Qwest Communications Enters Memorandum of Understanding in Consolidated Securities Action
Under the terms of the contemplated settlement agreement, Qwest would pay a $400 million cash settlement in three installments: $100 million would be paid within 30 days of receiving preliminary court approval of the settlement; $100 million would be paid within 30 days of final approval of the settlement; and the remaining $200 million would be paid by January 15, 2007, plus interest at 3.75 percent on the $200 million between the date of final approval of the settlement and the date of payment. Arthur Andersen, a co-defendant, will be contributing $10 million to Qwest to settle the plaintiffs' claims. The contemplated settlement agreement and related documents that will be filed with the court are subject to a number of material conditions, including court approval.
Additionally, the settlement agreement can be terminated under certain circumstances, including in the event that the SEC elects not to distribute to the putative class members the $250 million penalty that Qwest has already committed to pay to the SEC ($125 million of which has already been paid and the remaining portion to be paid in December, 2005), and if securities purchasers claiming losses of a specified amount seek exclusion from the settlement class.
If a final settlement agreement is concluded pursuant to the MOU, all claims in the litigation would be dismissed against Qwest and all other defendants in that lawsuit except Joseph P. Nacchio, Qwest's former chief executive officer, and Robert S. Woodruff, Qwest's former chief financial officer.
By entering into the MOU, neither Qwest nor the other defendants admit wrongdoing or liability.
Qwest Communications International Inc. (NYSE:Q) is a leading provider of high-speed Internet, data, video and voice services. With approximately 40,000 employees, Qwest is 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.
Forward-Looking Statement Note
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: access line losses due to increased competition, including from technology substitution of our access lines with wireless and cable alternatives; 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 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 regulatory authorities, media and others (including any internal analyses) of financial reporting issues and practices or otherwise; 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; 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 consolidating with other providers or otherwise reorganizing their capital structure to more effectively compete against us; changes in demand for our products and services; 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; changes in the outcome of future events from the assumed outcome included in our significant accounting policies; and our ability to utilize net operating losses in projected amounts.
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 and other statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
By including any information in this release, Qwest does not necessarily acknowledge that disclosure of such information is required by applicable law or that the information is material.
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