ALLTEL Reports Solid Second-Quarter Results.Business Editors LITTLE ROCK, Ark.--(BUSINESS WIRE)--July 25, 2002 ALLTEL ALLTEL Corporation (NYSE: AT) is an American telecommunications company with headquarters in Little Rock, Arkansas. Alltel provides wireless services to residential and business customers in 35 states. (NYSE NYSE See: New York Stock Exchange :AT) today announced solid second-quarter results that reflect double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. growth from current businesses, which excludes special charges and unusual items. The company reported fully diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of from current businesses of 79 cents, an 11 percent increase from the 71 cents reported a year ago. Including special charges and unusual items, the company reported fully diluted earnings per share under Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) of 69 cents, compared with 70 cents reported a year ago. Among the highlights from current businesses in the second quarter: -- Net income was $247 million, an 11 percent increase on revenues of $1.9 billion. -- Wireless operations added 80,197 net new customers, exceeding the company's expectations. -- Wireless customer churn was 2.19 percent, the third sequential quarter of improvement. -- Wireless revenues were more than $1 billion and cash flow (measured as operating income plus depreciation and amortization) increased 2 percent over the previous year to $365 million. -- Wireline revenues were $497 million and cash flow increased 1 percent over the previous year to $288 million. Wireline operations include Internet and competitive local exchange carrier (CLEC) operations. -- Communications Support Services revenues were $209 million and cash flow was $24 million. This segment includes the long-distance, publishing and product-supply businesses. -- Information Services revenues were $256 million and operating income was $41 million, a 10 percent increase over the previous year. "ALLTEL continues to succeed in delivering solid earnings and customer growth in a tough economic climate," said Scott Ford Founding bassist for LA supergroup Camp Freddy. Current bassist for The Twilight Singers. Scott Ford hosts a 3 hour show on Internet Radio Station Little Radio on Thursdays. , ALLTEL president and chief executive officer. "ALLTEL remains in a strong overall financial condition, which gives the company a solid base to continue to grow its businesses." In the second quarter, ALLTEL raised about $2.8 billion from the sale of mandatory convertible Mandatory Convertible A type of convertible bond that has a required conversion or redemption feature. Either on or before a contractual conversion date, the holder must convert the mandatory convertible into the underlying common stock. notes and senior notes while maintaining the company's A/A A/A As Above A/A Answers All (swapping) A/A Air-to-Air A/A Angle of Attack A/A Acquisition Authority A/A Autoanswer A/A Analysis of Accounts A/A Attack Assessment A/A Analyst-to-Analyst A/A Advice of Allotment 2/A credit rating. These proceeds will be used to fund ALLTEL's pending acquisitions of Verizon Communications' local telephone business in Kentucky Kentucky, state, United States Kentucky (kəntŭk`ē, kĭn–), one of the so-called border states of the S central United States. It is bordered by West Virginia and Virginia (E); Tennessee (S); the Mississippi R. and CenturyTel CenturyTel, Inc. (NYSE: CTL) formerly named Century Telephone Enterprises, Inc. is a United States telecommunications firm, headquartered in Monroe, Louisiana. Inc.'s wireless operations. The acquisitions will add about 1.3 million customers. As reported in ALLTEL's 2001 Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. report, ALLTEL changed its business segment reporting Business segment reporting Reporting the results of the separate divisions or subsidiaries of a business. presentation in the first quarter of 2002. All comparisons to prior period results contained in this release have been made after giving effect to the reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. of prior period results for ALLTEL's new segment presentation. Supplemental financial data that reclassifies prior period results commencing with 1999 to reflect this new segment reporting segment reporting A type of financial reporting in which the firm discloses information by identifiable industry segments. For example, Union Pacific Corporation reports revenues, income, assets, depreciation, and capital expenditures for each of four presentation have been filed with the Securities and Exchange Commission on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. , dated April 25, 2002. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP, the 2001 results reflect charges for the amortization of goodwill and other intangibles Property that is a "right" such as a patent, Copyright, or trademark, or one that is lacking physical existence, such as good will. that were discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: starting in the current year in accordance with the recently effective accounting rule, SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 142. The financial data that accompany To go along with; to go with or to attend as a companion or associate. A motor vehicle statute may require beginning drivers or drivers under a certain age to be accompanied by a licensed adult driver whenever operating an automobile. this release contain disclosure of EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become or earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. plus depreciation and amortization. Although these measures are widely accepted financial concepts and are considered by ALLTEL's management to be useful measures, they may not be comparable to similarly titled measures used by other companies and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. ALLTEL claims the protection of the safe-harbor for forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. contained in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Forward-looking statements are subject to uncertainties that could cause actual future events and results to differ materially from those expressed in the forward-looking statements. These forward-looking statements are based on estimates, projections, beliefs and assumptions and are not guarantees of future events and results. Actual future events and results may differ materially from those expressed in these forward-looking statements as a result of a number of important factors. Representative examples of these factors include (without limitation) adverse changes in economic conditions in the markets served by ALLTEL; the extent, timing, and overall effects of competition in the communications business; material changes in the communications industry communications industry, broadly defined, the business of conveying information. Although communication by means of symbols and gestures dates to the beginning of human history, the term generally refers to mass communications. generally that could adversely affect vendor relationships with equipment and network suppliers and customer relationships with wholesale customers; material changes in communications technology Noun 1. communications technology - the activity of designing and constructing and maintaining communication systems engineering, technology - the practical application of science to commerce or industry ; the risks associated with the integration of acquired businesses; adverse changes in the ratings given to our debt securities by nationally accredited accredited recognition by an appropriate authority that the performance of a particular institution has satisfied a prestated set of criteria. accredited herds cattle herds which have achieved a low level of reactors to, e.g. ratings organizations; the availability and cost of financing in the corporate debt markets; ongoing deregulation Deregulation The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry. Notes: Traditional areas that have been deregulated are the telephone and airline industries. (and the resulting likelihood of significantly increased price and product/service competition) in the communications business as a result of federal and state legislation, rules, and regulations; and the final outcome of federal, state and local regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. initiatives and proceedings related to the terms and conditions of interconnection in·ter·con·nect v. in·ter·con·nect·ed, in·ter·con·nect·ing, in·ter·con·nects v.intr. To be connected with each other: The two buildings interconnect. v.tr. , access charges, universal service and unbundled network elements Unbundled Network Elements (UNE) are a requirement mandated by the United States Telecommunications Act of 1996. They are the parts of the telecommunications network that the incumbent local exchange carriers (ILECs) are required to offer on an unbundled basis. and resale resale n. selling again, particularly at retail. In many states a "resale license" or "resale number" is required so that the state can monitor the collection of sales tax on retail sales. RESALE. rates. ALLTEL, with more than 10 million communications customers and more than $7.5 billion in annual revenues, is a leader in the communications and information services See Information Systems. industries. ALLTEL has communications customers in 24 states and provides information services to telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. , financial and mortgage clients in more than 50 countries. ALLTEL, NYSE: AT www.alltel.com
ALLTEL CORPORATION
CONSOLIDATED HIGHLIGHTS
(Dollars in thousands, except per share amounts)
THREE MONTHS ENDED
Increase
June 30, June 30, (Decrease)
FROM CURRENT BUSINESSES (A) 2002 2001 Amount %
---- ---- ------ -
REVENUES AND SALES:
Wireless $ 1,002,725 $ 965,183 $ 37,542 4
Wireline 497,206 487,949 9,257 2
Communications support services 209,283 218,304 (9,021) (4)
Information services 255,971 269,701 (13,730) (5)
Total business segments 1,965,185 1,941,137 24,048 1
Less: intercompany eliminations 40,796 42,055 (1,259) (3)
Total revenues and sales $ 1,924,389 $ 1,899,082 $ 25,307 1
EBITDA:
Wireless $ 364,957 $ 356,550 $ 8,407 2
Wireline 288,459 286,835 1,624 1
Communications support services 24,469 27,256 (2,787) (10)
Information services 64,093 61,319 2,774 5
Total business segments 741,978 731,960 10,018 1
Corporate expenses 5,048 3,867 1,181 31
Total EBITDA $ 736,930 $ 728,093 $ 8,837 1
OPERATING INCOME:
Wireless $ 227,384 $ 202,037 $ 25,347 13
Wireline 181,359 184,247 (2,888) (2)
Communications support services 17,806 22,180 (4,374) (20)
Information services 41,381 37,560 3,821 10
Total business segments 467,930 446,024 21,906 5
Corporate expenses 8,788 9,093 (305) (3)
Total operating income 459,142 436,931 22,211 5
Equity earnings in
unconsolidated partnerships 13,741 17,130 (3,389) (20)
Minority interest in
consolidated partnerships (17,682) (18,645) (963) (5)
Other income, net 5,347 9,211 (3,864) (42)
Interest expense (62,405) (72,538) (10,133) (14)
Income before income taxes 398,143 372,089 26,054 7
Income taxes 151,179 149,439 1,740 1
Net income 246,964 222,650 24,314 11
Preferred dividends 32 37 (5) (14)
Net income applicable to
common shares $ 246,932 $ 222,613 $ 24,319 11
EARNINGS PER SHARE:
Basic $.79 $.71 $.08 11
Diluted $.79 $.71 $.08 11
CONSOLIDATED STATEMENTS OF INCOME - AS REPORTED
THREE MONTHS ENDED
June 30, June 30,
2002 2001
---- ----
Revenues and sales:
Service revenues $ 1,739,846 $ 1,687,655
Product sales 184,543 211,427
Total revenues and sales 1,924,389 1,899,082
Costs and expenses:
Operations 977,056 924,887
Costs of products sold 224,403 246,102
Depreciation and amortization 277,788 291,162
Integration expenses and other charges 9,022 2,097
Total costs and expenses 1,488,269 1,464,248
Operating income 436,120 434,834
Equity earnings in unconsolidated partnerships 13,741 17,130
Minority interest in consolidated partnerships (17,682) (18,645)
Other income, net 9,638 9,211
Interest expense (80,218) (72,538)
Gain (loss) on disposal of assets, write-down
of investments and other (13,739) (4,892)
Income before income taxes 347,860 365,100
Income taxes 131,692 146,619
Income before cumulative effect of accounting
change 216,168 218,481
Cumulative effect of accounting
change (net of income taxes) - -
Net income 216,168 218,481
Preferred dividends 32 37
Net income applicable to common shares $ 216,136 $ 218,444
Basic earnings per share:
Income before cumulative effect of accounting
change $0.70 $0.70
Cumulative effect of accounting change - -
Net income $0.70 $0.70
Diluted earnings per share:
Income before cumulative effect of accounting
change $0.69 $0.70
Cumulative effect of accounting change - -
Net income $0.69 $0.70
Adjusted amounts assuming change in accounting
for goodwill and other indefinite-lived
intangibles applied retroactively:
Net income as reported $ 216,168 $ 218,481
Amortization of indefinite-lived
intangible assets, net of tax - 22,189
Adjusted net income $ 216,168 $ 240,670
Basic earnings per share as reported $0.70 $0.70
Amortization of indefinite-lived
intangible assets, net of tax - 0.07
Adjusted basic earnings per share $0.70 $0.77
Diluted earnings per share as reported $0.69 $0.70
Amortization of indefinite-lived
intangible assets, net of tax - 0.07
Adjusted diluted earnings per share $0.69 $0.77
RECONCILIATION OF RESULTS OF OPERATIONS FROM CURRENT BUSINESSES TO AS
REPORTED RESULTS
THREE MONTHS ENDED
June 30, June 30,
2002 2001
---- ----
Operating income from current businesses $ 459,142 $ 436,931
Special charges and unusual items:
Write-down of receivables due to
interexchange carrier's bankruptcy filing (14,000) -
Litigation settlement - -
Integration expenses and other charges (9,022) (2,097)
Operating income, as reported $ 436,120 $ 434,834
Net income from current businesses $ 246,964 $ 222,650
Special charges and unusual items, net of tax:
Write-down of receivables due to
interexchange carrier's bankruptcy filing (8,694) -
Litigation settlement - -
Integration expenses and other charges (5,408) (1,249)
Net financing costs related to prefunding the
Company's pending acquisitions (8,256) -
Gain (loss) on disposal of assets and other - (2,920)
Write-down of investments (8,438) -
Cumulative effect of accounting change, net of tax - -
Net income, as reported $ 216,168 $ 218,481
Basic earnings per share from current businesses $0.79 $0.71
Special charges and unusual items, net of tax:
Write-down of receivables due to
interexchange carrier's bankruptcy filing (0.03) -
Litigation settlement - -
Integration expenses and other charges - -
Net financing costs related to prefunding the
Company's pending acquisitions (0.03) -
Gain (loss) on disposal of assets and other - (0.01)
Write-down of investments (0.03) -
Cumulative effect of accounting change, net of tax - -
Basic earnings per share, as reported $0.70 $0.70
Diluted earnings per share from current businesses $0.79 $0.71
Special charges and unusual items, net of tax:
Write-down of receivables due to
interexchange carrier's bankruptcy filing (0.03) -
Litigation settlement - -
Integration expenses and other charges (0.01) -
Net financing costs related to prefunding the
Company's pending acquisitions (0.03) -
Gain (loss) on disposal of assets and other - (0.01)
Write-down of investments (0.03) -
Cumulative effect of accounting change, net of tax - -
Diluted earnings per share, as reported $0.69 $0.70
SUPPLEMENTAL OPERATING INFORMATION FROM CURRENT BUSINESSES (A)
THREE MONTHS ENDED
June 30, June 30,
2002 2001
---- ----
Wireless:
Controlled POPs 51,107,009 49,515,962
Customers 6,843,411 6,463,649
Penetration rate 13.4% 13.1%
Average customers 6,804,099 6,381,004
Gross customer additions:
Internal 558,887 545,533
Acquired, net of divested - -
Total 558,887 545,533
Net customer additions:
Internal 80,197 113,267
Acquired, net of divested - -
Total 80,197 113,267
Revenues and sales (in thousands):
Service revenues $ 965,543 $ 910,431
Product sales 37,182 54,752
Total $ 1,002,725 $ 965,183
Average revenue per customer per month $47.30 $47.56
Cost to acquire a new customer $321 $335
Churn 2.19% 2.17%
Operating margin 22.7% 20.9%
Cash flow (EBITDA) margin 36.4% 36.9%
Service revenue (EBITDA) margin 37.8% 39.2%
Capital expenditures (in thousands) $225,577 $287,544
Wireline:
Customers 2,611,861 2,606,604
Operating margin 36.5% 37.8%
Cash flow (EBITDA) margin 58.0% 58.8%
Capital expenditures (in thousands) $99,928 $97,786
Communications support services:
Long-distance customers 1,363,794 1,212,101
Operating margin 8.5% 10.2%
Cash flow (EBITDA) margin 11.7% 12.5%
Capital expenditures (in thousands) $6,729 $7,752
Information services:
Operating margin 16.2% 13.9%
Cash flow (EBITDA) margin 25.0% 22.7%
Capital expenditures (in thousands) $14,254 $16,219
Consolidated:
Operating margin 23.9% 23.0%
Cash flow (EBITDA) margin 38.3% 38.3%
Capital expenditures (in thousands) $347,568 $409,629
Weighted average common shares:
Basic (in thousands) 310,973 311,551
Fully diluted (in thousands) 312,361 313,601
Annual dividend rate per common share $1.36 $1.32
Total assets (in thousands) $15,580,988 $ 12,284,934
(A) Current businesses excludes integration expenses and other
charges, gain (loss) on disposal of assets, write-down of
investments and receivables, and net financing costs related
to the prefunding of the Company's pending acquisitions.
Pursuant to SFAS No. 142 "Goodwill and Other Intangible
Assets", amortization of goodwill and other indefinite-lived
intangible assets ceased as of January 1, 2002.
CONSOLIDATED HIGHLIGHTS
SIX MONTHS ENDED
Increase
June 30, June 30, (Decrease)
FROM CURRENT BUSINESSES (A) 2002 2001 Amount %
---- ---- ------ -
REVENUES AND SALES:
Wireless $ 1,946,854 $ 1,884,346 $ 62,508 3
Wireline 996,258 972,949 23,309 2
Communications support services 391,928 416,407 (24,479) (6)
Information services 495,207 529,633 (34,426) (6)
Total business segments 3,830,247 3,803,335 26,912 1
Less: intercompany eliminations 72,947 77,215 (4,268) (6)
Total revenues and sales $ 3,757,300 $ 3,726,120 $ 31,180 1
EBITDA:
Wireless $ 716,401 $ 696,402 $ 19,999 3
Wireline 581,853 567,330 14,523 3
Communications support services 44,766 54,235 (9,469) (17)
Information services 121,815 118,465 3,350 3
Total business segments 1,464,835 1,436,432 28,403 2
Corporate expenses 9,510 8,563 947 11
Total EBITDA $ 1,455,325 $ 1,427,869 $ 27,456 2
OPERATING INCOME:
Wireless $ 447,620 $ 392,497 $ 55,123 14
Wireline 371,441 362,755 8,686 2
Communications support services 31,341 44,156 (12,815) (29)
Information services 76,614 71,244 5,370 8
Total business segments 927,016 870,652 56,364 6
Corporate expenses 17,091 18,729 (1,638) (9)
Total operating income 909,925 851,923 58,002 7
Equity earnings in
unconsolidated partnerships 22,385 28,447 (6,062) (21)
Minority interest in
consolidated partnerships (31,899) (35,427) (3,528) (10)
Other income, net 10,328 19,631 (9,303) (47)
Interest expense (126,279) (153,341) (27,062) (18)
Income before income taxes 784,460 711,233 73,227 10
Income taxes 297,600 287,107 10,493 4
Net income 486,860 424,126 62,734 15
Preferred dividends 65 75 (10) (13)
Net income applicable to
common shares $ 486,795 $ 424,051 $ 62,744 15
EARNINGS PER SHARE:
Basic $1.57 $1.36 $.21 15
Diluted $1.56 $1.35 $.21 16
CONSOLIDATED STATEMENTS OF INCOME - AS REPORTED
SIX MONTHS ENDED
June 30, June 30,
2002 2001
---- ----
Revenues and sales:
Service revenues $ 3,419,650 $ 3,323,448
Product sales 337,650 402,672
Total revenues and sales 3,757,300 3,726,120
Costs and expenses:
Operations 1,882,786 1,827,010
Costs of products sold 433,189 471,241
Depreciation and amortization 545,400 575,946
Integration expenses and other charges 51,871 71,056
Total costs and expenses 2,913,246 2,945,253
Operating income 844,054 780,867
Equity earnings in unconsolidated partnerships 22,385 28,447
Minority interest in consolidated partnerships (31,899) (35,427)
Other income, net 14,619 19,631
Interest expense (144,092) (153,341)
Gain (loss) on disposal of assets, write-down
of investments and other (13,739) 357,576
Income before income taxes 691,328 997,753
Income taxes 261,354 403,025
Income before cumulative effect of accounting
change 429,974 594,728
Cumulative effect of accounting
change (net of income taxes) - 19,523
Net income 429,974 614,251
Preferred dividends 65 75
Net income applicable to common shares $ 429,909 $ 614,176
Basic earnings per share:
Income before cumulative effect of
accounting change $1.38 $1.90
Cumulative effect of accounting change - 0.06
Net income $1.38 $1.96
Diluted earnings per share:
Income before cumulative effect of
accounting change $1.38 $1.89
Cumulative effect of accounting change - 0.06
Net income $1.38 $1.95
Adjusted amounts assuming change in accounting
for goodwill and other indefinite-lived
intangibles applied retroactively:
Net income as reported $ 429,974 $ 614,251
Amortization of indefinite-lived
intangible assets, net of tax - 42,498
Adjusted net income $ 429,974 $ 656,749
Basic earnings per share as reported $1.38 $1.96
Amortization of indefinite-lived
intangible assets, net of tax - 0.14
Adjusted basic earnings per share $1.38 $2.10
Diluted earnings per share as reported $1.38 $1.95
Amortization of indefinite-lived
intangible assets, net of tax - 0.14
Adjusted diluted earnings per share $1.38 $2.09
RECONCILIATION OF RESULTS OF OPERATIONS FROM CURRENT BUSINESSES TO AS
REPORTED RESULTS
SIX MONTHS ENDED
June 30, June 30,
2002 2001
---- ----
Operating income from current businesses $ 909,925 $ 851,923
Special charges and unusual items:
Write-down of receivables due to
interexchange carrier's bankruptcy filing (14,000) -
Litigation settlement - -
Integration expenses and other charges (51,871) (71,056)
Operating income, as reported $ 844,054 $ 780,867
Net income from current businesses $ 486,860 $ 424,126
Special charges and unusual items, net of tax:
Write-down of receivables due to
interexchange carrier's bankruptcy filing (8,694) -
Litigation settlement - -
Integration expenses and other charges (31,498) (42,145)
Net financing costs related to prefunding the
Company's pending acquisitions (8,256) -
Gain (loss) on disposal of assets and other - 212,747
Write-down of investments (8,438) -
Cumulative effect of accounting change, net of tax - 19,523 - 19,523
Net income, as reported $ 429,974 $ 614,251
Basic earnings per share from current businesses $1.57 $1.36
Special charges and unusual items, net of tax:
Write-down of receivables due to
interexchange carrier's bankruptcy filing (0.03) -
Litigation settlement - -
Integration expenses and other charges (0.10) (0.13)
Net financing costs related to prefunding the
Company's pending acquisitions (0.03) -
Gain (loss) on disposal of assets and other - 0.67
Write-down of investments (0.03) -
Cumulative effect of accounting change, net of tax - 0.06
Basic earnings per share, as reported $1.38 $1.96
Diluted earnings per share from current businesses $1.56 $1.35
Special charges and unusual items, net of tax:
Write-down of receivables due to
interexchange carrier's bankruptcy filing (0.03) -
Litigation settlement - -
Integration expenses and other charges (0.09) (0.13)
Net financing costs related to prefunding the
Company's pending acquisitions (0.03) -
Gain (loss) on disposal of assets and other - 0.67
Write-down of investments (0.03) -
Cumulative effect of accounting change, net of tax - 0.06
Diluted earnings per share, as reported $1.38 $1.95
SUPPLEMENTAL OPERATING INFORMATION FROM CURRENT BUSINESSES (A)
SIX MONTHS ENDED
June 30, June 30,
2002 2001
---- ----
Wireless:
Average customers 6,747,821 6,328,202
Gross customer additions:
Internal 1,127,723 1,126,705
Acquired, net of divested - -
Total 1,127,723 1,126,705
Net customer additions:
Internal 160,447 222,054
Acquired, net of divested - -
Total 160,447 222,054
Revenues and sales (in thousands):
Service revenues $ 1,880,289 $ 1,774,731
Product sales 66,565 109,615
Total $ 1,946,854 $ 1,884,346
Average revenue per customer per month $46.44 $46.74
Cost to acquire a new customer $318 $299
Churn 2.25% 2.30%
Operating margin 23.0% 20.8%
Cash flow (EBITDA) margin 36.8% 37.0%
Service revenue (EBITDA) margin 38.1% 39.2%
Capital expenditures (in thousands) $343,930 $400,402
Wireline:
Operating margin 37.3% 37.3%
Cash flow (EBITDA) margin 58.4% 58.3%
Capital expenditures (in thousands) $167,116 $167,708
Communications support services:
Operating margin 8.0% 10.6%
Cash flow (EBITDA) margin 11.4% 13.0%
Capital expenditures (in thousands) $10,919 $12,164
Information services:
Operating margin 15.5% 13.5%
Cash flow (EBITDA) margin 24.6% 22.4%
Capital expenditures (in thousands) $24,584 $34,811
Consolidated:
Operating margin 24.2% 22.9%
Cash flow (EBITDA) margin 38.7% 38.3%
Capital expenditures (in thousands) $548,595 $616,633
Weighted average common shares:
Basic (in thousands) 310,886 312,334
Fully diluted (in thousands) 312,494 314,504
(A) Current businesses excludes integration expenses and other
charges, gain (loss) on disposal of assets, write-down of
investments and receivables, and net financing costs related
to the prefunding of the Company's pending acquisitions.
Pursuant to SFAS No. 142 "Goodwill and Other Intangible
Assets", amortization of goodwill and other indefinite-lived
intangible assets ceased as of January 1, 2002.
CONSOLIDATED HIGHLIGHTS
TWELVE MONTHS ENDED
Increase
June 30, June 30, (Decrease)
FROM CURRENT BUSINESSES (A) 2002 2001 Amount %
---- ---- ------ -
REVENUES AND SALES:
Wireless $ 3,894,547 $ 3,761,185 $ 133,362 4
Wireline 1,988,179 1,916,739 71,440 4
Communications support services 799,337 888,922 (89,585) (10)
Information services 1,000,812 1,055,438 (54,626) (5)
Total business segments 7,682,875 7,622,284 60,591 1
Less: intercompany eliminations 146,081 172,477 (26,396) (15)
Total revenues and sales $ 7,536,794 $ 7,449,807 $ 86,987 1
EBITDA:
Wireless $ 1,466,650 $ 1,367,182 $ 99,468 7
Wireline 1,159,208 1,096,692 62,516 6
Communications support services 103,675 110,252 (6,577) (6)
Information services 243,859 244,966 (1,107) -
Total business segments 2,973,392 2,819,092 154,300 5
Corporate expenses 21,318 20,151 1,167 6
Total EBITDA $ 2,952,074 $ 2,798,941 $ 153,133 5
OPERATING INCOME:
Wireless $ 882,810 $ 785,935 $ 96,875 12
Wireline 741,328 698,578 42,750 6
Communications support services 77,910 90,782 (12,872) (14)
Information services 151,774 151,749 25 -
Total business segments 1,853,822 1,727,044 126,778 7
Corporate expenses 38,875 38,826 49 -
Total operating income 1,814,947 1,688,218 126,729 8
Equity earnings in
unconsolidated partnerships 50,879 77,196 (26,317) (34)
Minority interest in
consolidated partnerships (68,283) (80,820) (12,537) (16)
Other income, net 23,927 37,399 (13,472) (36)
Interest expense (261,859) (319,174) (57,315) (18)
Income before income taxes 1,559,611 1,402,819 156,792 11
Income taxes 607,273 570,024 37,249 7
Net income 952,338 832,795 119,543 14
Preferred dividends 135 153 (18) (12)
Net income applicable to
common shares $ 952,203 $ 832,642 $ 119,561 14
EARNINGS PER SHARE:
Basic $3.07 $2.66 $.41 15
Diluted $3.05 $2.64 $.41 16
CONSOLIDATED STATEMENTS OF INCOME - AS REPORTED
TWELVE MONTHS ENDED
June 30, June 30,
2002 2001
---- ----
Revenues and sales:
Service revenues $ 6,832,984 $ 6,589,393
Product sales 703,810 848,964
Total revenues and sales 7,536,794 7,438,357
Costs and expenses:
Operations 3,728,862 3,724,536
Costs of products sold 869,858 926,330
Depreciation and amortization 1,137,127 1,110,723
Integration expenses and other charges 73,019 79,574
Total costs and expenses 5,808,866 5,841,163
Operating income 1,727,928 1,597,194
Equity earnings in unconsolidated partnerships 50,879 77,196
Minority interest in consolidated partnerships (68,283) (80,820)
Other income, net 28,218 37,399
Interest expense (279,672) (319,174)
Gain (loss) on disposal of assets, write-down
of investments and other (13,739) 947,996
Income before income taxes 1,445,331 2,259,791
Income taxes 562,571 919,189
Income before cumulative effect of accounting
change 882,760 1,340,602
Cumulative effect of accounting
change (net of income taxes) - 19,523
Net income 882,760 1,360,125
Preferred dividends 135 153
Net income applicable to common shares $ 882,625 $ 1,359,972
Basic earnings per share:
Income before cumulative effect of accounting
change $2.84 $4.28
Cumulative effect of accounting change - 0.06
Net income $2.84 $4.34
Diluted earnings per share:
Income before cumulative effect of accounting
change $2.82 $4.25
Cumulative effect of accounting change - 0.06
Net income $2.82 $4.31
Adjusted amounts assuming change in accounting
for goodwill and other indefinite-lived
intangibles applied retroactively:
Net income as reported $ 882,760 $ 1,360,125
Amortization of indefinite-lived
intangible assets, net of tax 50,550 94,873
Adjusted net income $ 933,310 $ 1,454,998
Basic earnings per share as reported $2.84 $4.34
Amortization of indefinite-lived
intangible assets, net of tax 0.16 0.30
Adjusted basic earnings per share $3.00 $4.64
Diluted earnings per share as reported $2.82 $4.31
Amortization of indefinite-lived
intangible assets, net of tax 0.16 0.30
Adjusted diluted earnings per share $2.98 $4.61
RECONCILIATION OF RESULTS OF OPERATIONS FROM CURRENT BUSINESSES TO AS
REPORTED RESULTS
TWELVE MONTHS ENDED
June 30, June 30,
2002 2001
---- ----
Operating income from current businesses $1,814,947 $1,688,218
Special charges and unusual items:
Write-down of receivables due to
interexchange carrier's bankruptcy filing (14,000) -
Litigation settlement - (11,450)
Integration expenses and other charges (73,019) (79,574)
Operating income, as reported $1,727,928 $1,597,194
Net income from current businesses $ 952,338 $ 832,795
Special charges and unusual items, net of tax:
Write-down of receivables due to
interexchange carrier's bankruptcy filing (8,694) -
Litigation settlement - (6,996)
Integration expenses and other charges (44,190) (47,242)
Net financing costs related to prefunding the
Company's pending acquisitions (8,256) -
Gain (loss) on disposal of assets and other - 562,045
Write-down of investments (8,438) -
Cumulative effect of accounting change, net of tax - 19,523
Net income, as reported $ 882,760 $1,360,125
Basic earnings per share from current businesses $3.07 $2.66
Special charges and unusual items, net of tax:
Write-down of receivables due to
interexchange carrier's bankruptcy filing (0.03) -
Litigation settlement - (0.02)
Integration expenses and other charges (0.14) (0.15)
Net financing costs related to prefunding the
Company's pending acquisitions (0.03) -
Gain (loss) on disposal of assets and other - 1.79
Write-down of investments (0.03) -
Cumulative effect of accounting change, net of tax - 0.06
Basic earnings per share, as reported $2.84 $4.34
Diluted earnings per share from current businesses $3.05 $2.64
Special charges and unusual items, net of tax:
Write-down of receivables due to
interexchange carrier's bankruptcy filing (0.03) -
Litigation settlement - (0.02)
Integration expenses and other charges (0.14) (0.15)
Net financing costs related to prefunding the
Company's pending acquisitions (0.03) -
Gain (loss) on disposal of assets and other - 1.78
Write-down of investments (0.03) -
Cumulative effect of accounting change, net of tax - 0.06
Diluted earnings per share, as reported $2.82 $4.31
SUPPLEMENTAL OPERATING INFORMATION FROM CURRENT BUSINESSES (A)
TWELVE MONTHS ENDED
June 30, June 30,
2002 2001
---- ----
Wireless:
Average customers 6,650,696 6,177,340
Gross customer additions:
Internal 2,298,646 2,309,336
Acquired, net of divested - 148,469
Total 2,298,646 2,457,805
Net customer additions:
Internal 379,762 480,176
Acquired, net of divested - 148,469
Total 379,762 628,645
Revenues and sales (in thousands):
Service revenues $ 3,745,328 $ 3,541,657
Product sales 149,219 219,528
Total $ 3,894,547 $ 3,761,185
Average revenue per customer per month $46.93 $47.78
Cost to acquire a new customer $309 $306
Churn 2.32% 2.35%
Operating margin 22.7% 20.9%
Cash flow (EBITDA) margin 37.7% 36.3%
Service revenue (EBITDA) margin 39.2% 38.6%
Capital expenditures (in thousands) $701,518 $827,928
Wireline:
Operating margin 37.3% 36.4%
Cash flow (EBITDA) margin 58.3% 57.2%
Capital expenditures (in thousands) $353,381 $409,352
Communications support services:
Operating margin 9.7% 10.2%
Cash flow (EBITDA) margin 13.0% 12.4%
Capital expenditures (in thousands) $35,501 $66,636
Information services:
Operating margin 15.2% 14.4%
Cash flow (EBITDA) margin 24.4% 23.2%
Capital expenditures (in thousands) $51,661 $62,393
Consolidated:
Operating margin 24.1% 22.7%
Cash flow (EBITDA) margin 39.2% 37.6%
Capital expenditures (in thousands) $1,163,903 $1,373,822
Weighted average common shares:
Basic (in thousands) 310,655 312,950
Fully diluted (in thousands) 312,495 315,235
(A) Current businesses excludes integration expenses and other
charges, gain (loss) on disposal of assets, write-down of
investments and receivables, and net financing costs related
to the prefunding of the Company's pending acquisitions.
Pursuant to SFAS No. 142 "Goodwill and Other Intangible
Assets", amortization of goodwill and other indefinite-lived
intangible assets ceased as of January 1, 2002.
ALLTEL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
ASSETS
June 30, Dec. 31, June 30,
2002 2001 2001
----------- --------- ----------
CURRENT ASSETS:
Cash and short-term investments $ 2,964,406 $ 85,266 $ 33,698
Accounts receivable (less
allowance for doubtful accounts
of $75,659, $52,150 and $53,446
respectively) 1,238,430 1,241,234 1,252,493
Inventories 123,923 163,745 138,515
Prepaid expenses and other 265,685 277,506 151,653
Total current assets 4,592,444 1,767,751 1,576,359
Investments 244,355 251,595 259,800
Goodwill 2,661,500 2,633,581 2,706,583
Other intangibles 780,385 798,548 729,017
PROPERTY, PLANT AND EQUIPMENT:
Land 242,221 239,835 235,686
Buildings and improvements 1,080,103 1,051,375 1,017,869
Wireline 5,653,085 5,501,258 5,311,653
Wireless 4,331,725 4,160,555 3,898,666
Information services 1,237,780 1,166,828 1,096,060
Other 585,802 577,964 575,963
Under construction 452,004 384,145 508,094
Total property, plant and
equipment 13,582,720 13,081,960 12,643,991
Less accumulated depreciation 6,750,324 6,300,661 5,966,646
Net property, plant and
equipment 6,832,396 6,781,299 6,677,345
Other assets 469,908 376,192 335,830
TOTAL ASSETS $ 15,580,988 $ 12,608,966 $ 12,284,934
============ ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
June 30, Dec. 31, June 30,
2002 2001 2001
------------ ------------ ----------
CURRENT LIABILITIES:
Current maturities of
long-term debt $ 502,210 $ 51,552 $ 55,277
Accounts payable 468,341 522,152 503,310
Advance payments and customer
deposits 222,119 217,994 218,148
Accrued taxes 244,431 141,006 385,676
Accrued dividends 106,486 105,952 103,426
Other current liabilities 230,221 246,485 247,706
Total current liabilities 1,773,808 1,285,141 1,513,543
Long-term debt 6,061,608 3,861,493 4,029,685
Deferred income taxes 800,598 737,947 536,264
Other liabilities 1,231,778 1,158,552 892,348
SHAREHOLDERS' EQUITY:
Preferred stock 413 422 429
Common stock 311,015 310,530 310,239
Additional capital 690,799 769,196 755,230
Unrealized holding gain (loss)
on investments 67 (4,515) 917
Foreign currency translation
adjustment (7,276) (9,927) (8,868)
Retained earnings 4,718,178 4,500,127 4,255,147
Total shareholders' equity 5,713,196 5,565,833 5,313,094
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 15,580,988 $ 12,608,966 $ 12,284,934
============ ============ ============
|
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion