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Qwest sees $40.8 billion in charges
Phone company outlines a slew of charges reflecting the declining value of its assets.
October 28, 2002: 5:53 PM EST

DENVER (Reuters) - Telephone company Qwest Communications International Inc., which faces federal and criminal probes of its accounting, said on Monday it may take charges of up to $40.8 billion to write down the value of its goodwill and network assets.

The charges include about $30 billion to write down the value of goodwill and other intangibles, and about $10.8 billion to reflect the declining value of its high-speed fiber-optic network and customer lists and product technology associated with local telephone operations, the company said.

Qwest (Q: Research, Estimates) said it completed its review of optical capacity sales and decided to adjust the accounting of $531 million in cash sales. It previously said it would adjust the accounting of $950 million in "swaps" of optical capacity with other carriers.

As a result, it will restate a total of $1.48 billion in optical capacity deals since its June, 2000 acquisition of local telephone company US West. It does not expect sales of optical capacity assets in 2002 to affected.

Denver-based Qwest said it would also adjust 2000 and 2001 revenues in its wireless division to recognize certain promotional campaigns, involving complementary equipment and minutes-of-use packages. That will result in a decrease of about $120 million to the restated 2001 and 2000 financial statements, it said.  Top of page

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