Cox sees brighter days in 2003

By Susan Rush
From The September 11, 2002 Edition Of CED Broadband Direct

Cox Communications Inc. will be seeing black a little sooner than it had expected. The MSO plans to reduce capital expenditures to achieve free cash flow positive for the entire year 2003.

The company expects to slash capital expenditures from $2 billion in 2002 to $1.6 billion in 2003, Chief Financial Officer Jimmy Hayes said Monday during a Morgan Stanley 7th Annual Global Communications Conference. The $400 million reduction in expenditures is mostly attributed to the fact that the company's network upgrades are nearly complete. Eighty nine percent of the company's network will be upgraded to at least 750 MHz by the end of this year, Hayes said. Of Cox's network footprint, 95 percentof homes passed are able to order Cox Digital Cable and Cox High Speed Internet services.

Originally, Cox had expected to achieve free cash flow positive in the fourth quarter 2003. Brokerage firm First Albany has reiterated Cox as a "strong buy."

Cox also expects to expand operating margins above 35 percent in the "coming years" as it shifts its focus from network upgrades to "a concentration on the accelerated delivery of additional advanced broadband services and products more efficiently."