May 30, 2012 / 2:47 PM / 5 years ago

TEXT-S&P on U.S. telecom cos' high dividend payouts

May 30 - Standard & Poor's Ratings Services said today that many U.S.
telecommunications companies, traditional wireline companies in particular, are
facing industry trends that will ultimately hurt free operating cash flow
generation and could make it challenging to maintain their aggressive financial
policies, according to a new report published on RatingsDirect earlier today
titled "A Matter of Policy: U.S. Telecom Companies Maintain High Dividend
Payouts, But For How Long?" 	
"Returning cash to shareholders through dividends and share buybacks and the 	
pressure to satisfy equity investors lessens their ability to pay back debt 	
and maintain or reduce leverage," said Standard & Poor's credit analyst Allyn 	
Arden in the report.	
"These companies may need to adopt more conservative financial policies and 	
reduce leverage to be able to maintain their current ratings down the line," 	
warned Mr. Arden.	
The report is available to subscribers of RatingsDirect on the Global Credit 	
Portal at If you are not a RatingsDirect 	
subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 	
or sending an e-mail to Ratings 	
information can also be found on Standard & Poor's public Web site by using 	
the Ratings search box located in the left column at

Our Standards:The Thomson Reuters Trust Principles.
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