SEC inquires about Qwest accounting

Qwest Communications today said it received an informal inquiry on Friday from the Securities and Exchange Commission related to three separate matters of its accounting policies.

The inquiry, which came from the SEC’s Denver regional office, relates to 2000 and 2001 revenue recognition and accounting treatment of IRU sales, the sale of equipment by Qwest to customers from which Qwest bought Internet services or to which Qwest contributed equity financing--such as equipment sales to KMC and Calpoint--and Qwest Dex, particularly changes in the production schedules and lives of some directories.

In a brief meeting with analysts this morning, Qwest CEO Joe Nacchio said the carrier will cooperate with the inquiry and it won’t affect the company’s ongoing plans to reduce its debt load.

“We don’t think this significantly affects our delivering or liquidity issues,” said Nacchio. “We still will proceed with asset sales. We will proceed with our bond sale tomorrow.”

Qwest also does not believe the inquiry--typically handled privately--will force the company to restate revenues or EBITDA for either year.

--Vince Vittore, executive editor