AirTouch first quarter earnings per share rise 30 percent, exceeding analysts' estimates; company achieves record first quarter growth and profitability.SAN FRANCISCO--(BUSINESS WIRE)--April 28, 1997--AirTouch Communications (NYSE NYSE See: New York Stock Exchange :ATI (ATI Technologies Inc., Markham Ontario, http://ati.amd.com) A leading manufacturer of graphics chips and display adapters. Founded in 1985 by K. Y. Ho, Benny Lau and Lee Lau, ATI chips and boards are widely used by OEMs. ) today reported first quarter earnings per share rose to 13 cents, 30 percent higher than the 10 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. reported in the same period last year, propelled by ongoing customer retention and cost management programs. Net income available to common stockholders reached $64 million, up 23 percent over the first quarter of 1996. For the quarter ended March 31, 1997, the company added 415,000 cellular, PCS (1) (Personal Communications Services) Refers to wireless services that emerged after the U.S. government auctioned commercial licenses in 1994 and 1995. This radio spectrum in the 1. , and paging customers, reaching nearly 8.5 million proportionate pro·por·tion·ate adj. Being in due proportion; proportional. tr.v. pro·por·tion·at·ed, pro·por·tion·at·ing, pro·por·tion·ates To make proportionate. worldwide customers. "Excellent results like these don't don't 1. Contraction of do not. 2. Nonstandard Contraction of does not. n. A statement of what should not be done: a list of the dos and don'ts. just happen," said Sam (1) (Security Accounts Manager) The part of Windows NT that manages the database of usernames, passwords and permissions. A SAM resides in each server as well as in each domain controller. See PDC and trust relationship. Ginn, chairman and chief executive officer of AirTouch AirTouch Communications was a U.S.-based wireless service provider that was created when PacTel Cellular was spun off from Pacific Telesis on April 1, 1994, forming both AirTouch Cellular and AirTouch Paging. Communications. "We've we've Contraction of we have. we've have spent over a decade building the global scale and expertise that enable us to compete successfully. "The story this quarter is robust growth and profitability," he continued. "As our international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. reach profitability and become an increasingly important part of our business, we're we're Contraction of we are. we're we are producing our best margins ever companywide, while adding new customers at a rapid pace." Driven by a growing customer base, proportionate operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. for first quarter rose 33 percent to $1.1 billion and proportionate operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. (operating income Operating Income 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) increased 73 percent over the prior year to $413 million. Proportionate operating cash flow margins rose from 29 percent to 37 percent. Because AirTouch participates in a large and growing number of joint ventures, the company uses proportionate accounting to present its share of operating revenues and expenses for all its operations. AirTouch posted consolidated operating revenues of $836 million for the quarter, an 86 percent increase over the same period in 1996. Proportionate U.S. Cellular U.S. Cellular (NYSE: USM) is a super-regional cellular telephone provider, serving 5.8 million customers in 189 markets in 26 U.S. states. The company was created in 1983 as a subsidiary of Telephone and Data Systems, Inc. Since April 2000, John E. and PCS AirTouch's focus on growth and cost control continued to pay off this quarter, as the company set first quarter records for new customers and operating cash flow margins. Innovative promotions and competitive wireless products, including Powerband digital service, netted 147,000 new proportionate U.S. cellular customers, reaching 3,550,000 proportionate customers, up 48 percent from first quarter 1996. Cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. efforts, record low customer churn churn: see butter. , and the advantages of scale contributed to a significant decline in cash costs per cellular subscriber compared to the same period last year. Proportionate cellular operating cash flow margins climbed to 48 percent -- the best reported in the industry. AirTouch's plan to acquire U S WEST Media Group's domestic cellular business and their interest in PrimeCo PrimeCo Communications was a joint venture of Bell Atlantic and AirTouch Communications, and was the first wireless telecommunications provider to turn up CDMA service on the PCS (1900-MHz) band in late 1995. Hailed as the largest wireless phone service launch in U.S. , announced April 17, would make AirTouch the second largest U.S. wireless company, based on customers and revenues. PrimeCo, AirTouch's PCS partnership, added 77,000 subscribers during the quarter, reaching a total of 114,000 subscribers. AirTouch's share is 27,000. Proportionate International Cellular As AirTouch's cellular ventures in 11 countries outside the U.S. move from the start-up Start-up The earliest stage of a new business venture. phase to profitability, they are making a larger contribution to the company's overall success. AirTouch added 176,000 proportionate international cellular customers during the quarter, reaching 1,910,000 proportionate customers, up 100 percent over March 31, 1996. Greater scale boosted operating cash flow to $149 million, soaring soaring: see flight; glider. soaring or gliding Sport of flying a glider or sailplane. The craft is towed behind a powered airplane to an altitude of about 2,000 ft (600 m) and then released. 198 percent over the first quarter of 1996. International proportionate operating revenues rose 42 percent to $470 million, and now account for 42 percent of AirTouch's total proportionate operating revenues. Penetration rates in AirTouch's international cellular markets average 10 percent, compared to over 17 percent in the U.S., indicating significant growth potential. With multiple worldwide cellular ventures, AirTouch is less subject to the risk of changing market conditions in a single country or region. U.S. Paging AirTouch's U.S. paging operations added 73,000 units in service, for a total of 2,923,000. First quarter operating cash flow increased 14 percent to $25 million from the same period in 1996. AirTouch is one of the only large paging companies that is profitable. 1997 Outlook "Based on our first quarter results, we're on target to achieve our 1997 goals," said Ginn. "At the beginning of the year we said we expect to add a record number of worldwide customers in 1997 and reach $1.5 billion in proportionate operating cash flow. We also expect our international cellular operations as a whole to be profitable. We're pleased with the progress we've made so far." AirTouch Communications is a global wireless communications wireless communications System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. company, with interests in cellular, paging, and personal communications services See PCS. in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , Belgium Belgium (bĕl`jəm), Du. België, Fr. La Belgique, officially Kingdom of Belgium, constitutional kingdom (2005 est. pop. 10,364,000), 11,781 sq mi (30,513 sq km), NW Europe. , Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). , India India, officially Republic of India, republic (2005 est pop. 1,080,264,000), 1,261,810 sq mi (3,268,090 sq km), S Asia. The second most populous country in the world, it is also sometimes called Bharat, its ancient name. India's land frontier (c. , Italy Italy (ĭt`əlē), Ital. Italia, officially Italian Republic, republic (2005 est. pop. 58,103,000), 116,303 sq mi (301,225 sq km), S Europe. , Japan, Poland Poland, Pol. Polska, officially Republic of Poland, republic (2005 est. pop. 38,635,000), 120,725 sq mi (312,677 sq km), central Europe. It borders on Germany in the west, on the Baltic Sea and the Kaliningrad region of Russia in the north, on Lithuania, , Portugal Portugal (pôr`chəgəl), officially Portuguese Republic, republic (2005 est. pop. 10,566,000), 35,553 sq mi (92,082 sq km), SW Europe, on the western side of the Iberian Peninsula and including the Madeira Islands and the Azores in the , Romania Romania (rōmān`ēə, –yə) or Rumania (r  –), republic (v), 91,699 sq mi (237,500 sq km), SE Europe. , South Korea, Spain, and Sweden, as well as an
interest in the Globalstar satellite system. With more than 500 million
shares outstanding and over one million investors, AirTouch is the
largest company in the world focused on wireless communications. The
company, based in San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden , serves nearly 8.5 million proportionate
customers worldwide."Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement under 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: Except for the historical information presented, the matters discussed in this release are 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. and are subject to risks and uncertainties that could cause actual results to differ materially. Such factors include: a change in economic conditions in the various markets served by the Company's operations which would adversely affect the level of demand for wireless services; greater-than-anticipated competitive activity requiring new pricing and/or product offerings or resulting in higher acquisition costs; greater-than-expected customer growth driving increased investment in network capacity; level of fraudulent The description of a willful act commenced with the Specific Intent to deceive or cheat, in order to cause some financial detriment to another and to engender personal financial gain. activity; impact of new business opportunities requiring significant up-front investments; the timing and manner of implementation of the subsequent phases of the Company's relationship with U S WEST; impact on capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. from the deployment of new technologies; and that technologies will not perform according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. expectations. These and other factors related to the business are described in the Company's 10-K under "Investment Considerations." -0- For a fax copy of this or other AirTouch press releases, please call 1-800-344-7531 or visit the AirTouch web site at www.airtouch.com . -0-
Consolidated Statements of Income (Unaudited)
AirTouch Communications, Inc. and Subsidiaries
(Dollars in millions, except 1ST QTR 1ST QTR
per share information) 1997 1996 CHANGE
OPERATING REVENUES
Wireless services & other revenues $787 $420 87.4 %
Cellular and paging equipment sales 49 29 69.0 %
TOTAL OPERATING REVENUES 836 449 86.2 %
OPERATING EXPENSES
Cost of revenues 104 57 82.5 %
Cost of cellular and paging
equipment sales 73 46 58.7 %
Selling and customer
operations expenses 208 139 49.6 %
General, administrative, and
other expenses 107 93 15.1 %
Depreciation and amortization
expenses 136 65 109.2 %
TOTAL OPERATING EXPENSES 628 400 57.0 %
OPERATING INCOME (LOSS) 208 49 324.5 %
Equity in net income (loss) of
unconsolidated wireless systems:
U.S. (2) 56 (103.6)%
International 10 (7) 242.9 %
Minority interests in net (income) loss
of consolidated wireless systems (39) (9) (333.3)%
Interest:
Expense (26) (8) (225.0)%
Income 5 4 25.0 %
Foreign exchange gain (loss) 4 2 100.0 %
Miscellaneous income (expense) (1) 6 (116.7)%
Income before income taxes and
preferred dividends 159 93 71.0 %
Income taxes 82 41 100.0 %
Income before preferred dividends $77 $52 48.1 %
Less preferred dividends 13 0
NET INCOME AVAILABLE TO
COMMON STOCKHOLDERS $64 $52 23.1 %
EARNINGS PER SHARE $0.13 $0.10 30.0 %
Weighted average shares
outstanding (in thousands) 502,811 498,837 0.8 %
Consolidated Balance Sheets (Unaudited)
AirTouch Communications, Inc. and Subsidiaries
(Dollars in millions) 3/31/97 12/31/96 CHANGE
ASSETS
Cash and cash equivalents $63 $28 125.0 %
Accounts receivable, net 419 416 0.7 %
Inventory 63 55 14.5 %
Other receivables 22 33 (33.3)%
Due from affiliates 25 34 (26.5)%
Other current assets 70 58 20.7 %
TOTAL CURRENT ASSETS 662 624 6.1 %
Property, plant, and equipment, net 2,275 2,322 (2.0)%
Investments in unconsolidated
wireless systems 1,888 1,992 (5.2)%
Intangible assets, net 3,358 3,409 (1.5)%
Deferred charges and other
noncurrent assets 303 177 71.2 %
TOTAL ASSETS $8,486 $8,524 (0.4)%
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable $162 $200 (19.0)%
Short-term borrowings 32 53 (39.6)%
Current portion of long-term debt 15 16 (6.3)%
Other current liabilities 497 491 1.2 %
TOTAL CURRENT LIABILITIES 706 760 (7.1)%
Long-term debt 1,607 1,637 (1.8)%
Deferred income taxes 687 693 (0.9)%
Deferred credits 85 104 (18.3)%
TOTAL LIABILITIES 3,085 3,194 (3.4)%
COMMITMENTS AND CONTINGENCIES 0 0 0.0 %
MINORITY INTERESTS IN CONSOLIDATED
WIRELESS SYSTEMS 287 268 7.1 %
Preferred stock and additional
paid-in-capital 1,041 1,041 0.0 %
Common stock and additional
paid-in-capital 4,010 3,987 0.6 %
Retained earnings (accumulated deficit) 85 21 304.8 %
Cumulative translation adjustment (34) 3
Other 12 10 20.0 %
TOTAL STOCKHOLDERS' EQUITY 5,114 5,062 1.0 %
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $8,486 $8,524 (0.4)%
See footnotes.
Proportionate Operating Data (Unaudited) (1)
AirTouch Communications, Inc. and Subsidiaries
TOTAL COMPANY
(Dollars in millions & 1ST QTR 1ST QTR
operating data in thousands) 1997 1996 CHANGE
Service and other revenues $1,113 $838 32.8 %
Operating income $225 $107 110.3 %
Operating cash flow (2) $413 $239 72.8 %
Operating cash flow margin (3) 37.1% 28.5% 30.2 %
Cellular and PCS POPs (4)(5) 178,367 165,002 8.1 %
Cellular and PCS subscribers (4) 5,487 3,347 63.9 %
Cellular and PCS subscribers net adds
in period,excluding acquisitions 341 288 18.4 %
Paging units in service 2,960 2,614 13.2 %
U.S. CELLULAR OPERATIONS 1ST QTR 1ST QTR
OPERATING DATA (In thousands) 1997 1996 CHANGE
Cellular POPs (5) 43,364 37,798 14.7 %
Cellular subscribers 3,550 2,392 48.4 %
Cellular subscriber net adds in qtr,
excluding acquisitions 147 130 13.1 %
INTERNATIONAL CELLULAR OPERATIONS 1ST QTR 1ST QTR
OPERATING DATA (In thousands) 1997 1996 CHANGE
Cellular POPs (5) 120,774 112,904 7.0 %
Cellular subscribers 1,910 955 100.0 %
Cellular subscriber net adds in qtr,
excluding acquisitions 176 158 11.4 %
U.S. PAGING OPERATIONS (6) 1ST QTR 1ST QTR
OPERATING DATA (In thousands) 1997 1996 CHANGE
Units in service 2,923 2,468 18.4 %
Units in service net adds in quarter,
excluding acquisitions 73 131 (44.3)%
PRIMECO OPERATIONS 1ST QTR 1ST QTR
OPERATING DATA (In thousands) 1997 1996 CHANGE
PCS POPs (4)(5) 14,229 14,300 (0.5)%
PCS subscribers (4) 27 0
3/31/97
INTERNATIONAL CELLULAR Total Sys. Total Sys. Total Sys.
(In thousands) POPs Subscribers Net Adds
European Operations (Percentage Ownership)
Germany (34.8%) 81,490approx2,500 approx.187
Portugal (50.9%) 10,500 361 30
Sweden (51.1%) 8,882 293 12
Belgium (25.0%) 10,065 446 36
Italy (15.5%) 57,500 (aa) 913 (aa) 200
Spain (16.7%) 39,300 768 116
Poland (19.3%) 38,920 119 70
Romania (10.0%) 23,200 0 0
Asian Operations
Japan
Tokyo (15.0%) 42,237
Kansai (13.0%) 20,568
Tokai (13.0%) 14,410
Sub-Total for Digital Phone Group 77,215 1,913 68
Digital TU-KA Companies(a) (4.5%) 46,252 959 427
South Korea (10.7%) 45,600 396 106
India
Madras (20.0%) 6,695 12 1
Madhya Pradesh (49.0%) 72,662 1 1
518,281 8,681 1,254
(a) Cost based investments which are not included in proportionate
results.
(aa) OPI reported more than 913,000 subscribers.
See footnotes.
FOOTNOTES
(1) Because significant assets of the Company are not
consolidated, the Company believes that proportionate financial and
operating data facilitate the understanding and assessment of its
results. Unlike consolidation accounting, proportionate accounting
is not in accordance with generally accepted accounting principles.
Proportionate accounting represents the relative weight of the
Company's ownership interests in its domestic and international
systems, total subscribers of all cellular systems, and total units
in service of all paging systems, exclusive of cost-based investments
and certain equity-based investments that are not material to the
Consolidated Financial Statements taken as a whole.
(2) Operating cash flow is defined as operating income plus
depreciation and amortization and is not the same as cash flow from
operating activities in the Company's Consolidated Statements of Cash
Flows. Proportionate operating cash flow represents the Company's
ownership interest in the respective entities' operating cash flows.
As such, proportionate operating cash flow does not represent cash
available to the Company.
(3) Operating cash flow margin is calculated by dividing
"Operating cash flow" by "Service and other revenues."
(4) PCS data relates to PrimeCo Personal Communications, L.P.
("PrimeCo"), a personal communications service ("PCS") business in
which the Company has a 25% interest.
(5) POPs are the estimated market population multiplied by the
Company's ownership interest in a licensee operating in that market
and include markets in which the networks are under construction and
the markets of certain cost-basis investments not included in
proportionate operating results.
(6) Domestic paging is wholly owned by the Company; therefore,
proportionate information reflects 100% of the subsidiary's
GAAP-basis operating results.
CONTACT: AirTouch Communications Susan Rosenberg, 415/658-2209 |
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