Qwest Announces Third Quarter 2007 Results

Tuesday, October 30th, 2007
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Continued Progress In Revenue, Cash Flow And Margin Trends

  • Year-To-Date Adjusted Free Cash Flow a of $1.2 Billion – On Track For Up To $400 Million Improvement This Year
  • Remaining Opt-Out Shareholder Litigation Resolved
  • $2.1 Billion Benefit Recognized on Value of Tax Assets
  • J.D. Power and Associates Recognizes Qwest Broadband as “Highest in Customer Satisfaction with High Speed Internet Providers in the West”
  • Sequential and Year-Over-Year Growth in Data, Internet and Video Services Revenue For All Channels
  • Year-To-Date Adjusted Free Cash Flow a of $1.2 Billion – On Track For Up To $400 Million Improvement This Year
  • Remaining Opt-Out Shareholder Litigation Resolved
  • $2.1 Billion Benefit Recognized on Value of Tax Assets
  • J.D. Power and Associates Recognizes Qwest Broadband as “Highest in Customer Satisfaction with High Speed Internet Providers in the West”
  • Sequential and Year-Over-Year Growth in Data, Internet and Video Services Revenue For All Channels

DENVER — Qwest Communications International Inc. (NYSE: Q) today reported third quarter 2007 results, significantly affected by certain legal and tax related matters. Moreover, positive revenue trends, margin expansion, significant net income and earnings per share growth continued. For the quarter, Qwest reported earnings of $2.1 billion, or $1.08 per diluted share, which includes the recognition of a $2.1 billion tax benefit and $353 million in charges for litigation.

Bundles

Customers again responded well to Qwest’s flexible bundle offerings, including award-winning broadband, digital TV services through Qwest ChoiceTV or DIRECTV, as well as digital voice and national wireless service.

Qwest’s Price for Life on broadband service, as well as the availability of discounts on a variety of bundle combinations helped to increase bundle penetration to 61 percent in the quarter, compared to 56 percent a year ago. Bundles reduce churn, as customers demonstrate their satisfaction with the value of Qwest services. Consumer ARPU has increased by $1 or more in each of the last 3 quarters, moving to $54.51 in the third quarter, up from $53.36 in the prior quarter and from $50.07 a year ago.

Qwest Broadband

Qwest Broadband subscribers grew by 111,000 in the third quarter supported by transition of dial-up users, new stand-alone broadband customers, and existing Qwest customers adding broadband to their bundle. By investing in increasing the speed of the connection to the home, Qwest is making it possible to provide customers with broadband speeds above 20 megabits per second supporting higher bandwidth applications. Mass markets data and Internet revenue increased 36 percent over the third quarter of 2006, and 5.2 percent over the second quarter of this year.

Since the introduction of Qwest Broadband with Windows Livetm, nearly 90 percent of new customers have chosen the service with a new “q.com” e-mail address and domain name.

DIRECTV® Alliance

Qwest added 62,000 net DIRECTV subscribers in the quarter. Qwest has 634,000 video subscribers through Qwest ChoiceTV and the DIRECTV partnership up from a total of 350,000 subscribers a year ago.