T R O U B L E D C O M P A N Y R E P O R T E R Friday, January 23, 2004, Vol. 8, No. 16 Headlines 4902 DUVAL CONDOMINIUMS: Voluntary Chapter 11 Case Summary ABITIBI-CONSOLIDATED: Will Publish 4th Quarter Results on Jan. 28 ACTRADE FINANCIAL: Successfully Emerges from Chapter 11 Process ACXIOM CORP: Reports Strong Third-Quarter Financial Results ADELPHIA COMMS: Fee Committee Brings-In Kronish Lieb as Counsel ADELPHIA: Deploys Sigma Systems' Service Management Portfolio AFC ENTERPRISES: Reports Improved Q4 2003 Performance Results ALLIED WASTE: Prices Unit's $825 Million Senior Debt Offering ALLIED WASTE: S&P Rates Unit's $825 Million Senior Notes at BB- ALLIED WASTE: Fitch Rates $28M Proposed Sr. Secured Notes at BB- ALLMERICA FINANCIAL: A.M. Best Ups First Allmerica's Low-B Rating AMERIGAS: Fitch Says UGI's Equity Acquisition Won't Affect Ratings AMERICAN HOMEPATIENT: W. Wayne Woody Elected to Board of Directors AMR CORP: Fourth-Quarter Net Loss Narrows to $111 Million ANC RENTAL: Sues 75 Vendors to Recover $1.6 Million in Transfers AURORA FOODS: Court Approves Debevoise as Committee's Counsel BARNEYS NEW YORK: Howard Socol Discloses 6.7% Equity Stake BMC INDUSTRIES: Receives Bank Waiver Extension through March 15 BOISE CASCADE: Frontier Resources Acquires Boise's Yakima Mills BOYD GAMING: Declares Quarterly Cash Dividend Payable on March 2 BOYD GAMING: Will Publish Fourth-Quarter Results on February 4 BRIDGEWATER: Case Summary & 20 Largest Unsecured Creditors BUDGET GROUP: Court Allows Payment of Linda Burch's Success Fee CANWEST GLOBAL: First-Quarter 2004 Results Show Solid Growth CRESCENT REAL: Reports Dividend Distributions Taxable Allocations CUMULUS MEDIA: Will Host 4th-Quarter Conference Call on Feb. 17 DDI CORP: Completes $16 Million Common Stock Private Placement DESC S.A.: Fitch Rates Foreign & Local Currency Rating at B+ DII INDUSTRIES: KBR Secures Nod to Assume Barracuda Agreements DIRECTV LATIN: Court Approves Buena Vista Claim Settlement Pact DONELLY'S HOME: Case Summary & 20 Largest Unsecured Creditors ELAN CORP: Raises $70 Million in Four Separate Transactions ENCOMPASS SERVICES: Has Until Feb. 26, 2004 to Challenge Claims ENRON: Wants Go-Signal to Implement KERP and Severance Plan III ENRON CORP: EMI Selling Partnership Interest to VF II for $10MM ENUCLEUS INC: Agrees to Acquire PrimeWire Inc.'s Assets FLEMING: Court Clears Amendment to C&S Asset Purchase Agreement FRONTIER OIL: S&P Says Refinery Fire Will Not Affect Ratings GAP INC: Brings-In Cynthia Harriss to Head Outlet Division GLOBAL CROSSING: Court Disallows 63 Duplicate Tax Claims JPS INDUSTRIES: Will Webcast Q4 Conference Call on January 29 KAISER ALUMINUM: Selling 65% Stake in Alpart to Glencore AG KAISER ALUMINUM: Wants Nod for Pension Plan Distress Termination KB HOME: Fitch Assigns BB+ Rating to $250MM Sr. Unsec. Debt Issue KMART CORP: Asks Court to Expunge $1.8MM Account Payable Claims LONE STAR TECHNOLOGIES: Red Ink Continues to Flow in 4th Quarter MAGELLAN HEALTH: Executes Warrant Agreement with Wachovia Bank MAGNATRAX CORP: Names Dennis Smith as New President and CEO MAIL-WELL INC: Launches Tender Offer for 8-3/4% Sr. Sub. Notes MAIL-WELL INC: Prices $320MM Senior Subordinated Debt Offering MAIL-WELL I: S&P Assigns B Rating to $320 Million Sr. Sub. Notes MAIL-WELL: Discloses 2004 Earnings Estimates MASSEY ENERGY: Completes $130 Mill. Asset-Based Credit Facility MASSEY ENERGY: Sets Q4 and FY 2003 Conference Call on January 30 METATEC INC: Completes Sale of All Assets to MTI Acquisition MILESTONE CAPITAL: Brings-In Williams & Webster as New Auditors MIRANT: MAGI Committee Turns to Houlihan Lokey for Fin'l Advice MIRANT CORP: Perryville Seeks $7-Million Admin Claim Payment NATIONAL CENTURY: Asks Court to Clears Quantum Health Settlement NET PERCEPTIONS: Receives Obsidian's Proposal with New Conditions NEW VISUAL: Completes Convertible Debentures Private Placement NORTHSTAR CBO: S&P Keeps Watch On Class A-2 & A-3 Notes Ratings NOVADEL PHARMA: Hires JH Cohn to Replace Wiss & Co. as Auditors PARMALAT CAPITAL FINANCE: Section 304 Petition Summary PARMALAT: Orlandia Files Bankruptcy Case against Parmalat Brazil PARMALAT: S&P Sheds Light on Questions re Parmalat Brazil & Italy PETRO STOPPING CENTERS: S&P Keeps Low-B Ratings on Watch Negative PETRO STOPPING: Reports Pending Notes & Warrants Offer Results PG&E NATIONAL: ET Debtors Want Second Exclusivity Extension PILLOWTEX CORP: Court Approves Hilco as Real Estate Consultants QUINTEK TECH: Begins Offering Aperture Card Outsourcing Services QWEST: Launches New Int'l Voice Offerings for Business Customers REDBACK NETWORKS: Dec. 31 Balance Sheet Upside-Down by $104 Mil. RESOURCE AMERICA: Redeems $53 Million of 12% Senior Notes ROYAL CARIBBEAN: Will Host 4th-Quarter Conference Call on Jan 29 SHAW COMMS: Board Ups Quarterly Dividend on Class A & B Shares SIEBEL SYSTEMS: Sets Financial Analyst Day for February 13, 2004 SIEBEL SYSTEMS: Fourth-Quarter Results Stay Within Guidance Range SILICON GRAPHICS: Dec. 26 Net Capital Deficit Widens to $240MM SOLUTIA INC: Wants to Pull Plug on Monsanto Distribution Pact SPECTRUM SCIENCES: Completes Significant Debt Restructuring Deal TRICO MARINE: Pursuing Refinancing Options to US Credit Facility ULTRA EXPRESS: Case Summary & 20 Largest Unsecured Creditors UNIFI INC: Second-Quarter 2004 Net Loss Balloons to $9 Million UNITED AIRLINES: Flight Attendants Refusing to Sign Agreement UNITED AIRLINES: Lauds Gov't Effort to Reduce O'Hare Congestion UNIVERSAL HEALTH: Declares Cash Dividend Payable on March 15 US AIRWAYS: Allows Allegheny Airport's $211 Million Claim U.S. STEEL: Holding Q4 and FY 2003 Conference Call on January 30 USEC INC: Will Publish Q4 & FY 2003 Results on February 3, 2004 USG CORP: Trade Creditors Sell 226 Claims Totaling $1.1 Million WESTPOINT STEVENS: Signs-Up Dickstein Shapiro as Special Counsel WEYERHAEUSER: Selling Slave Lake Mill to Tolko for CDN$56 Million WICKES INC: Case Summary & 20 Largest Unsecured Creditors WRC MEDIA INC: Lenders Waive Potential Loan Covenant Violations * BOOK REVIEW: The Rise and Fall of the Conglomerate Kings ********* 4902 DUVAL CONDOMINIUMS: Voluntary Chapter 11 Case Summary ---------------------------------------------------------- Debtor: 4902 Duval Condominiums, LLC 1000 North IH-35 Austin, Texas 78701 Bankruptcy Case No.: 04-10142 Type of Business: Real Estate Chapter 11 Petition Date: January 5, 2004 Court: Western District of Texas (Austin) Judge: Frank R. Monroe Debtor's Counsel: Douglas J. Powell, Esq. 820 West 10th Street Austin, TX 78701 Tel: 512-476-2457 Fax: 512-477-4503 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million ABITIBI-CONSOLIDATED: Will Publish 4th Quarter Results on Jan. 28 ----------------------------------------------------------------- Abitibi-Consolidated Inc. (TSX: A; NYSE:ABY) will release fourth quarter results before the market opens on Wednesday, January 28, 2004. Management will host a conference call and question-and-answer session to discuss earnings that day at 11:00 A.M. (EST). Participants will include President and Chief Executive Officer, John W. Weaver as well as Pierre Rougeau, Senior Vice-President, Corporate Development and Chief Financial Officer. To participate in the conference call, investment professionals and business media may dial 1-800-387-6216 or 514-861-6560 ten minutes before the beginning of the call. Who: Abitibi-Consolidated Inc. What: Fourth Quarter and 2003 Results When: Wednesday, January 28, 2004 at 11:00 A.M. (EST) Conference Call: Dial 800-387-6216 or 514-861-6560 Webcast: A live webcast of the quarterly results may be accessed through the Company's Web site http://www.abitibiconsolidated.com/under the "Investors" section - "Events and Presentations". Listeners should allow ample time to access the webcast. A replay of the webcast will be archived on the Company's website. Abitibi-Consolidated (Moody's, Ba1 Outstanding Debentures Rating) is the world's leading producer of newsprint and value-added paper as well as a major producer of wood products, generating sales of $5.1 billion in 2002. With 16,000 employees, the Company does business in more than 70 countries. Responsible for the forest management of 18 million hectares, Abitibi-Consolidated is committed to the sustainability of the natural resources in its care. The Company is also the world's largest recycler of newspapers and magazines, serving 17 metropolitan areas with more than 10,000 Paper Retriever(R) collection points. Abitibi- Consolidated operates 27 paper mills, 21 sawmills, three remanufacturing facilities and one engineered wood facility in Canada, the US, the UK, South Korea, China and Thailand. ACTRADE FINANCIAL: Successfully Emerges from Chapter 11 Process --------------------------------------------------------------- On January 7, 2004, the United States Bankruptcy Court for the Southern District of New York entered an order confirming the Second Amended Joint Plan of Liquidation of Actrade Financial Technologies Ltd., and one of its direct U.S. subsidiaries, Actrade Capital Inc., dated December 15, 2003, as amended, in connection with the Debtors' cases under chapter 11 of Title 11 of the United States Code (jointly administered under Case no. 02- 16212). The Effective Date of the Plan was on January 8, 2004. Further inquiries regarding the Plan or the Confirmation Order should be directed to: Joseph M. Vann, Esq. Cohen Tauber Spievack & Wagner LLP 420 Lexington Avenue, 24th Floor New York, New York 10170 Actrade Financial filed its Chapter 11 petition on December 12, 2002. The Reorganized Debtor was a publicly traded holding company incorporated in the State of Delaware. Its business operations were conducted through its subsidiaries that provided payment technology solutions that automate financial processes and enhance business-to-business commerce relationships. ACXIOM CORP: Reports Strong Third-Quarter Financial Results ----------------------------------------------------------- Acxiom(R) Corporation (Nasdaq: ACXM) announced revenue and earnings results for the third quarter ended December 31, 2003. Revenue and diluted earnings per share were $255.2 million and $.22, respectively. Operating cash flow of $79.3 million and free cash flow of $59.9 million for the quarter represent record cash flow performances for the Company. "Our third-quarter revenue, earnings, cash flow and new-business results are all strong," Company Leader Charles D. Morgan said. "And with the building momentum of our new Customer Information Infrastructure (CII) grid-based solution architecture we are establishing a solid foundation for fiscal 2005." Highlights of Acxiom's third-quarter performance include: -- Revenue of $255.2 million and diluted earnings per share of $.22, which includes a $3 million distribution from the Montgomery Ward bankruptcy and a loss of $1.4 million related to investments. -- Operating cash flow of $79.3 million and free cash flow of $59.9 million, which are quarterly records for the Company and the 10th consecutive quarter of strong cash flow performance. Free cash flow is a non-GAAP financial measure and a reconciliation to the comparable GAAP measure, operating cash flow, is attached to this release. -- New contracts that will deliver $49 million in annual revenue and renewals that total $14 million in annual revenue. -- Committed new deals in the pipeline that are expected to generate $44 million in annual revenue. -- The acquisition of Claritas Europe was completed effective January 1, 2004. -- The completion of a long-term, multi-faceted strategic alliance with Accenture that is expected to drive new revenue and improve the efficiency of Acxiom's services delivery model. "Our increased presence in Europe and our new partnership with Accenture represent landmark deals that will help define the future of Acxiom," Morgan said. "Bringing Claritas Europe's data assets together with Acxiom's proven services expertise creates an attractive value proposition for the European marketplace. Similarly, Accenture's strengths and Acxiom's strengths are very complementary, and combining those strengths should improve bottom-line results for both companies." Morgan noted that Acxiom expanded its services agreement with JPMorgan Chase in the quarter to include the financial institution's credit card customer database. Other contracts were completed with blue-chip clients including Equifax in the United Kingdom and AutoNation Inc., Bank One Corporation, IMS Health, Marriott Vacation Club International and Microsoft Corporation in the U.S. Outlook The financial projections stated here are based on the Company's current expectations. These projections are forward looking, and actual results may differ materially. These projections do not include the potential impact of any mergers, acquisitions, divestitures or other business combinations that may be completed in the future. For the fourth quarter of the 2004 fiscal year, the Company expects: -- Revenue of $265 million to $270 million, which includes the Claritas Europe operations. -- Earnings per share of $.16 to $.18, which includes the previously announced expected loss of $.02 a share from the Claritas Europe operations. -- Operating cash flow in excess of $40 million and free cash flow in excess of $25 million, which increases the Company's fiscal 2004 projection for operating cash flow to more than $220 million and free cash flow to more than $155 million. For the fiscal year ending March 31, 2005, the Company estimates revenue of $1.14 billion to $1.19 billion and diluted earnings per share of $.68 to $.70. The Company estimates that it will generate operating cash flow in excess of $200 million and free cash flow in excess of $135 million. Acxiom Corporation (Nasdaq: ACXM) (S&P, BB+ Corporate Credit Rating, Stable) integrates data, services and technology to create and deliver customer and information management solutions for many of the largest, most respected companies in the world. The core components of Acxiom's innovative solutions are Customer Data Integration (CDI) technology, data, database services, IT outsourcing, consulting and analytics, and privacy leadership. Founded in 1969, Acxiom is headquartered in Little Rock, Arkansas, with locations throughout the United States and Europe, and in Australia and Japan. ADELPHIA COMMS: Fee Committee Brings-In Kronish Lieb as Counsel --------------------------------------------------------------- At the request of the Adelphia Communications Debtors' Fee Committee, Judge Gerber authorizes the Fee Committee to retain Kronish Lieb Weiner & Hellman LLP as its counsel, nunc pro tunc to November 5, 2003. According to Jeffrey Lawton, Chairperson of the Fee Committee, the Fee Committee determined that to effectively carry out its responsibilities, it requires the advice of legal counsel. Most importantly, the Fee Committee determined that it requires counsel to effectively file objections to fee applications, to appear in court to argue objections and, if necessary, prosecute the objections in evidentiary hearings. As counsel, Kronish Lieb will: (1) assist the Fee Committee in appearing at hearings on behalf of the Fee Committee; (2) assist the Fee Committee with legal issues raised by inquiries to and from the Retained Professionals and Legal Cost Control, Inc., the auditor for the Committee; and (3) where necessary, attend meetings between the Fee Committee, Legal Cost Control, and the Retained Professionals. Mr. Lawton relates that other than in connection with what is necessary to render legal advice to the Fee Committee, Kronish Lieb will not independently review fee applications or otherwise duplicate the work performed by Legal Cost Control. Kronish Lieb intends to apply to the Court for allowance of compensation and reimbursement of expenses. Mr. Lawton informs the Court that Kronish Lieb possesses extensive knowledge and expertise in the areas of bankruptcy law relevant to these cases, and that the firm is well qualified to represent the Fee Committee. In selecting its counsel, the Fee Committee sought counsel with experience in representing debtors, creditors' committees and other committees in large Chapter 11 cases and other debt-restructuring scenarios. The attorneys in the bankruptcy group of Kronish Lieb have the experience, having represented a number of debtors, creditors committees and equity security holder committees in significant reorganizations under Chapter 11. The firm's hourly rates in effect as of January 1, 2003 are: Partners $525 - 550 Associates 215 - 405 Paraprofessionals 170 - 190 Kronish Lieb will maintain detailed, contemporaneous records of time and any actual and necessary expenses incurred in connection with the rendering of the legal services by category and nature of the services rendered. As a law firm with a diversified practice, Kronish Lieb in the past had, currently has, and from time to time in the future will have numerous interactions with the law firms, accountants, and financial advisors who are or may be applicants for allowance of fees and expenses in these cases, the sole matter as to which the Fee Committee has responsibilities. It is undoubtedly true that Kronish Lieb has had representations on the same side as and opposed to many of the Retained Professionals and has hired many of the firms as experts or consultants and has represented clients in matters in which the other professionals have been experts or consultants on the other side. James Beldner, Esq., a member of Kronish Lieb, assures Judge Gerber that Kronish Lieb is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code in that Kronish Lieb, its members, counsel, and associates: (1) are not creditors, equity security holders, or insiders of the Debtors; (2) are not and were not investment bankers for any outstanding security of the Debtors; (3) have not been, within three years before the Petition Date: (a) investment bankers for a security of the Debtors; or (b) an attorney for an investment banker in connection with the offer, sale, or issuance of a security of the Debtors; (4) are not and were not, within two years before the Petition Date, a director, officer, or employee of the Debtors or of any investment banker; and (5) do not have an interest materially adverse to the interest of the Debtors' estates or of any class of creditors or equity security holders, by reason of any direct or indirect relationship to, connection with, or interest in, the Debtors or an investment banker. Mr. Beldner further discloses that: (1) Over the past few years, the tax department of Kronish Lieb performed certain tax work for Lazard Freres & Co. LLC. The gross fee number was less than one tenth of one percent of Kronish Lieb's annual billing. Kronish Lieb is not currently rendering legal or tax consulting services for Lazard; (2) Don Turlington, a tax partner of Kronish Lieb, was retained to be an expert witness in a significant tax shelter litigation involving a Swiss pharmaceutical firm. Sidley Austin Brown & Wood P.C. is counsel for the pharmaceutical firm and Kronish Lieb will be an expert witness for the pharmaceutical firm. Kronish Lieb is being paid directly by Sidley, as is customary for experts. However, Kronish Lieb is not performing the work on behalf of Sidley, but for the corporate client. In discussion with Mr. Turlington Kronish Lieb would have no issue in being adverse to Sidley in the Adelphia case if that is required; (3) Kronish Lieb is counsel for the creditors committee in The Walking Company bankruptcy case pending in Los Angeles, and Klee, Tuchin Bogdanoff & Stern was retained by the creditors committee as local counsel; (4) Kronish Lieb is counsel for a creditors committee in the Jacobsons bankruptcy case pending in Detroit. Pepper Hamilton LLP was retained by the creditors committee as local counsel; (5) Kronish Lieb represented Metromedia Fiber Corp. in its recent successful Chapter 11 case in the Southern District of New York. Kronish Lieb continues to represent Metromedia in certain follow-up bankruptcy and litigation matters. Kronish Lieb filed a claim on behalf of Metromedia against Adelphia Business Solutions which company is not one of the present Debtors. Kronish Lieb was advised by Adelphia Business Solutions that the Metromedia claim is in fact a claim against Adelphia Communications Corporation and thus, it may be necessary that Metromedia file its claim in the Adelphia Communications Corporation case. In that circumstance, the General Counsel or other outside counsel representing Metromedia will file the claim and prosecute said filing if necessary. Kronish Lieb will not represent Metromedia in ACOM's case; (6) Kronish Lieb does not represent Kroll Zolfo Cooper LLC, however, Michael Gottlieb, the son of Lawrence Gottlieb, a bankruptcy partner, works as a junior analyst at Kroll on matters unrelated to these Chapter 11 cases. Lawrence Gottlieb will not work on this engagement and will have no access to the documentation pertaining to these cases; (7) Kronish Lieb previously represented Michael Mulcahey, a former officer of the Debtors, in connection with investigations of the Debtors and various officers, directors and employees conducted by the U.S. Attorneys Office for the Southern District of New York and the U.S. Securities and Exchange Commission. Kronish Lieb withdrew from its representation and ceased rendering services in October 2002; (8) Home Box Office, Inc. is a present client of Kronish Lieb in matters unrelated to these Chapter 11 cases; and (9) Viacom, Inc. is a present client of Kronish Lieb in matters unrelated to these Chapter 11 cases. (Adelphia Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., 215/945-7000) ADELPHIA: Deploys Sigma Systems' Service Management Portfolio ------------------------------------------------------------- Sigma Systems -- http://www.sigma-systems.com/-- the global leader in cable broadband operational support systems has successfully deployed the Sigma Service Management Portfolio(TM) at Adelphia Communications. This multi-service product portfolio provides the order management, service provisioning and billing system integration for Adelphia's PowerLink High Speed Data and Internet offerings, and lays the OSS foundation for multi-service provisioning of Adelphia's IP-enabled future services. "One of Adelphia's most important business initiatives is to increase the speed, performance and subscriber growth for our residential high-speed data offerings," said Adelphia's Chief Technology Officer, Marwan Fawaz. "We selected Sigma Systems as a key vendor to automate service delivery processes, accelerate service deployment and improve our bottom-line. Sigma's demonstrated global cable deployments and impeccable customer references coupled with its product's proven architecture were key factors in our decision to implement Sigma's service management products." The solution at Adelphia comprises the Sigma Service Management Platform and the Sigma Service Management Suite for Internet services as well as adapters to integrate with third-party billing, device provisioning and e-mail systems. The Sigma Service Management Portfolio facilitates rapid commercial deployment and integrates easily with external systems while providing the necessary scale and performance to manage millions of geographically-spread subscribers. The solution includes pre- defined high-speed data service definitions, a robust and configurable service network topology model and the automated workflow processes to provision high-speed data and Internet services. "The Sigma Service Management Solution provides a configurable and adaptable solution for IP services," said Adelphia's Director of High Speed Data Strategy and Product Development, Matt Bell. "The solution was instrumental in our achieving a critical milestone in preparing to deliver all IP related services across our nationwide network. The Sigma solution provides the service management platform for our Adelphia PowerTools OSS infrastructure; which enables us to respond to market demands quickly and effectively." As part of the implementation, Sigma Systems' team defined the solution's requirements, provided product configuration and customizations and integrated its Service Management Platform with Adelphia's billing systems from CSG Systems and DST Innovis, as well as service infrastructure systems from ADC, OpenWave and SupportSoft. Sigma's product suite was configured and delivered to Adelphia in under 30 days with all subscribers migrated in 73 days, making this installation fast, efficient and seamless. Today, the suite supports more than one million high-speed data subscribers on Adelphia's state-of-the-art network. "We are delighted to play a key part of Adelphia's IP Services framework," says Tim Spencer, President and COO, Sigma Systems. "Our significant and ongoing investments in our product ensures our cable broadband solutions can be rapidly deployed and easily integrated. Our deployment at Adelphia is a perfect example of our expertise in complex service management environments." The Sigma Service Management Platform is the core of Sigma's comprehensive portfolio of service management solutions, which also includes advanced capabilities for subscriber and service provisioning for data services, voice over IP, wireless and satellite services, network and resource management and advanced service quality tools. With more than 8 million subscribers under management world-wide, Sigma Systems is a global leader, recognized in providing the finest solutions in multi-service service management solutions for cable operators. Sigma's comprehensive capabilities include support for multi-vendor, multi-service networks including Packet cable telephony, SIP telephony, GR303/V5.2 telephony, cable high-speed internet, ISP services, wireless 1x, 2.5G/3G infrastructures, and advanced set- tops. Sigma Systems is the premier provider and leader in designing, developing and deploying broadband OSS solutions including creating managing, provisioning and diagnosing broadband services. The company's award-winning Service Management(TM) Platform empowers broadband service providers for cable, wireless and satellite to automate their service delivery environment, significantly lower their operating and capital expenses, while leveraging their existing technology and back-office investments. Sigma Systems is also the first OSS provider to deliver automated service provisioning solutions for cable high-speed Internet, interactive TV and cable telephony services. The company's OSS products are the most configurable, adaptable, scalable and reliable in the market place today - where operators can readily deploy with confidence based upon Sigma's commercial experience. Additional information about Sigma Systems can be found at http://www.sigma-systems.com/ AFC ENTERPRISES: Reports Improved Q4 2003 Performance Results ------------------------------------------------------------- AFC Enterprises, Inc. (Ticker: AFCE), the franchisor and operator of Popeyes(R) Chicken & Biscuits, Church's Chicken(TM), Cinnabon(R) and the franchisor of Seattle's Best Coffee(R) in Hawaii, on military bases and internationally, announced operating performance results for the fourth quarter of 2003, which included the Company's fiscal period 11 (10/6-11/2), period 12 (11/3-11/30) and period 13 (12/1-12/28). Results for periods 11 and 12 were previously announced in a press release dated December 16, 2003. Overall Performance Domestic Same-Store Sales Growth AFC reported that blended domestic same-store sales growth at its restaurants and bakeries were up 0.4 percent for the fourth quarter of 2003, compared to a decrease of 3.3 percent for the fourth quarter of 2002. The Company continued to see improvements in its domestic same-store sales growth throughout the quarter, representing AFC's first quarter of positive domestic performance since the second quarter of 2002. AFC's average check for the fourth quarter of 2003 also improved primarily due to the Company's expanded promotional offerings and sustained operational focus. The average check in the fourth quarter of 2003 was up 4.8 percent for Church's, 3.0 percent for Popeyes and 0.7 percent for Cinnabon. Specific drivers that helped to improve same-store sales in the fourth quarter of 2003 included: -- Church's continued an effective promotional strategy that included the holiday bundle, an eight piece mixed bundle with sides and four biscuits for $9.99, in addition to a Zesty Shrimp Crunchers promotion offering 14 to 16 pieces at $2.99. -- Church's discontinued the previous "full life" advertising campaign and replaced it with new food-focused advertising. -- Popeyes worked closely with franchisees to optimize execution at the restaurant level by mobilizing and coordinating marketing and operational resources in key large city Designated Market Areas to focus on sales building activities, media programs and operational issues such as training, store appearance and drive-thru efficiency. -- Popeyes returned to historically strong promotions, including crawfish and the holiday platter featuring a free 2-liter of coke with any 12-piece or larger bundle offering. -- Cinnabon remained focused on its "Operational Excellence" initiative that emphasized quality, availability and guest service, which facilitated improved capture rates. -- Cinnabon helped to drive additional brand awareness by expanding its licensing initiatives, partnering with General Mills and launching the Cinnabon Streussel Muffins into the club channels. AFC reported that full-year blended domestic same-store sales growth decreased 2.5 percent for 2003. This figure was in line with the Company's previously stated full-year blended domestic same-store sales growth projection of a 2.5-3.5 percent decrease. New System-wide Openings The AFC system opened 110 restaurants, bakeries and cafes during the fourth quarter of 2003, compared to 139 total system-wide openings in the fourth quarter of 2002. For the full year of 2003, the AFC system opened 336 new units as compared to 422 new units opened in 2002. The 336 new units opened in 2003 were slightly lower than the previous forecast of 345-370 new unit openings due primarily to construction and permitting delays for Church's and Cinnabon. On a system-wide basis, AFC had 4,091 units at the end of the fourth quarter of 2003. The composition of units at the end of the fourth quarter of 2003 was comprised of 3,139 domestic units and 952 international units in Puerto Rico and 35 foreign countries. The unit count represented 437 Company owned restaurants and bakeries, in addition to 3,654 franchised restaurants, bakeries and cafes. Commitments The Company signed 128 new commitments for unit expansion in the fourth quarter of 2003 versus 472 signed in the fourth quarter of 2002. On a full-year basis, AFC added 325 new commitments in 2003 versus 976 signed in 2002. This number was somewhat below AFC's expectation of 350-400, primarily driven by lengthened international negotiations for new Cinnabon development. The year over year decline in new commitments signed was largely due to the Company's inability to participate in certain domestic franchise sales-related activities, including the sale of new commitments, due to the delayed fiscal year 2002 and quarterly 2003 financial statements. The Company will reengage in domestic franchise sales after finalizing and filing its franchise offering circulars and renewing its state franchise registrations. This process will follow the release of its 2003 audited financial statements. Commenting on AFC's operational performance, Dick Holbrook, President and COO of AFC Enterprises, stated, "We remain focused on what is needed to improve business performance. The crusade of our brands is to work closely with our franchise partners to identify brand-building opportunities that will yield dividends for their business. These intense efforts are evidenced in the improving sales as we concluded 2003. The Company continues to implement initiatives that we expect will improve these business trends further in 2004." Other Key Business Matters Status of 2003 Regulatory Filings The Company remains focused on preparing its 10-Q filings for the first three quarters of 2003. AFC and its independent auditor, KPMG, LLP, are working diligently to facilitate the audit and prepare its Annual Report on Form 10-K for 2003 in March of this year. Upon completion and filing of such statements, the Company intends to begin the Nasdaq listing application process. Outstanding Debt AFC's outstanding debt under its credit facility agreement, net of investments, at the end of 2003 was approximately $126 million versus $218 million at the end of 2002. Unusual Expenses AFC is still expecting to incur $19-$20 million of unusual expenses in 2003. As previously reported, these unusual expenses are related to the re-audit process for fiscal years 2002, 2001 and 2000, expenses related to the amendment of AFC's credit facility agreement, shareholder litigation and the Company's productivity initiative. Concluding Remarks Remarking on AFC's key business matters, Chairman and CEO Frank Belatti, stated, "2003 represented a challenging year for the Company but we remained focused on the items that needed to get executed. We look to 2004 as a year for driving value to our stakeholders as we focus on completing the financials, continuing to improve the performance of the business and managing the portfolio." AFC Enterprises, Inc. is the franchisor and operator of 4,077 restaurants, bakeries and cafes as of November 30, 2003, in the United States, Puerto Rico and 35 foreign countries under the brand names Popeyes(R) Chicken & Biscuits, Church's Chicken(TM), Cinnabon(R) and the franchisor of Seattle's Best Coffee(R) in Hawaii, on military bases and internationally. AFC's primary objective is to be the world's Franchisor of Choice(R) by offering investment opportunities in highly recognizable brands and exceptional franchisee support systems and services. AFC Enterprises had system-wide sales of approximately $2.7 billion in 2002 and can be found on the World Wide Web at http://www.afce.com/ * * * Credit Facility and Current Ratings The Company's outstanding debt under its credit facility agreement, net of investments, at the end of Period 9 of 2003 was approximately $125 million, down from approximately $218 million at the end of 2002 as a result of cash generated from ongoing operations and the sale of its Seattle Coffee Company subsidiary. On August 25, 2003, Standard & Poor's Ratings Services raised the Company's senior secured bank loan ratings to 'B' from 'CCC+' and on August 28, 2003, Moody's Investor Service lowered the Company's secured credit facility rating from Ba2 to B1. ALLIED WASTE: Prices Unit's $825 Million Senior Debt Offering ------------------------------------------------------------- Allied Waste Industries, Inc. (NYSE: AW) announced that Allied Waste North America, Inc., its direct, wholly-owned subsidiary, has priced its offerings of $400 million in Senior Notes due 2011 at 5.75% and $425 million in Senior Notes due 2014 at 6.125% in a private placement under Rule 144A and Regulation S of the Securities Act of 1933. These new notes have been rated BB-, Ba3 and BB- by Standard & Poor's, Moody's and Fitch, respectively. Allied intends to use the proceeds from these senior notes to redeem $825 million of AWNA's 7.875% Senior Notes due 2009. The Company expects to receive the proceeds from these new notes on or about January 27, 2004. The offer of these senior notes was made only by means of an offering memorandum to qualified investors and has not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration under the Securities Act or an exemption from the registration requirements of the Securities Act. Allied Waste Industries, Inc. (S&P, BB Corporate Credit Rating, Stable Outlook), is the second largest, non-hazardous solid waste management company in the United States, providing non-hazardous waste collection, transfer, disposal and recycling services to approximately 10 million customers. As of June 30, 2003, the Company operated 333 collection companies, 171 transfer stations, 171 active landfills and 64 recycling facilities in 39 states. ALLIED WASTE: S&P Rates Unit's $825 Million Senior Notes at BB- --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' rating to the $825 million of senior notes due 2011 and 2014 of Allied Waste North America Inc. The notes are guaranteed by AWNA's parent, Allied Waste Industries Inc. (BB/Stable/--) and subsidiaries of AWNA, and are offered under Rule 144A with registration rights. At the same time, Standard & Poor's affirmed its existing ratings, including the 'BB' corporate credit rating, on Allied Waste. The outlook is stable on Scottsdale, Arizona-based Allied Waste, the second-largest solid waste management concern in the U.S. About $8 billion of debt is outstanding. The notes will be issued on the same basis as AWNA's existing senior notes and are rated one notch below Allied Waste's corporate credit rating, reflecting their junior position compared to the better-secured bank facilities. Proceeds of the notes will be used to call $825 million of AWNA's 7.875% senior notes due 2009. "Allied Waste has a relatively weak, albeit improving, financial profile, which outweighs the company's strong competitive business position," said Standard & Poor's credit analyst Roman Szuper. Allied Waste provides collection, transfer, disposal, and recycling services to about 10 million residential, commercial, and industrial customers in 38 states, generating about $5 billion in annual revenues. A national network of facilities creates opportunities for modest growth through internal development, focusing on the vertical integration business model. The firm's market position is enhanced by a low cost structure, very good collection-route density, and a high rate of waste internalization. A recent agreement with the holders of Allied Waste's $1 billion preferred stock to convert it into common stock improves the capital structure and saves about $500 million in cash over the next six years by eliminating future dividend payments. Debt maturities are manageable at $350 million from 2004 to 2005. Based on current expectations, there is likely to be a reasonable cushion in financial covenants under the credit facilities. ALLIED WASTE: Fitch Rates $28M Proposed Sr. Secured Notes at BB- ---------------------------------------------------------------- Fitch Ratings assigned a rating of 'BB-' to Allied Waste North America's (NYSE: AW) proposed $825 million senior secured notes due 2011. The notes are expected to be issued in seven and ten- year tranches, with the amounts of each tranche to be determined. Net proceeds will be used towards reduction of its outstanding 7.875% senior notes due 2009. The Rating Outlook is Stable. During 2003, AW has significantly improved its capital structure and maturity schedule through the issuance of mandatory convertible preferred stock, the conversion of $1.3 billion of preferred stock to common stock, asset divestitures, free cash flow, and equity issuance. Total debt at September 30, 2003 was approximately $8.2 billion, and Fitch estimates that fourth quarter free cash flow and proceeds from asset sales should provide the capacity to reduce debt by an additional $200 million. Despite continued debt reduction, leverage remains high in relation to cash flow. Interest and other fixed obligations will be meaningfully reduced in 2004 as a result of debt reduction in 2003 and projected further reductions in 2004 (including recent asset sales), lower effective interest rates related to the company's numerous refinancing activities and the elimination of the Series A preferred dividend obligation. Interest costs could be reduced by $100 million in 2004, while the Series A dividend payments were scheduled to total approximately $90 million annually starting in July 2004. Debt reduction from free cash flow is expected to continue in 2004, with lower interest costs and any improvement in economic conditions supporting an increase from 2003 levels. The company's high leverage, however, indicates that free cash flow as a percentage of total debt will still be limited to 5%-8%. Even upon a reversal in the economic environment, Allied Waste is expected to remain in a consistent free cash flow position. Following $225 million debt (7.375% senior notes) that comes due in January 2004, there are no significant maturities in 2004 and 2005. Continued debt reduction could warrant a review of the Outlook or the rating during 2004. The notes will be guaranteed by Allied Waste Industries, Inc., and substantially all of its subsidiaries. The notes will rank equally with AW's outstanding senior secured notes, and will be subordinated to debt under the company's senior secured bank facility. Total bank debt of $1,435 million at September 30, 2003, consisting of $1,185 million of Term Loan B and $250 million of Term Loan C, accounted for 21.5% of total secured debt. The company's debt reduction and growth in its equity base continue to improve the position of all creditors, with bank creditors in particular benefiting over the last several years as the proportion of bank debt has declined in relation to total debt. ALLMERICA FINANCIAL: A.M. Best Ups First Allmerica's Low-B Rating ----------------------------------------------------------------- Allmerica Financial Corporation (NYSE: AFC) announced that the A.M. Best Company upgraded the financial strength ratings of its property and casualty and life insurance subsidiaries. The rating upgrades affirm the effectiveness of a successful restructuring effort launched during the fourth quarter of 2002. Earlier Wednesday, Best upgraded the financial strength ratings assigned to Allmerica's property and casualty companies, Citizens Insurance Company of America and The Hanover Insurance Company, to A- (Excellent) from B++ (Very Good), and its life insurance companies, Allmerica Financial Life Insurance and Annuity Company, and First Allmerica Life Insurance Company of America, to B+ (Very Good) from B- (Fair). In 2002, Best lowered the financial strength ratings of Allmerica's life insurance companies and consequently reduced the ratings of its property and casualty companies based on concerns that Citizens and Hanover might need to make capital contributions to support the life companies. Since then, Allmerica implemented a broad corporate restructuring plan, dramatically enhancing the capital position of its operating companies, including Citizens Insurance Company of America, The Hanover Insurance Company, Allmerica Financial Life Insurance and Annuity Company and First Allmerica Financial Life Insurance Company, effectively addressing rating agency concerns. "This rating upgrade reflects the confidence A.M. Best has in the overall financial condition of our companies and the strong market position of our property and casualty companies," said Frederick H. Eppinger, Jr., President and Chief Executive Officer of Allmerica Financial Corporation. "It also better positions us to further our goal to become a world class company committed to partnering with winning agents to meet their customers' insurance needs and to profitably grow their business over the long-term," Eppinger said. "We are committed to maintaining a financially solid company, creating even deeper partnerships with our independent agent partners, building the very best underwriting and product capabilities in our markets, and providing responsive service. We believe our ratings affirm our ability to achieve these goals." Worcester, Massachusetts-based Allmerica Financial Corporation is the holding company for a group of insurance and financial services companies, led by Citizens Insurance Company of America and The Hanover Insurance Company. Howell, Michigan-based Citizens, founded in 1915, and Worcester, Massachusetts-based Hanover, founded in 1852, are leading regional property and casualty insurance companies. Citizens and Hanover offer a wide range of commercial and personal lines products through independent agents located predominantly in the Northeast, South and Midwest. AMERIGAS: Fitch Says UGI's Equity Acquisition Won't Affect Ratings ------------------------------------------------------------------ Fitch Ratings does not expect UGI Corp's announced proposed purchase of the remaining ownership interests of AGZ Holdings, the parent company of Antargaz, to impact the ratings of Amerigas Partners, L.P. (APU, senior unsecured debt rated 'BB+' by Fitch) or its operating subsidiary, Amerigas L.P. (AGP, senior secured debt rated 'BBB'). The proposed acquisition of the remaining 81.5% ownership interests of Antargaz, one of France's largest distributors of liquid petroleum gas, would total 250 million euros and would be financed with $100 million in cash and the proceeds of a future UGI equity issuance. UGI is the indirect 2% general partner and 46% limited partner of APU, a master limited partnership and the nation's largest retail propane distributor. APU, in turn, is an MLP for APG, an operating limited partnership. Fitch's ratings for APU and APG recognize the absence of significant financial or operational ties between the general partner and APU. Although UGI offers AGP limited credit support by way of a $20 million revolving credit facility from the general partner (expiring in 2006), this facility is subordinated to all senior debt of the operating partnership and AGP has otherwise operated as a standalone, self-financing entity. The current MLP structure of APU will be unaffected by the proposed acquisition. AMERICAN HOMEPATIENT: W. Wayne Woody Elected to Board of Directors ------------------------------------------------------------------ American HomePatient, Inc. (OTC: AHOM) announced that W. Wayne Woody has been appointed to the Company's Board of Directors. Mr. Woody will serve on the audit committee of the Board of Directors and will hold the role of audit committee financial expert for the Company. From 1968 until his retirement in 1999, Mr. Woody was employed by KPMG LLP and its predecessor firms, Peat Marwick Mitchell & Co. and Peat Marwick Main. As a Senior Partner, he served in a number of key positions, including Partner-in-Charge of Professional Practice and Firm Risk Management for the southeastern United States and Puerto Rico, and Securities and Exchange Commission Reviewing Partner. Mr. Woody was a member of the KPMG LLP Board of Directors from 1990 through 1994. From 2000 to 2001, Mr. Woody served as the Interim Chief Financial Officer for Legacy Investment Group, a boutique investment firm, where he was responsible for guiding the company through a transition in accounting and reporting. Currently, Mr. Woody serves on the Boards of Directors of Coast Dental Services, Inc., a provider of comprehensive business services and support to general dentistry practices (NASDAQ: CDEN), and Wells Real Estate Investment Trust Inc., a real estate investment management firm. American HomePatient, Inc. -- whose September 30, 2003 balance sheet shows a total shareholders' equity deficit of about $38 million -- is one of the nation's largest home health care providers with 288 centers in 35 states. Its product and service offerings include respiratory services, infusion therapy, parenteral and enteral nutrition, and medical equipment for patients in their home. American HomePatient, Inc.'s common stock is currently traded in the over-the-counter market or, on application by broker-dealers, in the NASD's Electronic Bulletin Board under the symbol AHOM.OB. AMR CORP: Fourth-Quarter Net Loss Narrows to $111 Million --------------------------------------------------------- AMR Corporation (NYSE: AMR), the parent company of American Airlines, Inc., reported a net loss of $111 million for the fourth quarter, or $.70 per share. This compares with last year's fourth quarter net loss of $529 million, or $3.39 per share. Building on the added momentum of this financial improvement, American announced a major restructuring of its hub operations at Miami that will make the hub -- American's principal gateway to Latin America -- more efficient, increase its on-time dependability, and give customers added convenience and a wider choice of flights. The airline also announced that it will enter into a robust new codesharing partnership with Mexicana, the premier airline of Mexico. AMR's fourth quarter results include a handful of special items -- both gains and losses -- resulting from the company's continuing restructuring efforts, a federal income tax settlement during the quarter, and gains on the sale of investments. In addition, in keeping with the provisions of SFAS 109, AMR's fourth quarter 2003 results do not reflect a provision for federal and state income taxes. Conversely, AMR's fourth quarter 2002 results reflected a tax benefit. To provide a better comparison between the two periods, after adjusting for these special items and taxes, the company recorded a loss (pre-tax and excluding special items) of $95 million this quarter, or $.59 per share, versus a loss (pre- tax) of $828 million, or $5.31 per share, in the fourth quarter of last year. For the fourth quarter of 2003, AMR had operating income of $103 million, excluding special items. In the fourth quarter of 2002, AMR posted a net operating loss of $679 million. (A reconciliation of all non-GAAP measures included in this earnings release is provided in the attachments.) For the full year 2003, AMR reported a net loss of $1.2 billion, or $7.76 per share, compared to a full year net loss of $3.5 billion, or $22.57 per share, in 2002. When adjusted for special items and the year-over-year tax differences mentioned above, AMR posted a 53 percent improvement in financial results, registering a full year loss of $1.5 billion in 2003 compared to a full year loss of $3.2 billion in 2002. "The improvement in our year-over-year results is a direct result of our ongoing efforts to restructure our business and the willingness of every one of us to sacrifice and accept change as an inevitable fact of life in the airline industry," said Gerard Arpey, AMR's president and CEO. "While the work required to make our company consistently profitable has just begun, the momentum we have created together is powerful. Perhaps the best illustration of this is the fact that we have now achieved an operating profit, excluding special items, two quarters in a row. And unlike a year ago, when we were burning through millions of dollars of cash every day, our operation is now generating positive cash flow." The Miami hub restructuring and the new relationship with Mexicana will strengthen American's network and add to the company's financial progress, Arpey said. With a combined total of more than 130 years of service between the U.S. and Mexico, American and Mexicana will forge a relationship that will give customers enhanced service to the most important markets in the United States and Mexico, as well as connections across their global networks. For American, it will mean new flight availability to 21 additional cities in Mexico and the ability to offer service in 27 new, nonstop transborder markets. The relationship also includes a reciprocal frequent- flyer agreement that will allow passengers to accrue and redeem miles in American's AAdvantage(R) program or Mexicana's Frecuenta(R) program on more than 500 U.S.-Mexico flights per week. American and Mexicana will launch the partnership in April, pending governmental approval. In Miami, the airline's principal gateway to Latin America, American will spread its operations more evenly by increasing the number of daily flight banks to 13 from seven, effective May 1. In doing so, the airline will be able to operate more flights in and out of Miami using fewer aircraft, thereby greatly increasing the hub's efficiency and assisting in the company's overall objective to lower costs. At the same time, the restructured Miami hub will significantly enhance customer service, allowing American to offer passengers more flight choices, giving customers more time to make their flight connections, and spreading out the flow of international passengers in ways that will make it easier to clear customs and immigration processing. Longer term, the new hub design will give American and American Eagle room to grow at Miami within the framework of the new terminal facility that is now under construction. "Miami is one of the linchpins of our global network," Arpey said. "And this initiative will enable us to operate more flights in and out of that hub -- using fewer aircraft -- reduce costs, and relieve some of the pressure that hub has been under from the ongoing terminal construction project." At the heart of AMR's financial progress in 2003, Arpey said, were the strides it made toward achieving the company's critical goal of $4 billion in annual capacity-independent cost savings. These efforts were given a huge boost when employees agreed to a restructuring that added $1.8 billion a year in labor-cost savings to savings of $2 billion a year from strategic initiatives and another $200 million from vendors, suppliers and creditors. "Lower costs go hand in hand with our ability to protect and build on our leading share in the marketplace," Arpey said. "Today, thanks to the sacrifices, hard work and ingenuity of American's people, our costs -- while still not as low as our low-cost competitors -- are continuing to improve to help us compete vigorously for every customer." Although unquestionably pleased by its progress, Arpey said AMR is not yet satisfied with its financial results and recognizes that it still has lots of work in front of it. "We've made great progress," Arpey said, "but we also realize the many challenges that lie ahead." Arpey pointed to the following progress in each of the four tenets of the AMR Turnaround Plan: -- Lower Costs To Compete: This is where AMR has made its most dramatic progress, underscored by an 11.9 percent decline in unit costs in the fourth quarter, excluding special items and regional affiliates. If not for rising fuel prices, AMR's progress would have been even more dramatic, with a year-over-year drop in unit costs of 12.8 percent. To further reduce costs, AMR has returned underused gate space, consolidated terminal space, depeaked its Chicago and Dallas/Fort Worth hub schedules (now adding Miami to that list), closed a reservations center, reduced the size of the St. Louis hub, accelerated the retirement of TWA aircraft, and improved aircraft utilization across the fleet. -- Fly Smart, Give Customers What They Value: This tenet focuses on customer service and revenue production, with emphasis on improving AMR's relative revenue performance. Key moves in this area are adding seats to American's 757 and A300 fleets and restructuring the mid-continent hubs at Chicago, DFW and St. Louis (next up, Miami). Another step is expanding alliances. Progress here includes a domestic codeshare with Alaska Airlines, approval of codesharing with British Airways, the addition of SWISS International to the oneworld alliance, and the new codeshare linkage with Mexicana. -- Pull Together, Win Together: Fostering greater cooperation than ever between the company and employees, AMR has adopted an unprecedented level of openness with employee groups and labor unions. Arpey holds regular Town Hall-style meetings with employees, AMR's chief financial officer meets monthly with union leaders to walk them through the company's financial results in the same way he briefs AMR's Board, and the Overland Group, a firm expert in bringing union groups and management together, has been engaged to help all parties within AMR move to a philosophy of active involvement. On Jan. 28 and 29, American will conduct its first Customer Strategy meeting with frontline employees to advance this process and improve the customer experience. -- Build A Financial Foundation For The Future: AMR ended the fourth quarter with $3.1 billion in total cash and short-term investments (including $527 million in restricted cash and short-term investments), substantially greater than the $1.8 billion in cash and short-term investments at the close of the first quarter. From April 1 to Dec. 31, AMR's cash flow from operations totaled $1.1 billion, giving AMR greater access to the capital markets. AMR also has been able to sell some non-core assets, such as its stakes in Worldspan and Hotwire. These are the first of many steps AMR will be taking over time to repair the damage done to its balance sheet as it works to overcome its financial crisis. American Airlines (Fitch, CCC+ Convertible Unsecured Note Rating, Negative) is the world's largest carrier. The airline's balance sheet liabilities exceed assets by more than $500 million. American, American Eagle and the AmericanConnection regional carriers serve more than 250 cities in over 40 countries with more than 3,900 daily flights. The combined network fleet numbers more than 1,000 aircraft. American's award-winning Web site, AA.com, provides users with easy access to check and book fares, plus personalized news, information and travel offers. American Airlines is a founding member of the oneworld Alliance. ANC RENTAL: Sues 75 Vendors to Recover $1.6 Million in Transfers ---------------------------------------------------------------- The ANC Rental Corporation Debtors seek to recover $1,589,444 paid to 75 vendors during the 90-day period prior to the Petition Date. The Debtors contend that these payments were preferential and are Avoidable Transfers pursuant to Section 550(a) of the Bankruptcy Code. The Debtors ask Judge Walrath to: -- direct these Vendors to return the money, plus interest and costs; and -- pursuant to Section 502(d), disallow any claim of the Vendors against the Debtors until the Vendors pay in full the amount owed. Headquartered in Fort Lauderdale, Florida, ANC Rental Corporation, is the world's third-largest publicly traded car rental company. The Company filed for chapter 11 protection on November 13, 2001 (Bankr. Del. Case No. 01-11200). Brad Eric Scheler, Esq., and Matthew Gluck, Esq., at Fried, Frank, Harris, Shriver & Jacobson represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $6,497,541,000 in assets and $5,953,612,000 in liabilities. (ANC Rental Bankruptcy News, Issue No. 46; Bankruptcy Creditors' Service, Inc., 215/945-7000) AURORA FOODS: Court Approves Debevoise as Committee's Counsel ------------------------------------------------------------- The Official Committee of Unsecured Creditors of the Aurora Foods Debtors sought and obtained the Court's authority to retain Debevoise & Plimpton LLP as its bankruptcy counsel, nunc pro tunc to December 18, 2003, to advise and represent it in the Debtors' Chapter 11 cases and in all related matters. Committee Chairperson, Kenneth Liang of OCM Opportunities Fund III, LP, relates that Debevoise's extensive experience and expertise in bankruptcy and insolvency matters, particularly business reorganizations under Chapter 11, and its expertise in representing creditors committees in Chapter 11 cases, makes the firm well qualified to represent the Committee in the Debtors' bankruptcy cases. Steven R. Gross, a partner at Debevoise, indicates that apart from the firm's representation as counsel, Debevoise will also: -- request the Committee members to apprise them of any reduction in the Committee's current ownership of their Senior Subordinated Notes; and -- promptly notify the Debtors when a Committee member holds less than 50% of the aggregate outstanding face amount of the Senior Subordinated Notes. Debevoise will be compensated based on the hourly rates of their professionals: Steven R. Gross $700 Andrew N. Berg 700 William D. Regner 555 Jonathan Levitsky 450 James B. Roberts 425 Jesko Kornemann 350 Maureen A. Cronin 310 Martin Phillips 190 The firm will also be reimbursed of its out-of-pocket expenses. Mr. Liang relates that Debevoise performed services for an ad hoc committee of holders of the Debtors' 8.75% Senior Subordinated Notes due 2008 and 9.875% Senior Subordinated Notes due 2007 beginning June 15, 2003 through December 18, 2003. As counsel to the Ad Hoc Committee, Debevoise: (a) amended the Merger Agreement to which the Debtors are parties; (b) drafted the documents governing the Delaware business trust, interests in which the holders of the Senior Subordinated Notes will receive with respect to their claims against the Debtors; (c) reviewed and provided comments on the Debtors' proposed Plan of Reorganization and Disclosure Statement; and (d) reviewed and provided suggestions on the Debtors' proposed ballots and election forms. All of the members of the Ad Hoc Committee were subsequently appointed to the Official Committee of Unsecured Creditors. According to Mr. Liang, Debevoise has been paid for all accrued time and expenses for its prepetition representation of the Ad Hoc Committee through the Petition Date totaling $1,249,618, inclusive and including estimated fees for December 5 to 7, 2003. Additionally, in connection with the execution of the Engagement Letter, Debevoise received a $200,000 cash retainer. Debevoise underestimated a portion of the final bill, thus, it applied the $70,047 arrearages against the Retainer. The amount applied against the Retainer is included in the $1,249,618. Debevoise has indicated to the Committee that it intends to apply the balance of the Retainer to: -- unpaid prepetition expenses; and -- fees and expenses accrued and incurred postpetition. Mr. Gross attests that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Aurora Foods Inc. -- http://www.aurorafoods.com/-- based in St. Louis, Missouri, produces and markets leading food brands, including Duncan Hines(R) baking mixes; Log Cabin(R), Mrs. Butterworth's(R) and Country Kitchen(R) syrups; Lender's(R) bagels; Van de Kamp's(R) and Mrs. Paul's(R) frozen seafood; Aunt Jemima(R) frozen breakfast products; Celeste(R) frozen pizza; and Chef's Choice(R) skillet meals. With $1.2 billion in reported assets, Aurora Foods, Inc., and Sea Coast Foods, Inc., filed for chapter 11 protection on December 8, 2003 (Bankr. D. Del. Case No. 03-13744), to complete a pre-negotiated sale of the company to J.P. Morgan Partners LLC, J.W. Childs Equity Partners III, L.P., and C. Dean Metropoulos and Co. Sally McDonald Henry, Esq., and J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom LLP provide Aurora with legal counsel, and David Y. Ying at Miller Buckfire Lewis Ying & Co., LLP provides financial advisory services. (Aurora Foods Bankruptcy News, Issue No. 5; Bankruptcy Creditors' Service, Inc., 215/945-7000) BARNEYS NEW YORK: Howard Socol Discloses 6.7% Equity Stake ---------------------------------------------------------- As of January 5, 2004, Howard Socol beneficially owned 992,234 shares of Barneys New York Inc.'s common stock, representing approximately 6.7% of the outstanding shares of common stock of the Company (based on the number of shares outstanding as of December 12, 2003 of 14,103,227 shares). Such shares include Options to purchase up to 396,117 shares of common stock which were exercisable as of January 5, 2004. The number of shares indicated as being beneficially owned by Mr. Socol does not include the shares of common stock held by Bay Harbour and Whippoorwill which are the subject of a stockholders agreement and with respect to which Mr. Socol disclaims beneficial ownership. Mr. Socol holds shared voting power over the 992,234 shares, and shares dispositive power over 792,234 of those shares. Pursuant to an employment agreement effective as of January 8, 2001, as amended on January 10, 2003, between the Company and Mr. Socol, Mr. Socol has been granted options to purchase up to 792,234 shares of common stock, which vest over the term of his employment. Options to purchase 396,117 shares of common stock are currently vested and Options to purchase the remaining 396,117 shares will vest on January 31, 2004. Pursuant to Rule 13d-3(d)(1)(i)(A) of the Securities Exchange Act of 1934, as of December 2, 2003, Mr. Socol is deemed to beneficially own the 396,117 shares that underlie the Options that vest on January 31, 2004 because he has the right to acquire such shares within 60 days. On January 10, 1996, Barney's, Inc. and subsidiaries filed voluntary petitions for reorganization under chapter 11 of the United States Bankruptcy Code. The Predecessor company's plan of reorganization was confirmed on December 21, 1998, by the U.S. Bankruptcy Court for the Southern District of New York, and became effective on January 28, 1999. As previously reported, Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Barneys New York Inc. Standard & Poor's also assigned its 'B-' rating to Barneys Inc.'s proposed $100 million senior secured notes due in 2008. The outlook is stable. BMC INDUSTRIES: Receives Bank Waiver Extension through March 15 --------------------------------------------------------------- BMC Industries, Inc. (OTCBB:BMMI) announced that its bank group has granted the company an additional waiver on certain covenants under its credit agreement. Following notice by BMC to its bank group that the company expected to be out of compliance with certain covenants and obligations under its credit agreement as of June 30, 2003, the company's banks granted an initial two-week waiver to BMC on June 30, 2003, and subsequent waivers on July 15, 2003, September 15, 2003, and November 19, 2003. The waiver announced also extends the time period for BMC to make certain scheduled principal and fee payments, and defers all interest payment obligations until March 15, 2004, the termination date of this waiver extension. In addition, the agreement continues to require the company to remit net proceeds of asset sales and certain other cash flows to its lenders in partial repayment of interest and principal obligations. Since July 30, 2003, the date of the first interest deferral, the company has incurred interest obligations of $4.4 million and made interest payments of $2.4 million. The latest waiver agreement defers current and projected interest payments totaling approximately $3.3 million, subject to certain mandatory repayments to lenders. As in previous waivers, the banks and the company have agreed that no additional borrowings will be extended during the waiver period. Discussions continue between BMC, its banks and the company's advisors, regarding a longer-term financial resolution. BMC Industries Inc., founded in 1907, is currently comprised of two business segments: Optical Products and Buckbee-Mears. The Optical Products group, operating under the Vision-Ease Lens trade name, is a leading designer, manufacturer and distributor of polycarbonate and glass eyewear lenses. Vision-Ease Lens also distributes plastic eyewear lenses. Vision-Ease Lens is a technology and a market share leader in the polycarbonate lens segment of the market. Polycarbonate lenses are thinner and lighter than lenses made of other materials, while providing inherent ultraviolet (UV) filtering and impact resistant characteristics. The Buckbee-Mears group is the only North American manufacturer of aperture masks, a key component in color television picture tubes. The company has announced its plans to wind down the operations of its Buckbee-Mears division by June 2004. For more information about BMC Industries, visit the company's Web site at http://www.bmcind.com/ BOISE CASCADE: Frontier Resources Acquires Boise's Yakima Mills --------------------------------------------------------------- Boise Cascade Corporation (NYSE: BCC) reached agreement for the sale of its Yakima, Washington, plywood plant and sawmill complex to Frontier Resources, LLC, of Eugene, Oregon. Thomas A. Lovlien, vice president, Boise Building Solutions, Manufacturing, said the company's decision to sell the Yakima facilities followed two years of evaluations in which numerous options had been considered. "In this instance," Lovlien said, "the outcome of our studies is a sale agreement with a qualified buyer, Frontier Resources." Lovlien said Boise will retain ownership of its approximately 200,000 acres of central Washington timberlands and will continue to manage those holdings under the company's forestry programs and environmental policies. Frontier Resources has indicated that it is now in process of developing its future plans for the acquired properties. With the sale, Boise Building Solutions, a division of Boise, operates 23 manufacturing facilities in the United States, Canada, and Brazil. The business also operates 28 facilities that distribute a broad line of building materials, including wood products manufactured by Boise, to retail lumber dealers, home centers specializing in the do-it-yourself market, and industrial customers. Boise (S&P, BB+ Corporate Credit Rating, Stable Outlook), headquartered in Boise, Idaho, provides solutions to help customers work more efficiently, build more effectively, and create new ways to meet business challenges. Boise is a major distributor of office products and building materials and an integrated manufacturer and distributor of paper, packaging, and wood products. Boise owns or controls more than 2 million acres of timberland, primarily in the United States, to support our manufacturing operations. Visit the Boise Web site at http://www.bc.com/ BOYD GAMING: Declares Quarterly Cash Dividend Payable on March 2 ---------------------------------------------------------------- Boyd Gaming Corporation (NYSE: BYD) announced that its Board of Directors has declared a quarterly cash dividend of $.075 per share, payable on March 2, 2004 to shareholders of record on February 13, 2004. Headquartered in Las Vegas, Boyd Gaming Corporation (NYSE: BYD) (Fitch, BB+ Senior Secured Bank Credit Facility and BB- Senior Unsecured Debt Ratings) is a leading diversified owner and operator of 13 gaming entertainment properties located in Nevada, New Jersey, Mississippi, Illinois, Indiana and Louisiana. Boyd Gaming recently opened Borgata Hotel Casino and Spa at Renaissance Pointe (AOL keyword: borgata or http://www.theborgata.com/), a $1.1 billion entertainment destination hotel in Atlantic City, through a joint venture with MGM MIRAGE. Additional news and information on Boyd Gaming can be found at http://www.boydgaming.com/ BOYD GAMING: Will Publish Fourth-Quarter Results on February 4 -------------------------------------------------------------- Boyd Gaming Corporation (NYSE: BYD) announced that the Company's fourth quarter 2003 conference call to review the Company's results will take place on Wednesday, February 4, 2004 at 4:30 p.m. EDT. The conference call number is 800-361-0912 and the reservation number is 711739. Please call up to 15 minutes in advance to ensure you are connected prior to the call's initiation. The Company will report its results on the same day at approximately 4:00 p.m. EDT. The conference call will also be available live on the Internet at http://www.boydgaming.com/or http://www.firstcallevents.com/service/ajwz397631017gf12.html/ Following the call's completion, a replay will be available by dialing 888-203-1112 or 719-457-0820 with the reservation number on Wednesday, February 4, beginning two hours after the completion of the call and continuing through Wednesday, February 11. The replay will also be available on the Internet at http://www.boydgaming.com/ Headquartered in Las Vegas, Boyd Gaming Corporation (NYSE: BYD) (Fitch, BB+ Senior Secured Bank Credit Facility and BB- Senior Unsecured Debt Ratings) is a leading diversified owner and operator of 13 gaming entertainment properties located in Nevada, New Jersey, Mississippi, Illinois, Indiana and Louisiana. Boyd Gaming recently opened Borgata Hotel Casino and Spa at Renaissance Pointe (AOL keyword: borgata or http://www.theborgata.com), a $1.1 billion entertainment destination hotel in Atlantic City, through a joint venture with MGM MIRAGE. Additional news and information on Boyd Gaming can be found at http://www.boydgaming.com/ BRIDGEWATER: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Bridgewater Enterprises Ltd dba Bridgewater Custom Sound P.O. Box 135 South Holland, Illinois 60473 Bankruptcy Case No.: 04-02142 Type of Business: The Debtor provides professional audio and video sales and rentals. Designs, installs, and services audio systems organizations. See http://www.bridgewatersound.com/ Chapter 11 Petition Date: January 20, 2004 Court: Northern District of Illinois (Chicago) Judge: Eugene R. Wedoff Debtor's Counsel: David E. Grochocinski, Esq. Grochocinski Grochocinski & Lloyd 800 Ravinia Place Orland Park, IL 60462 Tel: 708-226-2700 Total Assets: $1,030,000 Total Debts: $937,382 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Huen Electric Inc. open account $62,496 West Penn Wire/CDT open account $31,053 Pro-Co Sound Inc. open account $16,747 Insurance Service, Inc. open account $14,461 Gapco International Inc. open account $14,001 Bose Corporation open account $12,791 Advertising Plus, Inc. open account $11,384 AAA Rental System open account $9,849 Steiner Electric Co. open account $8,199 RCMS open account $8,050 Turbosound, Inc. open account $6,140 Harman Pro North America open account $4,445 Middle Atlantic Products open account $4,152 Sennheiser Electronic Corp. open account $4,024 Newark Inone open account $2,772 Emerald Financia open account $2,566 Fender Pro Audio open account $2,536 Home Depot CRC open account $2,508 Witte Electric open account $2,500 Wright Express - Fleet open account $2,477 Fueling BUDGET GROUP: Court Allows Payment of Linda Burch's Success Fee --------------------------------------------------------------- U.S. Bankruptcy Court Judge Case, overseeing the Budget Group Debtors' bankruptcy proceedings, approves the Committee's supplemental application to provide Ms. Linda Burch with a $50,000 success fee in the event she materially contributes to a settlement between Cendant and the Debtors regarding Cendant's assumption of certain vehicle personal injury claims. Backgrounder On February 20, 2003, the Court permitted the Committee to retain Linda Burch as Rental Vehicle Business Advisor in the Chapter 11 cases of Budget Group Inc. and its debtor-affiliates, nunc pro tunc to December 2002. Ms. Burch was allowed to charge the Committee $250 per hour for her services, in addition to costs and expenses incurred. After the North American Sale, the Committee asked Ms. Burch for advice regarding the disposition of the Debtors' remaining business operations in Europe. Ms. Burch assisted the Committee in analyzing the rental vehicle business operations in Europe and in determining whether to approve the EMEA Sale. Because a dispute arose between the Debtors and Cendant regarding certain terms of the Asset and Stock Purchase Agreement, on May 5, 2003, the Debtors commenced an adversary proceeding against Cendant seeking the Court's enforcement of certain ASPA terms. The Cendant Litigation is currently ongoing. Among the disputes between the Debtors and Cendant is Cendant's refusal to fulfill its contractual obligations under the ASPA to assume the liability for certain of the vehicle personal injury claims asserted against the Debtors. If Cendant does not assume the vehicle personal injury claims as it was required to do under the ASPA, the potential exposure to the Debtors' estates of these personal injury claims will amount to over $68,000,000. The Committee sought Ms. Burch's assistance with the Cendant Litigation, specifically the resolution of the dispute with Cendant regarding the assumption of certain vehicle personal injury claims. Headquartered in Daytona Beach, Florida, Budget Group, Inc., operates under the Budget Rent a Car and Ryder names -- is the world's third largest car and truck rental company. The Company filed for chapter 11 protection on July 29, 2002 (Bankr. Del. Case No. 02-12152). Lawrence J. Nyhan, Esq., and James F. Conlan, Esq., at Sidley Austin Brown & Wood and Robert S. Brady, Esq., and Edward J. Kosmowski, Esq., at Young, Conaway, Stargatt & Taylor, LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $4,047,207,133 in assets and $4,333,611,997 in liabilities. (Budget Group Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service, Inc., 215/945-7000) CANWEST GLOBAL: First-Quarter 2004 Results Show Solid Growth ------------------------------------------------------------ CanWest Global Communications Corp., reported its financial results for the three months ended November 30, 2003, the first quarter of its 2004 fiscal year. Consolidated net earnings were $81 million or $0.46 per share, representing a 19% increase from the $68 million or $0.39 per share reported for the first quarter of fiscal 2003. On a combined basis, including the Company's 57.0% proportional share of Network TEN, earnings before interest, taxes, depreciation and amortization (EBITDA) were $208 million. This result reflects a small improvement from the pro forma combined EBITDA of $207 million recorded for the same period last year. Combined revenues of $719 million for the quarter were in line with pro forma combined revenues for the same quarter last year. Actual combined revenues for the prior year were $740 million. Pro forma results for fiscal 2003 provide a comparison based upon the same asset base as existed for the period ended November 30, 2003. Pro forma results for the quarter ended November 30, 2002 therefore exclude the revenue and EBITDA contributions of certain newspapers assets in Ontario that were sold on February 15, 2003. On a consolidated basis, revenues for the three month period ended November 30, 2003 were $586 million compared to consolidated revenues of $634 million for the same period in the previous year. On a pro forma basis revenues were $610 million for the first quarter of fiscal 2003. Consolidated EBITDA in the first quarter of fiscal 2004 was $153 million compared to reported EBITDA of $177 million for the first quarter of fiscal 2003. On a pro forma basis, consolidated EBITDA for the first quarter of fiscal 2003 was $170 million. Overall, strong revenue performances in the Company's South Pacific operations, particularly Network TEN, were offset by reductions in revenue from Canadian broadcast operations and Entertainment division. After relatively strong performance during the summer months the Canadian television industry experienced declining advertising sales in the quarter, and results from the Company's broadcast operations reflect that overall market weakness, where revenues for the quarter were $191 million this year compared to $215 million in the same period last year. The decline in revenue had a direct impact on EBITDA, reducing EBITDA to $56 million in the current quarter compared to $81 million for the same quarter in the prior period. Entertainment revenues were $34 million, down from $48 million last year, reflecting the division's reduced production slate and continuing weak demand for programming in international markets. A steady newspaper advertising market contributed to publishing revenues of $303 million, up 2% from pro forma revenues of $297 million for the corresponding period last year. Stable newsprint pricing and operating cost reductions resulted in an increase in EBITDA for the quarter of 11% to $83 million from the pro forma result of $75 million for the first quarter of fiscal 2003. The Company's international operations registered significant gains in the quarter. Network TEN reported record quarterly television revenues and EBITDA, with CanWest's 57.0% interest in TEN's EBITDA increasing by 42% to $53 million compared to $37 million in the same period last year. TEN again led the Australian television industry in ratings in its target 16-39 demographic, while also making gains in overall ratings. Eye Corp, TEN's out-of-home advertising division, also registered significant improvements with a 10% increase in revenues to $11 million, and generating EBITDA of over $2 million for the quarter. The Company's 3 and C4 Television Networks in New Zealand (formerly referred to as TV3 and TV4 respectively) reported aggregate EBITDA of $10 million, a 36% increase from the $7 million for the first quarter of fiscal 2003. New Zealand radio operations registered a 32% increase in EBITDA to $7 million compared to $5 million for the first quarter of fiscal 2003. CanWest's 45% interest in TV3 Ireland's EBITDA was $4 million for the quarter, about the same as last year. Highlights for the quarter and the period since November 30, 2003 include the following: - Global's Survivor VII continues to be the highest rated television program in both the Toronto and Vancouver markets among both 18-49 year olds and 25-54 year olds. During the fall ratings period, CanWest had 12 of the top 25 programs in Toronto and 17 of the top 25 in Vancouver among 18-49 year olds, compared to 10 and 5 programs respectively for its main competitor. - In October, CanWest re-launched TV4, the Company's second television network in New Zealand, as C4, a music channel geared to youth and young adult audiences. Initial audience response to the new format has been very positive and, given the relatively low production costs of the new format, the Company is optimistic that C4 will reverse the losses incurred by TV4 in recent years. TV3 had previously been re-branded as 3 Television. - In November, CanWest launched a new four tiered-system for access to its online services including a new electronic version of the Ottawa Citizen that provides subscribers with 5:00 a.m. Internet access to their daily newspaper in the same format as the home delivered paper. This new subscription service became available for the National Post in January and will roll out at other CanWest newspapers over the next several months. - In October, the Company announced the appointment of the Honourable Frank McKenna P.C. Q.C. as Interim Chairman of the Board, following the sudden passing on October 7, 2003 of I.H. Asper O.C., O.M., Q.C. - On December 17, the company announced the nomination of two new independent directors, Mr. Paul V. Godfrey and Professor Ronald J. Daniels, both of Toronto, Ontario, to stand for election to the Company's Board of Directors at the forthcoming annual general meeting of shareholders to be held in Montreal on January 29th, 2004. - In December, Network TEN, secured a new five-year A$700 million syndicated loan facility on favourable terms, that will help to reduce TEN's financing costs. - In January, the Company received the previously announced distributions of interest and dividends from Network TEN. In total the Company received $100 million (A$103.5 million). Commenting on the results, Leonard Asper, CanWest's President and Chief Executive Officer, said, "For the most part, CanWest's media operations performed well, particularly our television operations in Australia and New Zealand, which outpaced the growth of the television industries and the overall economies of those countries. Our newspapers also experienced year-over-year gains, during a period in which the Canadian economy was still recovering from the well-known setbacks from SARS, massive forest fires, Mad Cow disease and a power blackout in Ontario during the summer months. However, the Canadian television market struggled during the quarter, and declining advertising sales evident across the television industry in the Fall months did not reflect the improving Canadian economy." "Looking ahead we expect the positive momentum of our international operations to continue. In Canada we remain optimistic that advertising markets will increasingly reflect the underlying health in the Canadian economy and there are signs that this is beginning to occur. The Fall schedule of Global Television includes a number of promising new shows, including The Apprentice and Average Joe, that should add positive momentum to our television operations. The Company continues to focus on cost savings through aggressive pursuit of operating efficiencies, while also registering revenue gains from the sale of multi-media advertising packages at both local and national levels. As before, our main priorities are to accelerate the reduction of corporate debt, improve operating margins and increase profits," Asper added. The Company's financial statements are available on the corporate Web site http://www.canwestglobal.com/ CanWest Global Communications Corp. (S&P, B+ Long-Term Corporate Credit and Senior Unsecured Ratings, Stable) (NYSE: CWG; TSX: CGS.S and CGS.A) -- http://www.canwestglobal.com/-- is an international media company. CanWest, Canada's largest publisher of daily newspapers, owns, operates and/or holds substantial interests in newspapers, conventional television, out-of-home advertising, specialty cable channels, radio networks and web sites in Canada, New Zealand, Australia, Ireland and the United Kingdom. The Company's program production and distribution division operates in several countries throughout the world. CRESCENT REAL: Reports Dividend Distributions Taxable Allocations ----------------------------------------------------------------- Crescent Real Estate Equities Company (NYSE:CEI) announced the taxable allocations of the 2003 dividend distributions on its common shares, 6-3/4% Series A Convertible Preferred Shares, and 9.50% Series B Redeemable Preferred Shares. Shareholders are encouraged to consult with their personal tax advisors as to their specific tax treatment of Crescent Real Estate dividends. Crescent Real Estate Equities Company (NYSE:CEI) is one of the largest publicly held real estate investment trusts in the nation. Through its subsidiaries and partners, Crescent owns and manages a portfolio of over 75 premier office buildings totaling over 30 million square feet primarily located in the Southwestern United States, with major concentrations in Dallas, Houston, Austin and Denver. In addition, the company has investments in world-class resorts and spas and upscale residential developments. * * * As previously reported in Troubled Company Reporter, Standard & Poor's affirmed its ratings on Crescent Real Estate Equities Co., and Crescent Real Estate Equities L.P., and removed them from CreditWatch, where they were placed on Jan. 23, 2002. The outlook remains negative. Ratings Affirmed And Removed From CreditWatch Issue To From Crescent Real Estate Equities Co. Corporate credit rating BB BB/Watch Neg $200 million 6-3/4% preferred stock B B/Watch Neg $1.5 billion mixed shelf prelim B/B+ prelim B/B+/Watch Neg Crescent Real Estate Equities L.P. Corporate credit rating BB BB/Watch Neg $150 million 6 5/8% senior unsecured notes due 2002 B+ B+/Watch Neg $250 million 7 1/8% senior unsecured notes due 2007 B+ B+/Watch Neg CUMULUS MEDIA: Will Host 4th-Quarter Conference Call on Feb. 17 --------------------------------------------------------------- Cumulus Media Inc. (NASDAQ: CMLS), will host a conference call on Tuesday, February 17, 2004 at 5 p.m. ET to review the Company's fourth quarter 2003 financial results, which will be released shortly after market close and prior to the call, together with an update of financial and operational developments. The call will be open to the general public on a listen only basis. The conference call dial in number is (484) 630-8922 for both domestic and international calls. The pass code for the call is CUMULUS. Please call five to ten minutes in advance to ensure that you are connected prior to the presentation. The call may also be accessed via webcast at http://www.cumulus.com/ Immediately after completion of the call, a replay can be accessed until 11:59 p.m. ET Tuesday, February 24, 2004. Domestic and international callers can access the replay by dialing (402) 220- 9730. Cumulus Media Inc. (S&P, B+ Corporate Credit Rating, Stable Outlook) is the second largest radio company in the United States based on station count. Giving effect to the completion of all announced pending acquisitions and divestitures, Cumulus Media Inc. will own and operate 272 radio stations in 56 mid-size and smaller U.S. media markets. The Company's headquarters are in Atlanta, Georgia, and its Web site is http://www.cumulus.com/ Cumulus Media Inc. shares are traded on the NASDAQ National Market under the symbol: CMLS. DDI CORP: Completes $16 Million Common Stock Private Placement -------------------------------------------------------------- DDi Corp. (OTC Bulletin Board: DDIO), a leading provider of time- critical, technologically advanced interconnect services for the electronics industry, completed a private placement of 1,000,000 shares of restricted common stock to institutional investors for gross proceeds of $15,980,000, before placement fees and offering expenses. The shares were priced at $15.98 per share, which represents a discount against the trading price of the Company's common stock as of January 9, 2004. DDi has agreed to file a resale registration statement within 30 days after the closing of the transaction for purposes of registering the shares of common stock. DDi intends to use the net proceeds to reduce outstanding debt and for general corporate purposes. DDi is a leading provider of time-critical, technologically advanced, electronics manufacturing services. Headquartered in Anaheim, California, DDi and its subsidiaries offer fabrication and assembly services to customers on a global basis, from its facilities located across North America and in England. DESC S.A.: Fitch Rates Foreign & Local Currency Rating at B+ ------------------------------------------------------------ Fitch Ratings assigned a senior secured foreign and local currency rating of 'B+' to Desc, S.A. de C.V., and downgraded the senior unsecured debt rating to 'B' from 'B+'. Fitch has also downgraded Desc's national scale rating to 'BBB-'(mex) from 'BBB'(mex). Fitch has taken all of Desc's ratings off of Rating Watch Negative. The Rating Outlook is Stable. The rating actions reflect the conclusion of a debt refinancing process with bank creditors for approximately US$720 million or 70% of the company's debt. The restructuring agreements will refinance the majority of Desc's short-term debt and prior syndicated loans. The final terms of the restructuring include a five-year tenor with a 30-month grace period beginning in January 2004, a US$40 million pre-payment to bank creditors and higher interests rates, which may be reduced based on improvements in financial ratios. Under the new loan agreements, Desc has granted security in the form of fixed assets and equity shares of the holding and operating companies. Under contractual covenants of credit agreements with the International Finance Corporation and under the dine senior notes due 2007, creditors of Desc's under these agreements will also be granted security so that the majority of Desc's existing debt will be secured. The new national scale rating on Desc's medium term notes (Pagares de Mediano Plazo) due 2006 and 2007 considers the structural subordination of these instruments to the reminder of Desc's indebtedness. Desc is one of Mexico's largest industrial conglomerates, with operations in automotive parts, chemicals (petrochemicals, phosphates, laminates, additives and particleboard), food (production and sale of pork and branded food products) and real estate (acquisition and development of land for upper-income commercial, residential and tourism). DII INDUSTRIES: KBR Secures Nod to Assume Barracuda Agreements -------------------------------------------------------------- At the DII Industries, LLC, and Kellogg, Brown & Root Debtors' request, the U.S. Bankruptcy Court for the Western District of Pennsylvania: (a) authorizes Kellogg, Brown & Root, Inc. to assume a Contract and a Patent Sublicense Agreement with Barracuda & Caratinga Leasing Company, B.V., the EPC Contractor Consent and Agreement with Barracuda and one of the Senior Project Lenders, the Limited Waiver and Consent Agreement among the parties to the Barracuda Contract, and any other agreements to which KBR is party in connection with its work under the Barracuda Contract; and (b) lifts the automatic stay to allow counterparties to the Barracuda Contract, Patent Sublicense Agreement, the Consent Agreement and any other agreements to which KBR is a party in connection with its work under the Barracuda Contract being assumed to exercise all rights and remedies under the Agreements. On June 30, 2000, KBR entered into a contact with Barracuda, which is the project owner, to develop the Barracuda and Caratinga crude oil fields, which are located off the coast of Brazil. Barracuda's representative for the Barracuda Project is Petroleo Brasilero SA, the Brazilian national oil company. When completed, the Barracuda Project will consist of two converted supertankers that will be used as floating production, storage and offloading platforms, 33 hydrocarbon production wells, 18 water injection wells and all sub-sea flow lines and risers necessary to connect the underwater wells to the FPSOs. Eric T. Moser, Esq., at Kirkpatrick & Lockhart LLP, in Pittsburgh, Pennsylvania, notes that KBR's performance under the Barracuda Contract is secured by: (a) three performance letters of credit, which together have a $266,000,000 available credit as of June 30, 2003; (b) a retainage letter of credit in an amount equal to $141,000,000 as of June 30, 2003; and (c) a guarantee of KBR's performance of the Barracuda Contract by Halliburton in favor of Barracuda. In the event that KBR is alleged to be in default under the Barracuda Contract, Barracuda may assert a right to draw on the Letters of Credit. If the Letters of Credit were to be drawn, KBR would be required to fund the amount of the draw to the issuing banks. To the extent KBR cannot fund the amount of the draw, Halliburton would be required to do so, which could have a material adverse effect on Halliburton's ability to obtain funding from its lenders and, in turn, finance the Plan, and adversely impact its operation results. In the event that KBR was determined after an arbitration proceeding to have been in default under the Barracuda Contract, and if the Barracuda Project was not completed by KBR as a result of that default, Barracuda may seek direct damages against KBR for up to $500,000,000 plus the return of $300,000,000 in advance payments previously received by KBR to the extent they have not been repaid. Mr. Moser contends that Barracuda's termination of the Contract could have a material adverse effect on the Halliburton Group's financial condition and results of operation, which would, in turn, adversely affect its ability to fund the Plan. As of June 30, 2003, the Barracuda Project was 75% complete and KBR had recorded a pretax loss of $345,000,000 related to the Barracuda Project, of which $173,000,000 was recorded in the second quarter of 2003. The parties have significant on-going disputes regarding the responsibility for delays in the completion of the Barracuda Project. The probable unapproved claims for compensation by KBR included in determining the loss on the Barracuda Project were $182,000,000 as of June 30, 2003. If the probable unapproved claims are not recovered, the $182,000,000 will be added to the $345,000,000, for a total loss of $527,000,000 on the Barracuda Project. KBR's claims for compensation for the Barracuda Project most likely will not be settled within one year and will likely result in expensive and protracted litigation between the parties.