Qwest Says It Has the Resources to Cover Debt
By Roger Cheng
The Wall Street Journal
Monday, November 24, 2008
Qwest Communications International Inc. Chief Financial Officer
Joseph Euteneuer assured Wall Street that the company was
generating enough free cash and had enough "levers" to pull to
cover its debt.
The Denver telecommunications company views its debt-maturities
profile as "manageable," Mr. Euteneuer told analysts during a
Bank of America investor conference Friday, which was broadcast
over the Internet.
Mr. Euteneuer said he still sees strong free cash flow and
liquidity position. The company plans to refinance some
debt, and would be willing to tap the debt markets, but Mr.
Euteneuer acknowledged that he wouldn't go there in the
company's current condition.
The biggest concern is the $1.27 billion in convertible debt due
November 2010, which Bank of
analyst David Barden called the "keystone debt."
Mr. Euteneuer agreed that the convertible debt was a focus of
the company, and said Qwest preferred to use its free cash flow
to pay down debt, rather than repurchasing stock.
Qwest is also focused on recurring revenue and margins, and
reducing its turnover rate, he said, adding that high-speed
Internet service has been positioned as the foundation of the
bundle. The company plans to unveil video services and
other features stemming from Internet access, he said.
The company in the third quarter ramped up its marketing efforts
after going "dark" in the previous quarter, which should allow
the carrier to add more digital-subscriber-line customers.
Mr. Euteneuer said he expects the marketing campaign to provide
momentum going into 2009.
Meanwhile, the Networx government contract is another potential
catalyst for revenue growth on the business side. But Mr.
Euteneuer cautioned that the contract signing has been slow --
partly because of an incoming administration -- and he doesn't
see a significant contribution from Networx next year.
On potential mergers and acquisitions, Mr. Euteneuer demurred on
the issue, saying only that the management team is focused on
shareholder value, and would be open to an attractive offer.
Write to Roger Cheng at