NEW YORK - Verizon Communications (VZ:NYSE) today said that recent regularly scheduled meetings with its rating agencies have reaffirmed its commitment to a debt portfolio strategy that includes a reduction in overall debt, a reduction in short-term debt and an increase in the percent of commercial paper backed by bank lines of credit.
Earlier today, Standard & Poor's, Moody's and Fitch all reaffirmed their ratings of Verizon (A+, A1 and A+, respectively), citing debt-reduction and portfolio management strategies that the company says it will continue in 2002 as necessary to maintain those ratings.
To reduce overall debt, Verizon reiterated plans to apply proceeds from $2.8 billion in wireline asset sales, as well as from sales of other non-strategic assets, to debt reduction in 2002. In addition, as previously announced, the company plans to reduce capital spending requirements from $17.4 billion in 2001 to $15-$16 billion in 2002.
To reduce short-term borrowings, Verizon said that current plans are to decrease its commercial paper during 2002, from $12.8 billion at year-end 2001. This also will increase the percent of commercial paper backed by bank lines of credit. As of year-end 2001, Verizon had approximately $7.9 billion of unused bank lines of credit and additional cash to back its commercial paper, not taking into account the $1.7 billion deposit with the Federal Communications Commission in connection with NextWave licenses in dispute.
Verizon said its current plans put the company on target for S&P to positively revise the company's outlook in the future, as outlined in S&P's report.
Fitch, meanwhile, in its affirmation of Verizon's long-term ratings, cited Verizon's "stable operating performance, significant scale and scope in its domestic wireline and wireless businesses, and management's commitment" to de-leverage its balance sheet over the near future.
Moody's, in affirming Verizon's long-term ratings and outlook, noted that Verizon has "improved its liquidity profile over the last 12 months by reducing short-term debt and extending average commercial paper maturities."
Verizon Communications (NYSE:VZ) is one of the world's leading providers of communications services. Verizon companies are the largest providers of wireline and wireless communications in the United States, with 132.1 million access line equivalents and 29.4 million wireless customers. Verizon is also the largest directory publisher in the world. A Fortune 10 company with more than $67 billion in annual revenues and approximately 247,000 employees, Verizon's global presence extends to more than 40 countries in the Americas, Europe, Asia and the Pacific. For more information on Verizon, visit www.verizon.com.
NOTE: This press release contains statements about expected future events and financial results that are forward-looking and subject to risks and uncertainties. For those statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The following important factors could affect future results and could cause those results to differ materially from those expressed in the forward-looking statements: the duration and extent of the current economic downturn; materially adverse changes in economic conditions in the markets served by us or by companies in which we have substantial investments; material changes in available technology; an adverse change in the ratings afforded our debt securities by nationally accredited ratings organizations; the final outcome of federal, state, and local regulatory initiatives and proceedings, including arbitration proceedings, and judicial review of those initiatives and proceedings, pertaining to, among other matters, the terms of interconnection, access charges, and unbundled network element and resale rates; the extent, timing, success, and overall effects of competition from others in the local telephone and toll service markets; the timing and profitability of our entry and expansion in the national long-distance market; our ability to satisfy regulatory merger conditions and obtain combined company revenue enhancements and cost savings; the profitability of our broadband operations; the ability of Verizon Wireless to achieve revenue enhancements and cost savings, and obtain sufficient spectrum resources; the continuing financial needs of Genuity Inc., our ability to convert our ownership interest in Genuity into a controlling interest consistent with regulatory conditions, and Genuity's ensuing profitability; our ability to recover insurance proceeds relating to equipment losses and other adverse financial impacts resulting from the terrorist attacks on Sept. 11, 2001; and changes in our accounting assumptions that regulatory agencies, including the SEC, may require or that result from changes in the accounting rules or their application, which could result in an impact on earnings.