-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KD6akgL3Y10IdVhKZYsieyFSfW8UB95UMjh0GMEJIgYIr7VDZE20J++8bGHqEdug LMjXWEe3o+wFTanMUE8xBA== 0000950103-99-000552.txt : 19990615 0000950103-99-000552.hdr.sgml : 19990615 ACCESSION NUMBER: 0000950103-99-000552 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990613 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990614 FILER: COMPANY DATA: COMPANY CONFORMED NAME: QWEST COMMUNICATIONS INTERNATIONAL INC CENTRAL INDEX KEY: 0001037949 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 841339282 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-22609 FILM NUMBER: 99645712 BUSINESS ADDRESS: STREET 1: 700 QWEST TOWER STREET 2: 555 SEVENTEENTH STREET CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3039921400 MAIL ADDRESS: STREET 1: 700 QWEST TOWER STREET 2: 555 SEVENTEENTH STREET CITY: DENVER STATE: CO ZIP: 80202 FORMER COMPANY: FORMER CONFORMED NAME: QUEST COMMUNICATIONS INTERNATIONAL INC DATE OF NAME CHANGE: 19970416 8-K 1 ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 June 13, 1999 Date of Report (Date of earliest event reported) QWEST COMMUNICATIONS INTERNATIONAL INC. (Exact name of registrant as specified in its charter) ----------------------- Delaware 000-22609 84-1339282 (State of other jurisdiction (Commission (IRS employer of incorporation) file no.) identification no.) 555 Seventeenth Street, Suite 700 Denver, Colorado 80202 (Address of principal executive offices) (Zip code) (303) 291-1400 Registrant's telephone number, including area code Not applicable (Former name or address, if changed since last report) ================================================================================ Item 5. Other Events. On June 13, 1999, Qwest Communications International Inc., a Delaware corporation ("Qwest"), offered to acquire U S WEST, Inc., a Delaware corporation ("U S WEST"), and Frontier Corporation, a New York corporation ("Frontier"), in separate transactions. A copy of the Qwest press release, dated June 13, 1999, and the Qwest analyst presentation, dated June 14, 1999, are attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated herein by reference. This Current Report on Form 8-K contains or incorporates by reference forward-looking statements that involve risks and uncertainties. These statements may differ materially from actual future events or results. Readers are referred to the documents filed by Qwest with the Securities and Exchange Commission, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. These materials include analysts' estimates and other information prepared by third parties for which Qwest assumes no responsibility. In addition, certain statements regarding synergies and other projections and information contained in the analyst presentation and press release are based on publicly available information regarding U S West and Frontier. Qwest undertakes no obligation to review or confirm analysts' expectations or estimates or such publicly available information or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. Exhibit 99.1 -- Press release of the Registrant, dated June 13, 1999. Exhibit 99.2 -- Analyst presentation of the Registrant, dated June 14, 1999. 2 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. QWEST COMMUNICATIONS INTERNATIONAL INC. By: /s/ Robert S. Woodruff ------------------------------------------ Name: Robert S. Woodruff Title: Executive Vice President - Finance and Chief Financial Officer June 14, 1999 3 EXHIBIT INDEX Exhibit 99.1 -- Press release of the Registrant, dated June 13, 1999. Exhibit 99.2 -- Analyst presentation of the Registrant, dated June 14, 1999. 4 EX-99.1 2 PRESS RELEASE Letterhead of Qwest FOR IMMEDIATE RELEASE Contacts: Media Contact: Investor Contact: Tyler Gronbach Lee Wolfe 6/13 and 6/14 only: 800-567-7296 c/o Kekst and Company IR@qwest.com (212) 521-4800 After 6/14: (303) 992-2155 tyler.gronbach@qwest.com QWEST COMMUNICATIONS OFFERS TO ACQUIRE U S WEST AND FRONTIER IN PLAN TO CREATE $87 BILLION WORLDWIDE COMMUNICATIONS COMPANY -- U S WEST Shareholders to Receive Up to $80.00 Per Share in Qwest Common Stock -- -- Frontier Shareholders to Receive Up to $75.00 Per Share, Including $20.00 in Cash and Up to $55.00 Per Share in Qwest Common Stock -- -- Two Transactions Valued at $55 Billion in Cash and Equity and $11.4 Billion in Assumed Debt -- -- New Company Will Deliver Wide Range of Broadband Applications and Services, Benefit 31 Million Customers, Spur Local Competition -- -- Both Proposals are Strategically and Financially Superior to Pending U S WEST and Frontier Transactions -- DENVER, June 13, 1999 - Qwest Communications International Inc. (Nasdaq: QWST) today offered to acquire U S WEST, Inc. (NYSE: USW) and Frontier Corporation (NYSE: FRO) in separate transactions for a total of $55 billion in cash and equity and $11.4 billion in assumed debt. The proposed transactions will enable Qwest to bring innovative Internet communication services and accelerate the delivery of broadband connectivity to more than 31 million consumers and businesses across the United States. The new company will have a combined equity market capitalization of $87 billion, be headquartered in Denver and employ approximately 71,000 people. 2 "With the proposed acquisitions of U S WEST and Frontier, we take the next logical step in accelerating our delivery of Internet-based, broadband communications services to customers," said Qwest Chairman and CEO Joseph P. Nacchio. "The Internet communications powerhouse we intend to create will bring together the three companies' network infrastructure, applications and services, as well as their customer distribution channels, to further strengthen Qwest's worldwide, first-to-market leadership position and fuel our continued growth." Qwest said the proposed Qwest/U S WEST/Frontier combination will generate many strategic and customer benefits. These include: - -- creation of a combined enterprise with $22 billion of pro forma year-2000 revenue and $8 billion of pro forma year-2000 EBITDA (earnings before interest, taxes, depreciation and amortization); - -- accelerated implementation of Qwest's growth strategy, including deployment of its industry-leading Internet platform and local broadband connectivity services; - -- enhanced Qwest leadership in value-added services through 19 combined CyberCenters, strategic alliances and network facilities; and - -- financial and operational scale and scope through lower unit costs achieved by serving an expanding base of more than 31 million customers, including multinational corporations. Qwest expects the combined enterprise to realize: - -- total synergies of approximately $14 billion through the year 2005; - -- annual revenue growth of between 15% and 17% after Qwest receives approval to provide interLATA long-distance service throughout the U S WEST region; and - -- annual growth in EBITDA of approximately 20% after Qwest receives approval to provide interLATA long-distance service throughout the U S WEST region. Qwest expects the combination to increase Qwest's earnings per share in the first year following completion of the U S WEST transaction, and to be increasingly accretive thereafter. Qwest said it expects to complete the Frontier and U S WEST transactions by December 1999 and mid-year 2000, respectively, dates which are consistent with the closings projected for the pending transactions involving Frontier and U S WEST. "Because of our proven ability to adapt rapidly to shifts in the marketplace and effectively implement our strategic business plan, Qwest is uniquely positioned to capitalize immediately on the skills and resources of the combined enterprise for the benefit of shareholders, customers, employees and the communities we serve," said Mr. Nacchio, who will be chairman and chief executive officer of the combined company. 3 The two acquisition proposals were communicated in separate letters sent today by Mr. Nacchio to U S WEST Chairman, President and CEO Solomon D. Trujillo and to Frontier CEO Joseph P. Clayton. Neither proposal is conditioned upon acceptance of the other proposal. The full texts of the two letters are attached to this press release. Qwest/U S WEST Combination Qwest has offered to acquire U S WEST, a Denver-based provider of communications services to more than 25 million customers in 14 states, for 1.738 shares of Qwest common stock for each share of U S WEST common stock. If Frontier agrees to a business combination with Qwest, the consideration payable to U S WEST shareholders will be increased to 1.783 shares of Qwest common stock for each share of U S WEST common stock. In either case, the transaction will be accounted for as a purchase and will be tax-free to U S WEST shareholders. Based on the closing price of Qwest's shares on Friday, June 11, 1999, the value of Qwest's offer for U S WEST common stock is $80.00 per share if Frontier agrees to a business combination with Qwest and $78.00 per share if Frontier and Qwest do not agree to a business combination. The total equity market value of the Qwest/U S WEST transaction is $41.3 billion ($40.2 billion if Frontier does not agree to a business combination with Qwest). In addition, Qwest will assume $10 billion of U S WEST net debt. Assuming Frontier agrees to a business combination with Qwest, Qwest's offer for U S West represents a 45.8% premium to U S WEST's closing share price of $54.875 on Friday, June 11 and a 28.5% premium to the closing price of U S WEST on May 14, 1999, the last trading day prior to the announcement of U S WEST's merger agreement with Global Crossing. The offer also represents a premium of 25.4% over the value to U S WEST shareholders of the pending transaction with Global Crossing on June 11. If Frontier does not agree to a business combination with Qwest, the Qwest offer for U S WEST represents premiums of 42.1% and 25.3% to the corresponding closing prices of U S WEST common stock on June 11 and May 14, respectively. This offer also represents a premium of 22.2% over the value to U S WEST shareholders of the pending Global Crossing transaction on June 11. Qwest expects to invite Mr. Trujillo of U S WEST to become Vice Chairman of Qwest after the completion of the Qwest/U S WEST transaction, and to invite Mr. Trujillo and three other U S WEST directors to become Qwest directors at that time. Qwest stated that in order to ensure completion of the U S WEST transaction, it is prepared to take all actions necessary to comply with current restrictions on the provision of long-distance service in the U S WEST region. Qwest noted that U S WEST recently announced plans to take steps to accelerate its efforts to achieve compliance with the requirements that would permit U S WEST to offer long-distance service in its region, and that Qwest strongly supported that decision. 4 Qwest/Frontier Combination Qwest has also offered to acquire Frontier Corporation, a Rochester, New York-based provider of facilities-based, integrated communications and Internet services with about two million customers in 35 states, for cash and Qwest common stock. Qwest will pay $20.00 in cash and 1.181 shares of Qwest common stock for each share of Frontier common stock. If U S WEST agrees to a business combination with Qwest, the common stock component of the consideration to be paid to Frontier shareholders will be increased to 1.226 shares of Qwest common stock for each share of Frontier common stock. Based on the closing price of Qwest common stock on Friday, June 11, the Qwest cash and stock offer has a value of $75.00 per Frontier share if U S WEST also agrees to a business combination with Qwest and $73.00 per share if U S WEST does not agree to a business combination with Qwest. The total market value of the Qwest/Frontier transaction is $13.6 billion if U S WEST agrees to a business combination with Qwest and $13.2 billion if U S WEST does not agree to a business combination with Qwest. In addition, Qwest will assume $1.4 billion of Frontier net debt. The transaction will also be accounted for as a purchase and the stock portion of Qwest's offer will be tax-free for Frontier shareholders. Assuming U S WEST agrees to a business combination with Qwest, the Qwest offer for Frontier represents a 35.3% premium to Frontier's closing share price of $55.44 on Friday, June 11, and a 68.1% premium to the closing price of Frontier on March 16, 1999, the day prior to the announcement of Frontier's merger agreement with Global Crossing. This offer also represents a 19.0% premium over the value to Frontier's shareholders of the pending transaction with Global Crossing on June 11. If U S WEST does not agree to a business combination with Qwest, the Qwest offer for Frontier represents premiums of 31.7% and 63.6% to the corresponding closing prices of Frontier's common stock on June 11 and March 16, respectively. This offer also represents a premium of 15.9% over the value to Frontier's shareholders of the pending Global Crossing transaction on June 11. Qwest has received financing commitments from DLJ Capital Funding, Inc. and Bank of America, NT & SA to supplement its existing cash reserves for the purpose of funding the cash portion of the consideration to be paid to Frontier shareholders and to pay transaction fees and expenses. Qwest expects to invite two directors of Frontier, including Mr. Clayton, to become Qwest directors after the completion of the Qwest/Frontier transaction. The Combined Qwest/U S WEST/Frontier - Strategic Fit The combined Qwest/U S WEST/Frontier enterprise will leverage and further strengthen Qwest's industry-leading assets, including its Internet backbone and value-added Internet Protocol (IP) platform, and accelerate broadband connectivity for millions of customers. 5 Among the many strategic assets of the new company will be: - -- Qwest Macro Capacity Fiber Network, spanning 18,500 miles in the United States, combined with U S WEST's 40,400-mile network and Frontier's 18,000-mile network; - -- Frontier's eleven GlobalCenters for Internet web hosting and data center business; - -- Qwest's seven CyberCenters; - -- Qwest's venture with KPN, the Dutch telecommunications company, to build and operate a high-capacity European fiber optic, IP-based network that has 2,100 miles and will span 8,100 miles when it is completed in 2001; - -- U S WEST's 35,000 broadband local digital subscriber lines (DSL) and 220,000 PCS subscribers; and - -- U S WEST's !NTERPRISE data networking business, with 200,000 Internet access customers. The Combined Qwest/U S WEST/Frontier - Financial Aspects Qwest anticipates that the two transactions will result in total operating synergies of approximately $14 billion over the first five post-completion years, including the following: - -- Incremental revenues (net of costs) of $2.9 billion to $3.1 billion as the combined enterprise expands its local, data, IP and long-distance services. - -- Operating cost savings of between $6.7 billion and $7.1 billion in such areas as network operations and maintenance, sales and marketing, billing, customer and back-office support and by capturing efficiencies in procurement and other areas. - -- Capital expenditure savings of between $3.8 billion and $4.0 billion by eliminating duplication in the three companies' planned network buildouts and in other infrastructure and back-office areas. Financial and Strategic Superiority of Qwest's Proposals Qwest stated that its proposals for U S WEST and Frontier are financially and strategically superior to Global Crossing's pending transactions. - -- Frontier's and U S WEST's shareholders will receive a higher premium for their shares; - -- Frontier's and U S WEST's shareholders will receive a better stock currency, backed by premier assets and a strong management team with a proven track record of performance and growth; 6 - -- Frontier's and U S WEST's shareholders will benefit from value through greater realizable synergies; - -- Qwest's transaction structures are simple; and - -- integration of the three companies has a higher probability of success because of Qwest's successful experience in integrating operations. Each of the transactions is subject to regulatory and shareholder approvals and other customary closing conditions, including expiration of the applicable Hart-Scott-Rodino waiting periods. Qwest's financial and legal advisers on the transaction are Donaldson, Lufkin & Jenrette and Davis Polk & Wardwell, respectively. About Qwest Qwest Communications International Inc. (Nasdaq: QWST) is a leader in reliable and secure broadband Internet-based data, voice and image communications for businesses and consumers. Headquartered in Denver, Qwest has more than 8,500 employees working in North America, Europe and Mexico. The Qwest Macro Capacity(R) Fiber Network, designed with the newest optical networking, will span more than 18,500 route miles in the United States when it is completed by mid-1999, and an additional 315-mile network route that will be completed by the end of the year. In addition, Qwest and KPN, the Dutch telecommunications company, have formed a venture to build and operate a high-capacity European fiber optic, Internet Protocol-based network that has 2,100 miles and will span 9,100 miles when it is completed in 2001. Qwest also has nearly completed a 1,400-mile network in Mexico. For more information, please visit the Qwest web site at www.qwest.com. Figures reflecting the combined companies' equity market capitalization were computed using the Treasury stock method and based on figures reported in their most recent public filings. Note to Editors and Producers B-Roll footage is available through the following satellite feeds: June 13: 4:30 PM - 5:00 PM, C Band, Telstar 5, Transponder 24 June 13: 7:30 PM - 8:00 PM, C Band, Telstar 5, Transponder 24 June 14: 5:00 AM - 5:30 PM, C Band, Telstar 5, Transponder 24 June 14: 9:30 AM - 10:00 AM, C Band, Telstar 4, Transponder 9 Audio: 6.2/6.8 # # # This release contains forward-looking statements that involve risks and uncertainties. These statements may differ materially from actual future events or results. Readers are referred to the documents filed by Qwest with the SEC, specifically the most recent reports which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements, including potential fluctuations in quarterly results, dependence on new product development, rapid technological and market change, failure to complete the network on schedule and on budget, financial risk management and future growth subject to risks, Qwest's ability to achieve Year 2000 compliance, and adverse changes in the regulatory or legislative environment. This release includes analysts' estimates and other information prepared by third parties for which Qwest assumes no responsibility. In addition, certain statements regarding synergies and other projections and information contained in this release are based on 7 publicly available information regarding U S WEST and Frontier. Qwest undertakes no obligation to review or confirm analysts' expectations or estimates or such publicly available information or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. The Qwest logo is a registered trademark of Qwest Communications International Inc. in the U.S. and certain other countries. The following is the letter sent today by Mr. Nacchio of Qwest to Mr. Trujillo of U S WEST: Qwest Communications International Inc. 700 Qwest Tower 555 Seventeenth Street Denver, Colorado 80202 June 13, 1999 Mr. Solomon D. Trujillo Chairman, President and Chief Executive Officer U S WEST, Inc. 1801 California Street Denver, Colorado 80202 Dear Sol: Qwest Communications International Inc. is pleased to offer to acquire all of U S WEST, Inc. for Qwest common stock. Qwest will pay 1.738 shares of Qwest common stock for each share of U S WEST common stock. Based on Friday's closing price for Qwest shares, our offer has a value of $78.00 per share. We are also announcing our offer to acquire Frontier Corporation in a stock and cash transaction valued at approximately $13.6 billion and, in the event that Frontier accepts our proposal and we enter into a merger agreement with Frontier, we will increase the consideration payable to U S WEST shareholders to 1.783 shares of Qwest common stock having a value of $80.00 per U S WEST share. If Frontier agrees to a business combination with us, our offer would represent a 25.4% premium to the value of U S WEST's proposed merger with Global Crossing Ltd. based on the closing price of Global Crossing's shares on Friday, a 45.8% premium to Friday's closing price of U S WEST and a 28.5% premium to the trading price of U S WEST prior to the announcement of its merger agreement with Global Crossing. If we do not conclude our business combination agreement with Frontier, our proposal would still represent a 22.2% premium to the value of U S WEST's proposed merger with Global Crossing, a 42.1% premium to Friday's closing price of U S WEST and a 25.3% premium to the trading price of U S WEST prior to the announcement of its merger agreement with Global Crossing. 8 Neither of our acquisition proposals is conditioned upon the success of the other proposal and Qwest is prepared to enter into a binding agreement with U S WEST whether or not we conclude our transaction with Frontier. Upon consummation of the transaction, we will invite you to become Vice Chairman of the Qwest Board and we would expect to invite up to four members of the current U S WEST Board, including you, to join the Qwest Board. The combination of our two companies will allow us to combine the management talents of both organizations. We expect an extremely smooth transition given the fact that we are -- and will remain -headquartered in Denver. The combination of our two companies is truly a powerful opportunity for our respective shareholders, employees and customers. The combination will accelerate the delivery of Internet-based broadband communications services to a large customer base and, by bringing together the network infrastructure, applications and services as well as the customer distribution channels of our companies, will create a truly worldwide internet communications powerhouse. We believe that the combination will result in significant operating synergies, aggregating approximately $9.1 billion to $10.1 billion through the year 2005 from our combination and $14 billion through the year 2005 from a combination of U S WEST, Frontier and Qwest. These synergies are comprised of (i) incremental revenues as the combined company expands its local, data, IP and long-distance service; (ii) operating cost savings in areas such as network operations and maintenance, sales and marketing, billing, customer and back office support as well as in procurement efficiencies; and (iii) capital savings by eliminating duplication of the companies planned network buildouts and in other infrastructure and back-office areas. We are prepared to meet with you to discuss the analysis performed by us that underlies these synergies and demonstrates their feasibility. Our analysis of synergies is based on our analysis of information concerning you that is publicly available, and we would expect that working with you we could identify significantly greater synergies resulting from a combination of our two companies. Our proposal is financially superior to your pending transaction with Global Crossing. Not only will your shareholders receive a higher price for their U S WEST shares in a simpler transaction structure, but they will also receive a superior stock reflecting Qwest's premier assets, management's operating record, strong growth prospects and the greater realizable synergies resulting from our combination. Qwest's principal shareholder has indicated its readiness to enter into a voting agreement concerning its obligation to vote in favor of the merger at the meeting of Qwest shareholders comparable to the agreement entered into by Global Crossing's controlling shareholders. We are confident of our ability to complete this transaction as quickly as the proposed Global Crossing merger. Our legal advisors are confident of our ability to 9 obtain all necessary approvals in a timely manner and we are prepared to commit to take steps, including disposition of certain operations, required to obtain such consents. Our offer will be tax-free to U S WEST shareholders and we can provide tax treatment and tax consequences of our proposed transaction equivalent to those of the Global Crossing transaction. We believe that our merger is fully consistent with the policy underlying the Telecommunications Act of 1996 and is strongly in the public interest. While obtaining regulatory approval under Section 271 of the Telecommunications Act is not a condition of the closing of our transaction, we would ask you to make the same commitments you have made in connection with the Global Crossing transaction to accelerate the process of obtaining such approval. Given the clear superiority of our offer to the proposed Global Crossing merger, we would like to meet with you and your advisors as soon as possible to finalize a definitive agreement between our companies. The offer is, of course, subject to entering into such an agreement. In this regard, we are ready to enter into a merger agreement substantially similar to the Global Crossing agreement. A copy of the proposed merger agreement is attached to this letter. We are also ready to exchange confidential information. Qwest is committed to bringing the combination between our companies to a successful conclusion and we would be delighted to discuss any aspect of our proposal. We look forward to meeting at the earliest opportunity to conclude this mutually beneficial transaction for both our companies. Please forward to us the form of confidentiality agreement we are required to execute to further this matter. In addition, we and our advisors will be happy to meet with U S WEST at the time of your choosing to answer any questions about our proposal. A list of persons who may be contacted at Qwest and at our financial and legal advisors is attached to this letter. Sincerely, Joseph P. Nacchio # # # The following is the letter sent today by Mr. Nacchio of Qwest to Mr. Clayton of Frontier: Qwest Communications International Inc. 700 Qwest Tower 555 Seventeenth Street Denver, Colorado 80202 June 13, 1999 Mr. Joseph P. Clayton 10 Chief Executive Officer Frontier Corporation 180 South Clinton Avenue Rochester, New York 14646 Dear Joe: Qwest Communications International Inc. is pleased to offer to acquire all of Frontier Corporation for cash and Qwest common stock. Qwest will pay $20 in cash and 1.181 shares of Qwest common stock for each share of Frontier common stock. Based on Friday's closing price for Qwest shares, our cash and stock offer has a value of $73.00 per Frontier share. We are also announcing our offer to acquire U S WEST, Inc. in a stock-for-stock transaction having total equity market value of approximately $41.3 billion and, in the event that U S WEST accepts our proposal and we enter into a merger agreement with U S WEST, we will increase the consideration payable to Frontier shareholders to $20 in cash and 1.226 shares of Qwest common stock having a total value of $75.00 per Frontier share. The stock portion of our offer will be tax-free to Frontier shareholders. If U S WEST agrees to a business combination with us, our offer would represent a 19% premium to the value of Frontier's proposed merger with Global Crossing Ltd. based on the closing price of Global Crossing's shares on Friday, a 35.3% premium to Friday's closing price of Frontier and a 68.1% premium to the trading price of Frontier prior to the announcement of its merger agreement with Global Crossing. If we do not conclude our business combination agreement with U S WEST, our proposal would still represent a 15.9% premium to the value of Frontier's proposed merger with Global Crossing, a 31.7% premium to Friday's closing price of Frontier and a 63.6% premium to the trading price of Frontier prior to the announcement of its merger agreement with Global Crossing. Neither of our acquisition proposals is conditioned upon the success of the other proposal and Qwest is prepared to enter into a binding agreement with Frontier whether or not we conclude our transaction with U S WEST. Upon consummation of the transaction, we will invite up to two of Frontier's current directors, including you, to join the Qwest Board. The combination of our two companies is truly a powerful opportunity for our respective shareholders, employees and customers. The combination will accelerate the delivery of Internet-based broadband communications services to a large customer base and, by bringing together the network infrastructure, applications and services as well as the customer distribution channels of our companies, will create a truly worldwide internet communications powerhouse. We believe that the combination will result in significant operating synergies, aggregating approximately $4 billion to $4.5 billion through the year 2005 from our combination and $14 billion through the year 2005 from a combination of U S WEST, 11 Frontier and Qwest. These synergies are comprised of (i) incremental revenues as the combined company expands its local, data, IP and long-distance service; (ii) operating cost savings in areas such as network operations and maintenance, sales and marketing, billing, customer and back office support as well as in procurement efficiencies; and (iii) capital savings by eliminating duplication of the companies planned network buildouts and in other infrastructure and back-office areas. We are prepared to meet with you to discuss the analysis performed by us that underlies these synergies and demonstrates their feasibility. Our analysis of synergies is based on our analysis of information concerning you that is publicly available, and we would expect that working with you we could identify significantly greater synergies resulting from a combination of our two companies. Our proposal is financially superior to your pending transaction with Global Crossing. Not only will your shareholders receive a higher price for their Frontier shares in a simpler transaction structure, but they will also receive a superior stock reflecting Qwest's premier assets, management's operating record, strong growth prospects and the greater realizable synergies resulting from our combination. Qwest's principal stockholder has indicated its readiness to enter into a voting agreement concerning its obligation to vote in favor of the merger at the meeting of Qwest shareholders comparable to the agreement entered into by Global Crossing's controlling shareholders. We are confident of our ability to complete this transaction as quickly as the proposed Global Crossing merger. Our offer contains no financing contingencies. Qwest has received financing commitments from Donaldson, Lufkin & Jenrette Capital Funding, Inc. and from Bank of America, NT & SA to supplement its existing cash reserves for the purpose of funding the cash portion of the consideration to be paid to Frontier shareholders and to pay the transaction fees and expenses. We believe that our merger is fully consistent with the policy underlying the Telecommunications Act of 1996 and is strongly in the public interest. Our legal advisors are confident of our ability to obtain all necessary approvals in a timely manner. Given the clear superiority of our offer to the proposed Global Crossing merger, we would like to meet with you and your advisors as soon as possible to finalize a definitive agreement between our companies. The offer is, of course, subject to entering into such an agreement. In this regard, we are ready to enter into a merger agreement substantially similar to the Global Crossing agreement. A copy of the proposed merger agreement is attached to this letter. We are also ready to exchange confidential information immediately. Qwest is committed to bringing the combination between our companies to a successful conclusion and we would be delighted to discuss any aspect of our proposal. We look forward to meeting at the earliest opportunity to conclude this mutually beneficial transaction for both our companies. Please forward to us the form of 12 confidentiality agreement we are required to execute to further this matter. In addition, we and our advisors will be happy to meet with Frontier at any time to answer any questions about our proposal. A list of persons who may be contacted at Qwest and at our financial and legal advisors is attached to this letter. Sincerely, Joseph P. Nacchio # # # Qwest's Offers Are Superior More Shareholder Value, Real Synergies, Strong Strategic Fit, Simple Structure o For USWEST: - 25% premium over current offer - Stronger currency - Greater realizable synergies - Better fit with Qwest assets and strategic direction o For Frontier - 19% premium over current offer - Stronger stock plus cash component - Leading combined internet/ hosting assets - Simple deal structure - Better fit with Qwest's assets and strategic direction o Qwest has demonstrated abilities to execute (more) 13 QWEST AT A GLANCE Qwest Combined Standalone Companies Revenue (2000) $4.65 billion $22 billion EBITDA (2000) $1.1 billion $8 billion Customers 4 million 31 million Employees 8,500 71,000 U.S. Route Miles 18,815 79,200 U.S. Fiber Miles 900,000 2.9 million Global Fiber Miles 1.3 million 3.35 million Cyber Centers 7 23 Local Broadband Markets 40 75 DSL Lines -- 35,000 PCS Subscribers -- 220,000 (end of document) EX-99.2 3 ANALYST PRESENTATION OF THE REGISTRANT [Qwest LOGO] ride the light [sm] Qwest - -------------------------------------------------------------------------------- [Qwest LOGO] This presentation contains forward-looking statements that involve risks and uncertainties. These statements may differ materially from actual future events or results. Readers are referred to the documents filed by Qwest with the SEC, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. These materials include analysts' estimates and other information prepared by third parties for which Qwest assumes no responsibility. In addition, certain statements regarding synergies and other projections and information contained in this presentation are based on publicly available information regarding U S West and Frontier. Qwest undertakes no obligation to review or confirm analysts' expectations or estimates or such publicly available information or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. The Qwest logo is a registered trademark of Qwest Communications International Inc. in the U.S. and certain other countries. - -------------------------------------------------------------------------------- [Qwest LOGO] Joseph P. Nacchio Chairman and Chief Executive Officer - -------------------------------------------------------------------------------- [Qwest LOGO] We are announcing [U S WEST Logo] o A superior offer to U S WEST shareholders for a merger with Qwest [Frontier o A superior offer to Frontier shareholders for a merger Logo] with Qwest - -------------------------------------------------------------------------------- [Qwest LOGO] The Announcement [Qwest LOGO] [U S WEST Logo] [Frontier Logo] Creating an $87 Billion Worldwide Communications Powerhouse - -------------------------------------------------------------------------------- [Qwest LOGO] Why Combine These Companies? o Expands and accelerates the Qwest growth strategy -- worldwide deployment of broadband Internet services by adding more: -- Scale economies - size matters -- Worldwide fiber backbone - fortify position -- Broadband local access - direct access to customers -- IP / Value-added data services - multimedia and ASP -- Distribution and customers - reach more markets - -------------------------------------------------------------------------------- [Qwest LOGO] A Bigger and Stronger Company Stand Alone Combined ----------- -------- 2000 Estimates - Revenue $4.65B $22B - EBITDA $1.1B $8B o Customers 4M 31M o Employees 8,500 71,000 o Market Cap $36B $87B (6/11/99) - -------------------------------------------------------------------------------- [Qwest LOGO] An Even Larger Network Presence Stand Alone Combined ----------- -------- o U.S. Route Miles 18.8K 79.2K o U.S. Fiber Miles 900K 2.9M o U.S. MSAs On-net 150 175 o Europe Route Miles 2.1K 2.1K o Europe Fiber Miles 100K 100K o Trans-Oceanic 67 Gbps 67 Gbps o Global Fiber Miles 1.3M 3.35M - -------------------------------------------------------------------------------- [Qwest LOGO] Expands Broadband Local Access Stand Alone Combined ----------- -------- o Total Markets Covered 40 75 o Metro Fiber Rings 19 35 o Access Lines - 17M o DSL Lines - 35,000 o DSL Markets 31 45 o Fixed Wireless Markets 40 40 o PCS Customers - 220,000 - -------------------------------------------------------------------------------- [Qwest LOGO] Expands Service Line Stand Alone Combined ----------- -------- o Hosting Centers 7 23 o OC-48 IP Miles 50,000 110,000 o Data/IP Solutions QIMM QIMM GlobalCenter !nterprise o IP Employees 550 2,100 - -------------------------------------------------------------------------------- [Qwest LOGO] Strong Regional Presence [MAP OF US LISTING LARGE CORPORATIONS THAT HAVE HEADQUARTERS IN U S WEST AREAS AND PRINCIPAL FRONTIER SERVICE AREA] Microsoft, Boeing, Costco, Safeco, Weyerhaeuser, Nordstrom, Airborne Freight, Nike, Pacificorp, American Stores, Miicroage, Phelps Dodge, ConAgra, IBP, Berkshire Hathaway, Mutual of Omaha, Sun Healthcare, Dayton Hudson, United Healthcare, Northwest Airlines, General Mills, Best Buy, 3M, Maytag, Principal Financial, KN Energy, Ball Corp, Corporate Express, Bausch & Lomb, Cabletron, Kodak, Xerox - -------------------------------------------------------------------------------- [Qwest LOGO] Robust U.S. Broadband Presence [MAP OF US HIGHLIGHTING U S WEST AND BELLSOUTH SERVICE AREAS AND ILLUSTRATING THE LOCATIONS THROUGHOUT THE US WHERE THE COMBINED COMPANY WOULD HAVE BROADBAND PRESENCE DIRECTLY OR THROUGH AFFILIATES] - -------------------------------------------------------------------------------- [Qwest LOGO] An Expanding Global Multimedia Network [MAP OF US, MEXICO, JAPAN AND EUROPE AND ATLANTIC AND PACIFIC OCEANS ILLUSTRATING INTERNATIONAL FIBER NETWORK OF THE COMBINED COMPANY] - -------------------------------------------------------------------------------- [Qwest LOGO] Superior Terms to Other Offers o Higher premiums o Stronger currency with substantial company assets and management team support o More value from greater realizable synergies o Simple transaction structures o Clear leadership o Integration experience -- higher probability of success - -------------------------------------------------------------------------------- [Qwest LOGO] U S WEST Proposal With Frontier Without Frontier Terms 1.783 Qwest Shares 1.738 Qwest Shares As of June 11 Value $80 $78 Premium to U S WEST price 46% 42% Premium to Other Offer 25% 22% - -------------------------------------------------------------------------------- [Qwest LOGO] Frontier Proposal With U S WEST Without U S WEST Terms 1.226 Qwest Shares 1.181 Qwest Shares + $20 Cash + $20 Cash As of June 11 Value $75 $73 Premium to Frontier price 35% 32% Premium to Other Offer 19% 16% - -------------------------------------------------------------------------------- [Qwest LOGO] Merger Process o Offers not conditioned upon each other o Conditions to Closing - Shareowner approval - Regulatory approval o Closing - Same timing as other offer - Close Frontier by year end 1999 - Close U S WEST by mid 2000 o Integration/synergy ramp up period 2H00-2001 - -------------------------------------------------------------------------------- [Qwest LOGO] Robert S. Woodruff Executive Vice President and Chief Financial Officer - -------------------------------------------------------------------------------- [Qwest LOGO] New Large Cap Growth Company o $87B market capitalization o Pro forma revenue goes to $22B - Post 271 growth of 15-17% o Pro forma EDITDA goes to $8B - Post 271 growth of 20%+ o EPS accretive first year after close o Growth in shareholder value - -------------------------------------------------------------------------------- [Qwest LOGO]) Large Cap Growth Company Market Cap Revenue Growth ---------- ------- ------ Qwest Combined $87B $22B 15-18% General Electric $330B $101B 14% Wal-Mart $190B $142B 17% MCIWorldcom $165B $30B 17% Merck $160B $28B 14% - -------------------------------------------------------------------------------- [Qwest LOGO] Combined Pro Forma Revenue by Service Type [ ] Data/Internet [ ] Local Voice [ ] Long Distance [ ] PCS [ ] Other 2000E 2005E [GRAPHIC OMITTED] [GRAPHIC OMITTED] (Pie chart showing 18% Data/Internet, (Pie chart showing 46% Data/Internet, 1% PCS, 9% Other, 25% Long Distance, 3% PCS, 3% Other, 22% Long Distance, 47% Local Voice) 26% Local Voice) - -------------------------------------------------------------------------------- [Qwest LOGO] Synergies o Significant - $14B through 2005 o Real - specifically identified o Attainable - proven experience in delivering - -------------------------------------------------------------------------------- [Qwest LOGO] Synergy Summary - Combined 2002 5 Year Total Revenue (EBITDA Impact) $200-300 $2,900-3,100 Network/Operations $350-450 $2,200-2,400 SG&A $550-750 $4,500-4,700 Capital $700-800 $3,800-4,000 -------- ------------ Total $1,800-2,300 $13,400-14,200 ($millions) o Synergy ramp to full year impact in 2002 o Real synergies based on identified cost, capital savings, and revenue enhancement - -------------------------------------------------------------------------------- [Qwest LOGO] Synergy Summary - U S WEST 2002 5 Year Total Revenue (EBITDA Impact) $200-250 $2,600-2,750 Network/Operations $250-300 $1,600-1,700 SG&A $400-550 $2,900-3,000 Capital $400-450 $2,200-2,300 -------- ------------ Total $1,250-1,550 $9,300-9,750 ($millions) - -------------------------------------------------------------------------------- [Qwest LOGO] Synergy Summary - Frontier 2002 5 Year Total Revenue (EBITDA Impact) $0-50 $300-350 Network/Operations $100-150 $600-700 SG&A $150-200 $1,600-1,700 Capital $300-350 $1,600-1,700 -------- ------------ Total $550-750 $4,100-4,450 ($millions) - -------------------------------------------------------------------------------- [Qwest LOGO] Synergy Components o Revenue - Local revenue enhancement - Aggressive data expansion - IP and value-added services - Long distance o Network Cost - Network operations and maintenance - Access and transport - -------------------------------------------------------------------------------- [Qwest LOGO] Synergy Components o SG&A - Billing and customer support solutions - Back office support consolidation - Distribution channel effectiveness - Procurement efficiencies o Capital - Duplicative network buildout - Infrastructure and back office duplication - -------------------------------------------------------------------------------- [Qwest LOGO] The Right Transactions by the Right Team for the Right Reasons - -------------------------------------------------------------------------------- [Qwest LOGO] In Summary: It's About Growth o Growth in Scale o Growth in Scope o Growth in Revenue o Growth in EBITDA o Growth in Opportunity o GROWTH IN SHAREHOLDER VALUE - -------------------------------------------------------------------------------- [Qwest LOGO] ride the light [logo](SM) Qwest(R) -----END PRIVACY-ENHANCED MESSAGE-----