Citizens Communications Announces Further Progress on Utility Sales and Third-Quarter Write Down.Business Editors STAMFORD, Conn.--(BUSINESS WIRE)--Oct. 29, 2002 Citizens Communications Citizens Communications is the parent company of Frontier Telephone, providing telephone and internet access in 24 states. The company headquarters are located at 3 High Ridge Park in Stamford, Connecticut. (NYSE NYSE See: New York Stock Exchange :CZN, CZB) announced today that it has entered into definitive agreements to sell its Arizona Gas and Arizona Electric divisions to UniSource Energy Corporation (NYSE:UNS Uns The symbol for the element unnilseptium. ) for $230 million in cash, subject to customary adjustments under the terms of the agreements. The transaction is expected to close during the second half of 2003 and is subject to regulatory and other customary approvals. In connection with this transaction, Citizens' third quarter 2002 results, which will be reported on Nov. 7, 2002, will include non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. associated with write downs of the carrying values Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of the Arizona Gas and Electric assets. In the aggregate, Citizens has recorded pre-tax gains of approximately $448 million on previously completed sales of utilities. Citizens will have generated $1.8 billion of proceeds after the closing of the Arizona and Kauai Electric sales, which is equal to the company's original estimate for total proceeds from the divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of all of its utility divisions, with The Gas Company in Hawaii and Vermont Electric still remaining to be sold. Citizens will also record, in the third quarter, non-cash charges to reflect the difference between anticipated proceeds from the sale of these two remaining utility assets and their book values. In addition, as a result of a review of the carrying value of its Electric Lightwave division, Citizens has concluded it appropriate to record a non-cash charge to reflect a reduction of the carrying value of the plant, property and equipment of Electric Lightwave to approximately $185 million. Citizens' Electric Lightwave division will continue to serve its customers, providing the same level of high-quality telecommunications services. The aggregate of all of these items will result in non-cash charges for the third quarter of approximately $700 million net of tax benefits. After giving effect to these charges, Citizens will remain in compliance with all provisions of its debt agreements. Citizens also expects to complete the sale of its Kauai Electric division during the fourth quarter of 2002 for $215 million in cash. The sale price is approximately equal to carrying value. Citizens will apply the net cash proceeds from the sales of Kauai Electric and Arizona Electric and Gas to its ongoing program of debt reduction. Through Sept. 30, Citizens had retired approximately $718 million of its debt during 2002. Citizens Communications Inc. provides telecommunications services to approximately 2.5 million access lines in 24 states. More information about Citizens can be found at www.czn.net. UniSource Energy's TEP TEP Tucson Electric Power TEP Tomographie par Emission de Positons (French: Nuclear medicine imaging) TEP Technical Evaluation Panel TEP The English Patient (movie) TEP Transportation Enhancement Program subsidiary is Arizona's second-largest investor-owned electric utility company and provides service to over 300,000 customers in Arizona. Its other subsidiaries include Advanced Energy Technologies, Inc., a developer of renewable energy Renewable energy utilizes natural resources such as sunlight, wind, tides and geothermal heat, which are naturally replenished. Renewable energy technologies range from solar power, wind power, and hydroelectricity to biomass and biofuels for transportation. and distributed generation Distributed generation generates electricity from many small energy sources. It has also been called also called on-site generation, dispersed generation, embedded generation, decentralized generation, decentralized energy or technologies, and Southwest Energy Solutions, a regional electric contractor. More information about UniSource can be found at their web site, www.unisourceenergy.com. |
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