Results for the quarter demonstrate Qwest’s strong position in the industry and our ability to execute the business plan, said Joseph P. Nacchio, Qwest chairman and CEO. With the initial integration of the merger successfully completed, we are on track to meet our expected growth rates.
Fourth quarter revenue of $5.02 billion was a 9.9 percent increase over pro forma normalized fourth quarter 1999. The revenue growth was driven by strong demand for Internet and data services, which increased by almost 40 percent in the quarter. Wireless services revenue grew 90 percent in the quarter to almost $150 million with more than 805,000 customers at year-end. Commercial services revenue increased more than 19 percent, while consumer and small business services generated revenue growth of more than five percent. Total 2000 pro forma normalized revenue increased 14.2 percent to $18.95 billion from pro forma normalized 1999 revenue of $16.59 billion. Internet and data services, a high-growth segment for Qwest, grew more than 60 percent in 2000.
Fourth quarter EBITDA grew 19.7 percent to $1.99 billion as EBITDA margins improved 330 basis points to 39.6 percent in the fourth quarter of 2000 from 36.3 percent in fourth quarter of 1999. The increase in EBITDA margins resulted from an improved product mix, cost controls, network efficiencies and merger synergies. Pro forma normalized 2000 EBITDA increased more than 17.3 percent to $7.37 billion as EBITDA margins improved to 38.9 percent in 2000 from 37.9 percent in 1999. The EBITDA improvement was achieved despite significant investments in growth areas such as hosting, local broadband access, Internet and data services, and service improvements.
On a pro forma normalized basis and excluding non-recurring items, Qwest’s fourth quarter net earnings of $270 million grew by 43.6 percent over fourth quarter 1999. Earnings per share (EPS) grew by 45.5 percent to $0.16 per diluted share. For the year, net income of $1.00 billion increased 53.6 percent over 1999, while 2000 EPS of $0.59 per diluted share grew 51.3 percent over 1999 EPS of $0.39 per diluted share. The non-recurring items are composed of merger-related charges and gains and losses related to certain minority investments and assets.
