Qwest Posts $38 Billion Loss - TheStreet

Finally managing to file some financial reports for recent years,

Qwest

(Q)

on Thursday posted a staggering $38.4 billion loss for 2002.

The struggling Denver telco also posted restated financials for the 2001 and 2000 years, finalizing a long-running process that has seen its losses increase to the tune of billions of dollars. The company has yet to file audited financial reports for any 2003 period, however, and offered no schedule for doing so other than to say it would make new numbers available as soon as possible.

The filings come as Qwest remains under investigation by regulators and the Justice Department over the accounting and business practices of previous management. The probes have focused among other things on whether Qwest and other carriers inflated revenues by incorrectly booking network capacity deals to meet Wall Street's revenue expectations. The company has also been in talks with the

Securities and Exchange Commission

.

Qwest needs to be cleared of any wrongdoing if it hopes to have access again to the capital markets. And Qwest needs funding: The company faces debt maturities of over $16 billion in 2008 and beyond, and analysts say it will need continued access to the markets to meet those obligations. Just last month the company

got waivers from its lenders giving it till the end of the year to file some of its outstanding financials.

Qwest has previously said it would restate 2001 and 2000 financial results and has noted revenue misstatements on several occasions. But on Thursday the company finally closed the books on those periods, saying that it lost $5.6 billion, or $3.37 a share, in 2001, and $1.04 billion, or 82 cents a share, for 2000.

The restatements had the effect of increasing losses by about $2.6 billion over the two periods, or $1.71 a share, and of reducing revenue by roughly the same amount.

"The restatements involve, among other matters, revenue recognition issues related to optical capacity asset transactions, equipment sales, directory publishing and purchase accounting," Qwest's filing said.

Those losses were dwarfed by the 2002 deficit, which the company calculated at $22.87 a share, including a $22.8 billion charge for a change in accounting principles. Qwest put revenue at $15.4 billion for 2002, $16.5 billion for 2001 and $14.1 billion for 2000.

On Thursday, Qwest shares rose 8 cents to $3.70. The stock has lost more than 90% of its value since the Internet boom peaked in early 2000.