DENVER -- Qwest Communications International Inc. (NYSE: Q) today reported solid first quarter results highlighted by positive earnings per share, revenue growth, and continued margin expansion. For the quarter, Qwest reported earnings of $88 million, or $0.05 per fully diluted share, compared with $57 million, or $0.03 per share in the first quarter 2005, which included a $257 million, or $0.14 per share, gain on the sale of wireless assets.

“Qwest has started the year with strong momentum, posting both solid operating and financial performance for the first quarter and achieving important operating milestones resulting in positive earnings per share,� said Richard C. Notebaert, Qwest chairman and CEO.

Financial Results

Qwest's first quarter revenue of $3.5 billion increased 0.8 percent compared to the first quarter a year ago. Revenue trends improved as a result of strong sales within Qwest's portfolio of mass market bundles and growth products, including high-speed Internet, advanced data products, long distance and wireless.

"Revenue growth, improved ARPU and continued cost containment have resulted in a 200 basis point improvement first quarter over first quarter in our adjusted EBITDA moving the margin to 31 percent," said Oren G. Shaffer, Qwest vice chairman and CFO.

Qwest's operating expenses declined 4 percent to $3.1 billion for the first quarter of 2006 over the first quarter of 2005 as a result of improvement in productivity and operating efficiencies, optimization initiatives in facility costs and lower depreciation.

Capital Spending, Cash Flow and Interest

First quarter capital expenditures totaled $390 million, compared to $313 million in the first quarter of 2005, with a continued increase in the proportion spent on broadband, enabling higher speeds and footprint expansion. Capital spending in 2006 is expected to be at or slightly above 2005 levels as the company continues to focus in a disciplined fashion on investment in key growth areas and to support the highest service levels.

Free cash flow benefited from improved operating results, offset by anticipated seasonal and one-time items in the quarter. Cash generated from operations was $140 million in the first quarter, which includes a one-time previously announced payment of $100 million for shareholder litigation, as well as $250 million related to employee bonuses and payroll timing. Qwest continues to expect to grow free cash flow by an incremental $450 to $600 million in 2006 (before one-time payments), benefiting primarily from improved operating results and reduced interest expense.

Interest expense totaled $296 million for the first quarter compared to $381 million in the year-ago quarter. As a result of successfully tendering for and retiring high coupon legacy debt in the fourth quarter of last year, interest expense is expected to be reduced by approximately $300 million in 2006.

Balance Sheet Update

The company ended the quarter with total debt of $15.4 billion, a decline of $1.9 billion compared with the first quarter a year ago, and $740 million in cash and short-term investments.

Qwest Communications International Inc. (NYSE: Q)