ALLTEL Reports Strong Annual Results for 2002; Announces Sale of Division of Information Services Business.Business Editors/High-Tech Writers LITTLE ROCK, Ark.--(BUSINESS WIRE)--Jan. 29, 2003 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 that the company achieved strong fourth-quarter and 2002 annual results. In the fourth quarter, 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 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). ) was 82 cents, an 11 percent increase from a year ago. Fully diluted earnings per share from current businesses was 84 cents, a 12 percent increase from a year ago. For the year, fully diluted earnings per share under GAAP was $2.96, while fully diluted earnings per share from current businesses was $3.24, a 14 percent increase from 2001. "This was another solid year for ALLTEL as our company continued to produce strong financial results while growing our communications business in what was a very challenging year for the industry," 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. Fourth-quarter highlights from current businesses (compared with the fourth quarter of last year) include: -- Total revenues were $2.1 billion, a 13 percent increase. -- Net income was $262.4 million, a 12 percent increase. -- Wireless revenues were $1.1 billion, a 15 percent increase. -- Wireline revenues were $607.8 million, a 22 percent increase. -- Equity free cash flow was $281 million, a 112 percent increase. Highlights from current businesses for the year (compared with 2001) include: -- Total revenues were nearly $8 billion, a 6 percent increase. -- Net income was $1 billion, a 14 percent increase. -- Wireless revenues were $4.2 billion, a 9 percent increase. -- Wireline revenues were $2.2 billion, an 11 percent increase. -- Equity free cash flow was $996 million, a 21 percent increase. ALLTEL also has agreed to sell the financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. division of its Information Services See Information Systems. subsidiary to Fidelity Fidelity is a notion that at its most abstract level implies a truthful connection to a source or sources. Its original meaning dealt with loyalty and attentiveness to one's duty to a lord or a king, in a broader sense than the related concept of fealty. National Financial Inc. of Irvine Irvine, town, Scotland Irvine (ûr`vĭn), town (1991 pop. 32,507), North Ayrshire, SW Scotland, on the Irvine River estuary. Industries include iron and brass foundries. Other products are chemicals, electric goods, and clothing. , Calif., for $1.05 billion, payable as $775 million cash and $275 million in Fidelity National common stock. The telecom division of ALLTEL Information Services will be retained by ALLTEL and will not be part of the transaction. Fidelity National is acquiring ALLTEL's mortgage servicing Mortgage servicing The collection of monthly payments and penalties, record keeping, payment of insurance and taxes, and possible settlement of default , involved with a mortgage loan. operations; the retail banking operations; the commercial lending/wholesale banking business; and the community/regional bank division. About 5,500 employees will transition to Fidelity National as part of the transaction. Assuming the Information Services transaction closes on March 31, the sale will dilute di·lute v. To reduce a solution or mixture in concentration, quality, strength, or purity, as by adding water. adj. Thinned or weakened by diluting. 2003 earnings by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 22 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. . First-quarter 2003 results will show the financial services division of the Information Services business as a discontinued operation discontinued operation A segment of a business that has been abandoned or sold or for which plans for one or another of these actions have been approved. See also continuing operations. . "The decision to sell the financial services division of ALLTEL Information Services improves ALLTEL's financial flexibility and allows our company to focus on expanding the communications business," Ford said. "We also believe Fidelity National will provide opportunities for both our Information Services customers and employees, and we look forward to our continued relationship with Fidelity National as one of their sizeable shareholders." 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; the potential for 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; the uncertainties related to ALLTEL's strategic investments; the effects of litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. ; 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; 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; and the final outcome of pending litigation challenging the Federal Communications Commission's wireless number portability See NP. rules. In addition to these factors, actual future performance, outcomes and results may differ materially because of more general factors including (without limitation) general industry and market conditions and growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. , economic conditions, and governmental and public policy changes. ALLTEL, with more than 12 million communications customers and nearly $8 billion in revenues, is a leader in the communications and information services industries. ALLTEL has communications customers in 26 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
Dec. 31, Dec. 31, (Decrease)
FROM CURRENT BUSINESSES (A) 2002 2001 Amount %
---- ---- ------ -
REVENUES AND SALES:
Wireless $ 1,119,382 $ 974,203 $ 145,179 15
Wireline 607,815 499,387 108,428 22
Communications support services 205,632 215,618 (9,986) (5)
Information services 250,195 253,897 (3,702) (1)
Total business segments 2,183,024 1,943,105 239,919 12
Less: intercompany
eliminations 39,340 39,028 312 1
Total revenues and sales $ 2,143,684 $ 1,904,077 $ 239,607 13
EBITDA:
Wireless $ 405,978 $ 379,169 $ 26,809 7
Wireline 355,534 288,951 66,583 23
Communications support services 23,431 30,157 (6,726) (22)
Information services 71,277 62,204 9,073 15
Total business segments 856,220 760,481 95,739 13
Corporate expenses 6,349 6,291 58 1
Total EBITDA $ 849,871 $ 754,190 $ 95,681 13
OPERATING INCOME:
Wireless $ 246,495 $ 221,227 $ 25,268 11
Wireline 223,736 181,903 41,833 23
Communications support services 16,471 23,654 (7,183) (30)
Information services 46,019 38,756 7,263 19
Total business segments 532,721 465,540 67,181 14
Corporate expenses 9,727 11,384 (1,657) (15)
Total operating income 522,994 454,156 68,838 15
Equity earnings in
unconsolidated partnerships 23,260 12,275 10,985 89
Minority interest in
consolidated partnerships (17,888) (17,435) 453 3
Other income, net (3,561) 2,760 (6,321) (229)
Interest expense (107,121) (61,403) 45,718 74
Income before income taxes 417,684 390,353 27,331 7
Income taxes 155,255 155,582 (327) -
Net income 262,429 234,771 27,658 12
Preferred dividends 29 34 (5) (15)
Net income applicable to
common shares $ 262,400 $ 234,737 $ 27,663 12
EARNINGS PER SHARE:
Basic $.84 $.76 $.08 11
Diluted $.84 $.75 $.09 12
CONSOLIDATED STATEMENTS OF INCOME - AS REPORTED
THREE MONTHS ENDED
------------------
Dec. 31, Dec. 31,
2002 2001
---- ----
Revenues and sales:
Service revenues $ 1,942,889 $ 1,714,181
Product sales 200,795 189,896
Total revenues and sales 2,143,684 1,904,077
Costs and expenses:
Cost of services 642,107 576,435
Cost of products sold 233,903 213,159
Selling, general and administrative and other 417,803 360,293
Depreciation and amortization 326,877 300,034
Integration expenses and other charges 41,298 5,681
Total costs and expenses 1,661,988 1,455,602
Operating income 481,696 448,475
Equity earnings in unconsolidated partnerships 23,260 12,275
Minority interest in consolidated partnerships (17,888) (17,435)
Other income, net (3,561) 2,760
Interest expense (107,121) (61,403)
Gain on disposal of assets, write-down
of investments and other 19,516 -
Income before income taxes 395,902 384,672
Income taxes 139,329 153,314
Income before cumulative effect of accounting
change 256,573 231,358
Cumulative effect of accounting
change (net of income taxes) - -
Net income 256,573 231,358
Preferred dividends 29 34
Net income applicable to common shares $ 256,544 $ 231,324
Basic earnings per share:
Income before cumulative effect of accounting
change $0.82 $0.75
Cumulative effect of accounting change - -
Net income $0.82 $0.75
Diluted earnings per share:
Income before cumulative effect of accounting
change $0.82 $0.74
Cumulative effect of accounting change - -
Net income $0.82 $0.74
Adjusted amounts assuming change in accounting
for goodwill and other indefinite-lived
intangibles applied retroactively:
Net income as reported $ 256,573 $ 231,358
Amortization of indefinite-lived
intangible assets, net of tax - 25,670
Adjusted net income $ 256,573 $ 257,028
Basic earnings per share as reported $0.82 $0.75
Amortization of indefinite-lived
intangible assets, net of tax - 0.08
Adjusted basic earnings per share $0.82 $0.83
Diluted earnings per share as reported $0.82 $0.74
Amortization of indefinite-lived
intangible assets, net of tax - 0.08
Adjusted diluted earnings per share $0.82 $0.82
RECONCILIATION OF RESULTS OF OPERATIONS FROM CURRENT BUSINESSES TO AS
REPORTED RESULTS
THREE MONTHS ENDED
------------------
Dec. 31, Dec. 31,
2002 2001
---- ----
Operating income from current businesses $ 522,994 $ 454,156
Special charges and unusual items:
Write-down of receivables due to
interexchange carrier's bankruptcy filing - -
Integration expenses and other charges (41,298) (5,681)
Operating income, as reported $ 481,696 $ 448,475
Net income from current businesses $ 262,429 $ 234,771
Special charges and unusual items, net of tax:
Write-down of receivables due to
interexchange carrier's bankruptcy filing - -
Integration expenses and other charges (17,781) (3,413)
Net financing costs related to prefunding the
Company's wireless and wireline acquisitions - -
Gain on disposal of assets and other 13,526 -
Write-down of investments (1,601) -
Cumulative effect of accounting change, net of
tax - -
Net income, as reported $ 256,573 $ 231,358
Basic earnings per share from current businesses $0.84 $0.76
Special charges and unusual items, net of tax:
Write-down of receivables due to
interexchange carrier's bankruptcy filing - -
Integration expenses and other charges (0.06) (0.01)
Net financing costs related to prefunding the
Company's wireless and wireline acquisitions - -
Gain on disposal of assets and other 0.04 -
Write-down of investments - -
Cumulative effect of accounting change, net of tax - -
Basic earnings per share, as reported $0.82 $0.75
Diluted earnings per share from current businesses $0.84 $0.75
Special charges and unusual items, net of tax:
Write-down of receivables due to
interexchange carrier's bankruptcy filing - -
Integration expenses and other charges (0.06) (0.01)
Net financing costs related to prefunding the
Company's wireless and wireline acquisitions - -
Gain on disposal of assets and other 0.04 -
Write-down of investments - -
Cumulative effect of accounting change, net of tax - -
Diluted earnings per share, as reported $0.82 $0.74
SUPPLEMENTAL OPERATING INFORMATION FROM CURRENT BUSINESSES (A)
THREE MONTHS ENDED
------------------
Increase
Dec. 31, Dec. 31, (Decrease)
2002 2001 Amount %
---- ---- ------ -
Wireless:
Controlled POPs 59,008,262 49,515,962 9,492,300 19
Customers 7,601,598 6,682,964 918,634 14
Penetration rate 12.9% 13.5% (0.6%) (4)
Average customers 7,561,283 6,605,938 955,345 14
Gross customer additions:
Internal 675,230 569,972 105,258 18
Acquired, net of divested (8,939) - (8,939) -
Total 666,291 569,972 96,319 17
Net customer additions:
Internal 51,608 95,042 (43,434) (46)
Acquired, net of divested (8,939) - (8,939) -
Prepaid customer unit
adjustment - - - -
Total 42,669 95,042 (52,373) (55)
Revenues and sales (in thousands):
Service revenues $ 1,065,747 $ 938,896 $ 126,851 14
Product sales 53,635 35,307 18,328 52
Total $ 1,119,382 $ 974,203 $ 145,179 15
Average revenue per
customer per month $46.98 $47.38 ($0.40) (1)
Cost to acquire a new
customer $274 $305 ($31) (10)
Postpay churn 2.25% 2.35% (0.10%) (4)
Total churn 2.76% 2.41% 0.35% 15
Operating margin 22.0% 22.7% (0.7%) (3)
Cash flow (EBITDA) margin 36.3% 38.9% (2.6%) (7)
Service revenue (EBITDA)
margin 38.1% 40.4% (2.3%) (6)
Capital expenditures
(in thousands) $171,591 $261,766 ($90,175) (34)
Wireline:
Customers 3,167,275 2,612,325 554,950 21
DSL customers 70,182 26,816 43,366 162
Operating margin 36.8% 36.4% 0.4% 1
Cash flow (EBITDA) margin 58.5% 57.9% 0.6% 1
Capital expenditures
(in thousands) $117,440 $108,914 $8,526 8
Communications support services:
Long-distance customers 1,542,210 1,265,710 276,500 22
Operating margin 8.0% 11.0% (3.0%) (27)
Cash flow (EBITDA) margin 11.4% 14.0% (2.6%) (19)
Capital expenditures
(in thousands) $9,798 $18,965 ($9,167) (48)
Information services:
Operating margin 18.4% 15.3% 3.1% 20
Cash flow (EBITDA) margin 28.5% 24.5% 4.0% 16
Capital expenditures
(in thousands) $7,016 $9,870 ($2,854) (29)
Consolidated:
Operating margin 24.4% 23.9% 0.5% 2
Cash flow (EBITDA) margin 39.6% 39.6% - -
Capital expenditures
(in thousands) $308,022 $402,095 ($94,073) (23)
Weighted average common shares:
Basic (in thousands) 311,133 310,498 635 -
Fully diluted (in thousands) 312,244 312,601 (357) -
Annual dividend rate
per common share $1.40 $1.36 $0.04 3
Total assets
(in thousands) $16,389,140 $12,608,966 $3,780,174 30
(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 wireless and wireline 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
Dec. 31, Dec. 31, (Decrease)
FROM CURRENT BUSINESSES (A) 2002 2001 Amount %
---- ---- ------ -
REVENUES AND SALES:
Wireless $ 4,160,204 $ 3,832,039 $ 328,165 9
Wireline 2,179,761 1,964,870 214,891 11
Communications support services 806,593 823,816 (17,223) (2)
Information services 990,132 1,035,238 (45,106) (4)
Total business segments 8,136,690 7,655,963 480,727 6
Less: intercompany eliminations 153,253 150,349 2,904 2
Total revenues and sales $ 7,983,437 $ 7,505,614 $ 477,823 6
EBITDA:
Wireless $ 1,528,603 $ 1,446,651 $ 81,952 6
Wireline 1,269,538 1,144,685 124,853 11
Communications support services 90,527 113,144 (22,617) (20)
Information services 255,680 240,509 15,171 6
Total business segments 3,144,348 2,944,989 199,359 7
Corporate expenses 20,985 20,371 614 3
Total EBITDA $ 3,123,363 $ 2,924,618 $ 198,745 7
OPERATING INCOME:
Wireless $ 950,951 $ 827,687 $ 123,264 15
Wireline 803,939 732,642 71,297 10
Communications support services 63,348 90,725 (27,377) (30)
Information services 161,964 146,404 15,560 11
Total business segments 1,980,202 1,797,458 182,744 10
Corporate expenses 35,453 40,513 (5,060) (12)
Total operating income 1,944,749 1,756,945 187,804 11
Equity earnings in
unconsolidated partnerships 65,776 56,941 8,835 16
Minority interest in
consolidated partnerships (69,956) (71,811) (1,855) (3)
Other income, net (5,743) 12,837 (18,580) (145)
Interest expense (314,470) (268,528) 45,942 17
Income before income taxes 1,620,356 1,486,384 133,972 9
Income taxes 609,049 596,780 12,269 2
Net income 1,011,307 889,604 121,703 14
Preferred dividends 125 145 (20) (14)
Net income applicable to
common shares $ 1,011,182 $ 889,459 $ 121,723 14
EARNINGS PER SHARE:
Basic $3.25 $2.86 $.39 14
Diluted $3.24 $2.84 $.40 14
CONSOLIDATED STATEMENTS OF INCOME - AS REPORTED
TWELVE MONTHS ENDED
-------------------
Dec. 31, Dec. 31,
2002 2001
---- ----
Revenues and sales:
Service revenues $ 7,257,294 $ 6,736,782
Product sales 726,143 768,832
Total revenues and sales 7,983,437 7,505,614
Costs and expenses:
Cost of services 2,471,512 2,269,096
Cost of products sold 891,356 907,910
Selling, general and administrative and other 1,511,206 1,403,990
Depreciation and amortization 1,178,614 1,167,673
Integration expenses and other charges 115,095 92,204
Total costs and expenses 6,167,783 5,840,873
Operating income 1,815,654 1,664,741
Equity earnings in unconsolidated partnerships 65,776 56,941
Minority interest in consolidated partnerships (69,956) (71,811)
Other income, net 2,458 12,837
Interest expense (349,429) (268,528)
Gain on disposal of assets, write-down
of investments and other 985 357,576
Income before income taxes 1,465,488 1,751,756
Income taxes 541,178 704,242
Income before cumulative effect of accounting
change 924,310 1,047,514
Cumulative effect of accounting
change (net of income taxes) - 19,523
Net income 924,310 1,067,037
Preferred dividends 125 145
Net income applicable to common shares $ 924,185 $ 1,066,892
Basic earnings per share:
Income before cumulative effect of accounting
change $2.97 $3.36
Cumulative effect of accounting change - 0.06
Net income $2.97 $3.42
Diluted earnings per share:
Income before cumulative effect of accounting
change $2.96 $3.34
Cumulative effect of accounting change - 0.06
Net income $2.96 $3.40
Adjusted amounts assuming change in accounting
for goodwill and other indefinite-lived
intangibles applied retroactively:
Net income as reported $ 924,310 $ 1,067,037
Amortization of indefinite-lived
intangible assets, net of tax - 93,048
Adjusted net income $ 924,310 $ 1,160,085
Basic earnings per share as reported $2.97 $3.42
Amortization of indefinite-lived
intangible assets, net of tax - 0.30
Adjusted basic earnings per share $2.97 $3.72
Diluted earnings per share as reported $2.96 $3.40
Amortization of indefinite-lived
intangible assets, net of tax - 0.30
Adjusted diluted earnings per share $2.96 $3.70
RECONCILIATION OF RESULTS OF OPERATIONS FROM CURRENT BUSINESSES TO AS
REPORTED RESULTS
TWELVE MONTHS ENDED
-------------------
Dec. 31, Dec. 31,
2002 2001
---- ----
Operating income from current businesses $ 1,944,749 $ 1,756,945
Special charges and unusual items:
Write-down of receivables due to
interexchange carrier's bankruptcy filing (14,000) -
Integration expenses and other charges (115,095) (92,204)
Operating income, as reported $ 1,815,654 $ 1,664,741
Net income from current businesses $ 1,011,307 $ 889,604
Special charges and unusual items, net of tax:
Write-down of receivables due to
interexchange carrier's bankruptcy filing (8,694) -
Integration expenses and other charges (62,526) (54,837)
Net financing costs related to prefunding the
Company's wireless and wireline acquisitions (16,337) -
Gain on disposal of assets and other 10,599 212,747
Write-down of investments (10,039) -
Cumulative effect of accounting change, net of
tax - 19,523
Net income, as reported $ 924,310 $ 1,067,037
Basic earnings per share from current businesses $3.25 $2.86
Special charges and unusual items, net of tax:
Write-down of receivables due to
interexchange carrier's bankruptcy filing (0.03) -
Integration expenses and other charges (0.20) (0.18)
Net financing costs related to prefunding the
Company's wireless and wireline acquisitions (0.05) -
Gain on disposal of assets and other 0.03 0.68
Write-down of investments (0.03) -
Cumulative effect of accounting change, net of tax - 0.06
Basic earnings per share, as reported $2.97 $3.42
Diluted earnings per share from current businesses $3.24 $2.84
Special charges and unusual items, net of tax:
Write-down of receivables due to
interexchange carrier's bankruptcy filing (0.03) -
Integration expenses and other charges (0.20) (0.17)
Net financing costs related to prefunding the
Company's wireless and wireline acquisitions (0.05) -
Gain on disposal of assets and other 0.03 0.67
Write-down of investments (0.03) -
Cumulative effect of accounting change, net of tax - 0.06
Diluted earnings per share, as reported $2.96 $3.40
SUPPLEMENTAL OPERATING INFORMATION FROM CURRENT BUSINESSES (A)
TWELVE MONTHS ENDED
-------------------
Increase
Dec. 31, Dec. 31, (Decrease)
2002 2001 Amount %
---- ---- ------ -
Wireless:
Average customers 7,095,544 6,441,617 653,927 10
Gross customer additions:
Internal 2,404,180 2,297,628 106,552 5
Acquired, net of divested 752,784 - 752,784 -
Total 3,156,964 2,297,628 859,336 37
Net customer additions:
Internal 279,703 441,369 (161,666) (37)
Acquired, net of divested 752,784 - 752,784 -
Prepaid customer unit
adjustment (113,853) - (113,853) -
Total 918,634 441,369 477,265 108
Revenues and sales (in thousands):
Service revenues $ 3,999,206 $ 3,639,770 $ 359,436 10
Product sales 160,998 192,269 (31,271) (16)
Total $ 4,160,204 $ 3,832,039 $ 328,165 9
Average revenue per
customer per month $46.97 $47.09 ($0.12) -
Cost to acquire a new
customer $304 $302 $2 1
Postpay churn 2.23% 2.34% (0.11%) (5)
Total churn 2.50% 2.41% 0.09% 4
Operating margin 22.9% 21.6% 1.3% 6
Cash flow (EBITDA) margin 36.7% 37.8% (1.1%) (3)
Service revenue (EBITDA)
margin 38.2% 39.7% (1.5%) (4)
Capital expenditures
(in thousands) $717,075 $721,393 ($4,318) (1)
Wireline:
Operating margin 36.9% 37.3% (0.4%) (1)
Cash flow (EBITDA) margin 58.2% 58.3% (0.1%) -
Capital expenditures
(in thousands) $399,638 $390,289 $9,349 2
Communications support
services:
Operating margin 7.9% 11.0% (3.1%) (29)
Cash flow (EBITDA) margin 11.2% 13.7% (2.5%) (18)
Capital expenditures
(in thousands) $31,537 $37,028 ($5,491) (15)
Information services:
Operating margin 16.4% 14.1% 2.3% 16
Cash flow (EBITDA) margin 25.8% 23.2% 2.6% 11
Capital expenditures
(in thousands) $40,644 $61,888 ($21,244) (34)
Consolidated:
Operating margin 24.4% 23.4% 1.0% 4
Cash flow (EBITDA) margin 39.1% 39.0% 0.1% -
Capital expenditures
(in thousands) $1,194,045 $1,231,941 ($37,896) (3)
Weighted average common
shares:
Basic (in thousands) 310,982 311,380 (398) -
Fully diluted (in thousands) 312,328 313,530 (1,202) -
(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 wireless and wireline 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
Dec. 31, Dec. 31,
2002 2001
---- ----
CURRENT ASSETS:
Cash and short-term investments $ 155,460 $ 85,266
Accounts receivable (less
allowance for doubtful accounts
of $71,901 and $52,150
respectively) 1,290,393 1,241,234
Inventories 139,892 163,745
Prepaid expenses and other 60,247 277,506
Total current assets 1,645,992 1,767,751
Investments 327,424 251,595
Goodwill 4,752,564 2,633,581
Other intangibles 1,389,454 798,548
PROPERTY, PLANT AND EQUIPMENT:
Land 289,077 239,835
Buildings and improvements 1,194,020 1,051,375
Wireline 6,188,507 5,501,258
Wireless 4,798,304 4,160,555
Information services 1,311,695 1,166,828
Other 620,502 577,964
Under construction 365,953 384,145
Total property, plant and
equipment 14,768,058 13,081,960
Less accumulated depreciation 7,059,406 6,300,661
Net property, plant and
equipment 7,708,652 6,781,299
Other assets 565,054 376,192
TOTAL ASSETS $ 16,389,140 $ 12,608,966
LIABILITIES AND SHAREHOLDERS' EQUITY
Dec. 31, Dec. 31,
2002 2001
---- ----
CURRENT LIABILITIES:
Current maturities of
long-term debt $ 495,322 $ 51,552
Accounts payable 587,820 522,152
Advance payments and customer
deposits 261,479 217,994
Accrued taxes 46,811 141,006
Accrued dividends 109,564 105,952
Accrued interest 123,806 66,441
Other current liabilities 194,446 180,044
Total current liabilities 1,819,248 1,285,141
Long-term debt 6,145,501 3,861,493
Deferred income taxes 1,158,453 737,947
Other liabilities 1,267,834 1,158,552
SHAREHOLDERS' EQUITY:
Preferred stock 391 422
Common stock 311,183 310,530
Additional capital 695,656 769,196
Unrealized holding (loss)
on investments (1) (4,515)
Foreign currency translation
adjustment (6,868) (9,927)
Retained earnings 4,997,743 4,500,127
Total shareholders' equity 5,998,104 5,565,833
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 16,389,140 $ 12,608,966
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