AYE » Topics » Alleghenys substantial debt could adversely affect its ability to operate successfully and meet contractual obligations.

This excerpt taken from the AYE 10-K filed Mar 1, 2006.

Allegheny’s substantial debt could adversely affect its ability to operate successfully and meet contractual obligations.

 

Although Allegheny reduced debt by approximately $1.9 billion between December 1, 2003 and December 31, 2005 and plans to continue its debt reduction program, Allegheny still has substantial debt. At December 31, 2005, Allegheny had $4.1 billion of debt on a consolidated basis. Approximately $199.0 million of that amount represented AE’s obligations, $2.4 billion represented debt of AE Supply and AGC and the remainder constituted debt of one or more of the Distribution Companies.

 

Allegheny’s substantial debt could have important consequences to it. For example, it could:

 

    make it more difficult for Allegheny to satisfy its obligations under the agreements governing its debt;

 

    require Allegheny to dedicate a substantial portion of its cash flow to payments on its debt, thereby reducing the availability of its cash flow for working capital, capital expenditures and other general corporate purposes;

 

    limit Allegheny’s flexibility in planning for, or reacting to, changes in its business, regulatory environment and the industry in which it operates;

 

    place Allegheny at a competitive disadvantage compared to its competitors that have less debt;

 

    limit Allegheny’s ability to borrow additional funds; and

 

    increase Allegheny’s vulnerability to general adverse economic, regulatory and industry conditions.

 

This excerpt taken from the AYE 10-K filed Mar 10, 2005.

Allegheny’s substantial debt could adversely affect its ability to operate successfully and meet contractual obligations.

 

Allegheny is substantially leveraged. One of its principal challenges is to manage its debt while continuing the long-term process of reducing the amount of its debt. At December 31, 2004, Allegheny had $5.0 billion of debt on a consolidated basis (including discontinued operations). Approximately $700 million of that amount represented AE’s obligations, $2.8 billion represented debt of AE Supply and AGC and the remainder constituted debt of one or more of the Distribution Companies.

 

Allegheny’s substantial debt could have important consequences to it. For example, it could:

 

    make it more difficult for Allegheny to satisfy its obligations under the agreements governing its debt;

 

9


Table of Contents
    require Allegheny to dedicate a substantial portion of its cash flow from operations to payments on its debt, thereby reducing the availability of its cash flow for working capital, capital expenditures and other general corporate purposes;

 

    limit Allegheny’s flexibility in planning for, or reacting to, changes in its business, regulatory environment and the industry in which it operates;

 

    place Allegheny at a competitive disadvantage compared to its competitors that have less debt;

 

    limit Allegheny’s ability to borrow additional funds; and

 

    increase Allegheny’s vulnerability to general adverse economic, regulatory and industry conditions.

 

EXCERPTS ON THIS PAGE:

10-K
Mar 1, 2006
10-K
Mar 10, 2005
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki