Printer Friendly

U S WEST COMMUNICATIONS 'AA-' DEBT AFFIRMED BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Sept. 17 /PRNewswire/ -- U S WEST Communications Inc. `AA-' debentures and notes are affirmed by Fitch. The action follows the company's announcement today of a $3.2 billion non-cash after-tax charge and a $610 million charge to streamline telephone operations and reduce staffing levels by 9,000 jobs. Fitch believes that the $3.2 billion charge will bring depreciation rates more in line with competitive reality. The staff reduction and related facility closings will also position the company to manage costs more effectively and maintain long- term earnings strength. Approximately $3.5 billion in debt is affected. The credit trend is stable.
 The move to accelerated depreciation rates will not impact cash flow. The charges for the job cuts and streamlining will have some near- term cash flow impact. However, Fitch believes that USWC's current financial and operating position will allow the company to maintain credit quality at levels appropriate for the rating. The staff reductions and restructuring will position the company to control operating costs and thereby sustain solid profit margins over the next several years. Under the USWC plan, copper wire will be depreciated over 15 years, rather than over an average 27 years. Depreciable lives for digital switches will be shortened to 10 years from the current 18 years. Fitch does not expect that these changes will result in near-term changes in the price of telephone service to business and residential customers. However, these charges are a clear acknowledgment and a clear signal to regulators that there will be continued competitive pressure on basic telephone operations. USWC provides local and toll telephone service in 14 western states.
 The $610 million after-tax charge reflects, in part, staff reductions, costs involved in closing some facilities, including business operation centers, and implementation of more efficient systems for billing, operating support, and network monitoring. USWC had approximately 39 employees per 10,000 access lines at year-end 1992. The additional staff reductions announced today will allow further significant improvement in operating efficiency.
 -0- 9/17/93
 /CONTACT: Timothy Cain of Fitch, 212-908-0587/


CO: U S WEST Communications Inc. ST: IN: TLS SU: RTG

CK -- NY027 -- 3129 09/17/93 13:57 EDT
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Sep 17, 1993
Words:362
Previous Article:NUVEEN CALIFORNIA PREMIUM INCOME MUNICIPAL FUND 2 IPO TRADES ON THE AMERICAN STOCK EXCHANGE
Next Article:CHASE AND MELLON ANNOUNCE AGREEMENT ON PRIVATE LABEL CASH MANAGEMENT SERVICES FOR BANKS IN THE UNITED STATES
Topics:

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters