DENVER -- Qwest Communications (NYSE: Q - News) today reported financial results for the fourth quarter and full year 2009. In the quarter, the company reported solid growth in business and consumer data services, continued to produce strong cash flows and made significant progress on key initiatives.

In the fourth quarter, net income was $108 million. Earnings per share were 6 cents compared to 10 cents in the fourth quarter 2008. The current quarter’s earnings per share results include a 2 cent charge for severance cost. Results in the prior-year period include a 1 cent charge for severance. Full year 2009 earnings per share were 38 cents compared to 37 cents in 2008. Full year 2008 earnings per share results include 3 cents of net one-time charges. One-time items had a net neutral impact on 2009 full year results.

Fourth quarter consolidated net operating revenues declined 10 percent compared to the fourth quarter 2008. After excluding the effects of the company’s transition to a new wireless business model, revenue declined 7 percent year over year. Reported net operating revenues declined 2 percent sequentially from the third quarter and declined 1 percent sequentially after adjusting for the change in the wireless business model. Full year 2009 revenues declined 9 percent on a reported basis and decreased 6 percent after adjusting for the change in the wireless business model.

Adjusted EBITDA for the quarter was $1.09 billion compared to $1.18 billion in the fourth quarter 2008. The current quarter’s results include $44 million of incremental non-cash pension and OPEB expenses compared to the fourth quarter 2008. Full year adjusted EBITDA was $4.4 billion compared to $4.5 billion in 2008. After eliminating the impacts of an incremental $210 million in non-cash pension and OPEB expense in 2009, adjusted EBITDA increased 2 percent compared to full year 2008.

The adjusted EBITDA margin was 36.2 percent in the quarter, an improvement of 60 basis points compared to the fourth quarter 2008 and a 40 basis point sequential improvement. Full year 2009 adjusted EBITDA margin of 35.9 percent is a 220 basis point improvement from 2008. Excluding the impacts of incremental non-cash pension related expenses, full year consolidated margin improved 390 basis points.

In the fourth quarter, adjusted free cash flow was $506 million. Full year adjusted free cash flow totaled $1.93 billion compared to $1.44 billion in 2008. The increase in adjusted free cash flow in 2009 was due to both higher cash from operating activities and lower capital expenditures. Full year adjusted free cash flow performance in 2009 was at its highest level since Qwest’s merger with U S WEST in 2000.

Qwest continued to make strong progress on key initiatives in the fourth quarter. The Business Markets segment again reported strong growth in IP services revenues. The company completed a successful migration of its wireless services from the Sprint network to the Verizon Wireless platform, finishing the quarter with nearly 850,000 wireless users. Qwest continued to aggressively deploy fiber to the node (FTTN) capabilities in the quarter, and services are now available to more than 3.5 million residential households. In the quarter, 80,000 customers added high speed Internet services that utilize the fiber network. The company made good progress on retention efforts in the consumer market in the quarter with the absolute number of access line losses at their lowest level in two years. In the fourth quarter, Qwest also signed contracts to deliver fiber-based backhaul services for wireless companies. In total, the company has nearly 2,000 cell sites under contract with most of these expected to be built out in 2010.

“In the quarter, we continued to create innovative approaches to drive efficiency and perfect the customer experience,” said Edward A. Mueller, Qwest chairman and CEO. “Throughout 2009, the Qwest team stood up to the challenges of a tough economy and highly competitive markets to deliver value for our shareholders. In particular, we did an excellent job of generating cash flows and strengthening the balance sheet. In 2010, our goal is to continue to excel in these areas while adding improved revenue performance to our list of achievements. We continue to be optimistic about our prospects in the coming year.”

Qwest Communications International Inc. (NYSE: Q)