Qwest Base Case

By David F. Carr  |  Posted 2003-08-01 Print this article Print

Unrealistic financial forecasts nearly tanked telecom giant Qwest. Can better analysis make a difference?

Qwest Base Case

Headquarters: 1801 California St., Denver, CO 80202

Phone: (303) 992-1400

Business: Local and long distance phone service, data services

Chief Information Officer: Al-Noor Ramji

Financials in 2002: Revenue of $15.5 billion, loss of $35.9 million (subject to restatement, Securities and Exchange Commission investigation).

Challenge: Restore faith in Qwest's financial management and forecasts.

Baseline Goals:

  • Achieve at least break-even free cash flow (operating cash flow, minus capital expenditures) in 2003.

  • Raise cash by selling off businesses without further damaging Qwest's stock value, which already has fallen from more than $50 per share to around $5.

  • Sell QwestDex directory business for $7 billion, to compensate for losing its cash flow.

  • Reduce Qwest's debt load, which topped $26 billion in 2002.

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    David F. Carr David F. Carr is the Technology Editor for Baseline Magazine, a Ziff Davis publication focused on information technology and its management, with an emphasis on measurable, bottom-line results. He wrote two of Baseline's cover stories focused on the role of technology in disaster recovery, one focused on the response to the tsunami in Indonesia and another on the City of New Orleans after Hurricane Katrina.David has been the author or co-author of many Baseline Case Dissections on corporate technology successes and failures (such as the role of Kmart's inept supply chain implementation in its decline versus Wal-Mart or the successful use of technology to create new market opportunities for office furniture maker Herman Miller). He has also written about the FAA's halting attempts to modernize air traffic control, and in 2003 he traveled to Sierra Leone and Liberia to report on the role of technology in United Nations peacekeeping.David joined Baseline prior to the launch of the magazine in 2001 and helped define popular elements of the magazine such as Gotcha!, which offers cautionary tales about technology pitfalls and how to avoid them.

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