Sep, 2001 : Verizon Expects to Recoup Network Damage Costs

📅 September 18, 2001 - Verizon Communications (verizon.com), the dominant localtelephone company in the Northeastern United States, said on Monday itexpects to recover, through insurance and federal aid, the costs ofrepairing networks damaged in the attack of the World Trade Center,according to Reuters reports.

Verizon declined to estimate the total bill for repairs, overtime, andreplacement equipment, but said the costs would not lead to higher pricesfor customers.
"We have insurance. When the World Trade Center was bombed in 1993, we didkeep all the requisite records and we worked with the insurance companiesand we did get recovery. And we expect the same thing to happen here,"Verizon co-chief executive Ivan Seidenberg said at a press briefing. "Thefederal government said there will be a process for us to file, likeeveryone else, to get recovery of costs. We will get our costs recovered. Wehave a chance to submit claims for even the lost revenues as part of thatprocess. Rates should not be affected," Seidenberg said.
Afer Tueday's attack, shares of Verizon closed down 90 cents, or 1.78percent, to $49.80 on the New York Stock Exchange amidst wide-scale marketweakness on the first day of trading after the four-day hiatus after theattacks.
The loss of service in part of Lower Manhattan would cost Verizon about $600million to $700 million a year, or 1 percent of the company's annualrevenues, said Salomon Smith Barney analyst Jack Grubman. The actual amountof lost revenues would be less since service will be restored quickly, hetold Reuters.
"Verizon should see no permanent impact to its balance sheet or cashposition, while frankly it will have upgraded some plant (equipment), albeitunder tragic circumstances," Grubman said. He expects the equipment andfacility damage to be less than $1 billion.
New York-based Verizon said the collapse of the World Trade Center damagedfacilities that serve the New York Stock Exchange and other businesses inManhattan, disrupting service to an unknown number of customers. The NYSEresumed operation on Monday, and Verizon said it aimed to gradually restoreto business and residential customers over the next two or three days.