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Technology Stocks : Qwest Communications (Q) (formerly QWST) -- Ignore unavailable to you. Want to Upgrade?

To: Roger Hess who wrote (1722)	7/8/1998 8:42:00 AM
From: Nick	Respond to of 6846

Qwest Hosts First Major Investment Community Meeting Second Quarter Results in Line With Analysts' Expectations Merger Synergies Improved and Purchase Accounting Amounts Determined DENVER--(BUSINESS WIRE)--July 8, 1998--Qwest Communications International, Inc. (NASDAQ:QWST - news) is hosting its first major investment community meeting today in New York City. Qwest's strategic direction, operational plans and status of integration activities related to the merger with LCI International will be the primary areas of focus at the meeting. In addition, the company will announce it anticipates that second quarter earnings will meet analysts' expectations. ''It has been a year since Qwest had its initial public offering, and we are looking forward to updating and informing the financial community on the exciting progress of the company,'' said Robert S. Woodruff, executive vice president, Finance and CFO of Qwest. ''Our business plan is on track, the integration of LCI is proceeding well, and we expect to comfortably meet analysts' expectations for the second quarter.'' A consensus of reports from financial analysts estimates second quarter revenues of approximately $370 million and earnings before interest, taxes, depreciation and amortization (EBITDA) of approximately $17 million, based on applying purchase accounting. Qwest expects the second quarter results to be in line with these expectations. Under purchase accounting, the second quarter results will reflect the full three months of Qwest operations and one month of LCI operations. The final quarterly results are expected to be released July 27, 1998. Synergies from the merger with LCI International are expected to be better than earlier projections. Qwest previously estimated cumulative 1998 through 2001 revenue synergies of $227 million, $1.16 billion of cost synergies, and $288 million in capital synergies. Today, Qwest will report revenue synergies are now estimated to exceed $300 million, resulting in EBITDA benefits in excess of $105 million; cost synergies are in line with previous estimates; and capital synergies are now expected to exceed $600 million. Of these cumulative synergies, $75 million of operating synergies (revenue contribution and cost savings) and $70 million of capital synergies are expected to be reflected in 1998 results. The LCI merger, which closed on June 5, 1998, is being accounted for using purchase accounting and will reflect a purchased research and development (R&D) write-off in the range of $800 to $850 million in the second quarter, including a charge for purchased R&D for EUnet International, a leading European data company. The EUnet acquisition closed on April 14, 1998. Additionally, up to $50 million of other one-time merger-related charges will be booked in the quarter bringing total one-time charges for the second quarter related to acquisitions to $850 to $900 million. As a result of the four acquisitions that have closed through the second quarter of 1998, Qwest will amortize $250 million in developed technology over 10 years and $3.5 to $3.6 billion in goodwill over approximately 40 years. The Qwest Macro Capacity Fiber Network Qwest's planned domestic 18,449 mile network will serve over 130 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. To date, approximately 8,800 miles of the Qwest Macro Capacity Fiber Network are activated, including the transcontinental segment that extends from Los Angeles to Sacramento and across to New York. Qwest is also extending its network 1,400 miles into Mexico with completion slated for late 1998 and has transatlantic capacity to serve Europe. 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