more than twenty hours
per week and for five months or more in any calendar year may participate
in the Plan. An employee may enroll in the Plan beginning the first
payroll period for which it is administratively feasible after the
eligibility requirements have been satisfied. No employee having a 5% or
greater ownership interest in the Company may participate in the Plan.
As of December 31, 1998, there were 1,409 employees participating in the
Plan.
Participants may not sell, encumber or otherwise transfer any shares of
Common Stock purchased under the Plan until after the last day of the
sixth month following the month in which the Common Stock was purchased,
unless the Committee, in its sole discretion, waives or modifies such
restriction. Certificates will not be issued to participants with
respect to Common Stock for which the six month holding period has not
expired. The participant is responsible for all costs associated with
the certification or sale of Common Stock purchased under the Plan.
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QWEST COMMUNICATIONS INTERNATIONAL INC.
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 1998
(b) Contributions
Participants can authorize a regular payroll deduction of up to 15% of
eligible compensation per pay period. Participant deductions are subject
to a maximum deduction per employee of $25,000 per year to be applied to
the purchase of shares. The maximum number of shares an employee may
purchase during an offering period is 20,000 shares. All amounts obtained
from payroll deductions under the Plan are used to purchase shares of the
Company's Common Stock. The purchase price for a share of Common Stock
purchased under the Plan is determined by the Committee, but may not be
less than eighty-five percent of the fair value of a share of Common
Stock on the last trading day of the month. The purchase date for shares
of the Company's Common Stock is the last trading date of each month.
(c) Payment of Benefits
The shares of the Company's Common Stock allocated to participants'
accounts are held by the Custodian until such shares become fully
distributable to the participants or the participant's beneficiary in the
event of:
- Termination of employment,
- Retirement,
- Death while an employee,
- Discontinuance of the Plan, or
- Automatically as soon as administratively feasible on the last day of
the sixth month following the last date of purchase under the Plan.
Distribution of shares is recognized on the settlement date.
(2) Summary of Accounting Policies
(a) Basis of Accounting
The financial statements are prepared using the accrual basis of
accounting. Unrealized appreciation/depreciation of assets is determined
as the difference between the excess of fair value over cost at period-
end and the excess of fair value over cost at the beginning of the Plan
period.
(b) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of additions and deductions
during the reporting period. Actual results could differ from such
estimates.
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QWEST COMMUNICATIONS INTERNATIONAL INC.
EMPLOYEE STOCK PURCHASE PLAN
Notes to Financial Statements
December 31, 1998
(c) Investment Valuation
Investments as of December 31, 1998 are valued at fair value, as
measured by the Nasdaq National Market. As of December 31, 1998, there
were 10,562 shares in the Plan, at a fair value of $50.00 per share.
(d) Receivable from Qwest Communications International Inc.
Receivable from the Company represent amounts withheld from employee
compensation which is held by the Company until Common Stock of Qwest
Communications International Inc. is issued to the Custodian.
(e) Administrative Expenses
Administrative expenses of the Plan are paid by the Company.
(3) Income Tax Status
The Plan is an employee stock purchase plan under Section 423 of the Code
and is not subject to income taxes.
Gains or losses on sales of Common Stock purchased by a participant pursuant
to the Plan must be reported to the Internal Revenue Service by the
participant in the year of sale. Gains and losses may be characterized as
ordinary or capital as defined by the Code.
(4) Plan Termination
The Plan and all rights of participants will terminate (i) on the date as of
which participants have exercised options to purchase a number of shares
equal to or greater than the number of shares then subject to the Plan or
(ii) if earlier, the date as of which the Committee or the Board of
Directors of the Company terminates the Plan.
The Board of Directors, with the consent of shareholders, may elect to
extend another offer or, authorize additional shares for this purpose. Upon
termination of the Plan, the entire account of each participant will be
distributed as soon as practicable.
(5) Net Unrealized Appreciation
Investment in Common Stock of Qwest Communications International Inc. at
fair value and at cost at December 31, 1998 was $528,100 and $359,061,
respectively. Net unrealized appreciation in fair value for the period from
November 1, 1998 (inception) through December 31, 1998 was $169,039.
(6) Withdrawal Requests
No shares were distributable to participants due to withdrawal requests or
terminations at December 31, 1998.
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EXHIBIT 23
Consent of Independent Auditors
The Stock Purchase Plan Committee
Qwest Communications International Inc.
Employee Stock Purchase Plan:
We consent to incorporation by reference in the Registration Statement (No. 333-
65345) on Form S-8 of Qwest Communications International Inc. of our report
dated March 19, 1999, relating to the statement of financial condition of Qwest
Communications International Inc. Employee Stock Purchase Plan as of December
31, 1998, and the related statement of income and changes in plan equity for the
period from November 1, 1998 (inception) through December 31, 1998, which report
appears on the 1998 Form 11-K of Qwest Communications International Inc.
Employee Stock Purchase Plan.
KPMG LLP
Denver, Colorado
March 30, 1999
