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): September 7, 2000
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)
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ITEM 5. Other Events
On September 7, 2000, the Registrant announced, among other things, certain
expected financial results for 2000 and 2001. A copy of the press release
announcing the same is attached as Exhibit 99.1 to this Current Report on Form
8-K.
On September 7, 2000, the Registrant hosted a call with financial analysts and
reporters during which it discussed its expected financial results and the
synergies expected from its acquisition of U S WEST, Inc. ("U S WEST") on June
30, 2000. On the call the Registrant announced that it expected the following
(all numbers are approximated):
o By its estimates, had U S WEST kept up with demand for services, 2000
revenues would have been $300 million to $500 million higher.
o Pro forma normalized sequential revenue growth for the third quarter of
2000 (over the second quarter) to be 2% and for the fourth quarter of 2000
(over the third quarter) to be 3.5% to 4%.
o Data and Internet revenue as a percentage of total pro forma normalized
revenue to be 22% to 24% in 2000 and 26% to 29% in 2001.
o Diluted, pro forma normalized EPS (earnings per share) for 2000 to be in
the range of $0.35 to $0.40, and for 2001 to be in the range of $0.40 to
$0.45.
o Diluted, pro forma normalized cash EPS, or EPS without the impact of the
amortization of intangibles associated with purchase accounting, to be
about three times the diluted, pro forma normalized EPS estimates.
o The EPS and cash EPS numbers above are contingent on final determination
of the purchase price allocation mentioned below.
o In the third quarter of 2000, one-time merger-related charges from its
acquisition of U S WEST would include items such as severance, right-sizing
and similar costs ($200 million to $300 million), contract and lease
terminations, reevaluations and other merger integration activities ($200
million to $400 million) and asset write-downs and write-offs ($500 million
to $1 billion).
With respect to guidance, the Registrant expects the following (all numbers are
approximated):
o Pro forma depreciation for 2000 to be $3.0 billion.
o Depreciation for 2001 to increase 25% over 2000 levels.
o A preliminary purchase price allocation has resulted in $38.0 billion of
intangible assets, of which $5 billion will be amortized over approximately
seven years and the rest would be amortized over 40 years. This should
result in annual amortization of intangibles of $1.3 billion to $1.5
billion.
o Interest expense for 2000 to be $1.1 billion.
o Interest expense for 2001 to increase between $200 million and $300 million
over 2000 levels.
o The tax rate for planning purposes for 2000 and 2001 to be 39%, after
adding intangible amortization back to income before taxes.
o The diluted weighted average shares for 2000 to be 1.75 billion and grow to
1.8 billion for 2001.
The pro forma normalized consolidated statements of operations of the Registrant
for the years ended December 31, 1998 and December 31, 1999, and for each of the
quarters ended March 31, 1999, June 30, 1999, September 30, 1999, December 31,
1999, March 31, 2000 and June 30, 2000, giving effect to the acquisition of U S
WEST, are attached to this Current Report on Form 8-K as Exhibit 99.2.
Forward-Looking Statement 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 and U S WEST with the SEC, 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 the Registrant's
stock price, intense competition in the communications services market, changes
in demand for the Registrant'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 the Registrant's business and
delays in the Registrant'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 Current Report on Form 8-K and the attachments may include or incorporate
by reference analysts' estimates and other information prepared by third parties
for which the Registrant assumes no responsibility. The Registrant 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.
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits
Exhibit 99.1 Press release of the Registrant dated September 7, 2000.
Exhibit 99.2 Pro forma, normalized consolidated statement of operations
of the Registrant.
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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: September 7, 2000 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 of the Registrant dated September 7, 2000.
Exhibit 99.2 Pro forma, normalized consolidated statement of operations
of the Registrant.
