COX COMMUNICATIONS ANNOUNCES 1994 FOURTH QUARTER AND YEAR END FINANCIAL RESULTS.ATLANTA--(BUSINESS WIRE)--March 15, 1995--Cox Communications, Inc. (NYSE NYSE See: New York Stock Exchange : COX) today reported financial results for the fourth quarter and year ended December 31, 1994. On February 1, 1995, Cox Communications Cox Communications is a privately owned subsidiary of Cox Enterprises providing digital cable television and telecommunications services in the United States. It is the third-largest[2] cable television provider in the United States, serving more than 6. completed its acquisition of the cable television operations of The Times Mirror Company, resulting in the formation of the nation's fourth largest multiple system operator serving some 3.2 million customers. As a result of the transaction, Cox Communications became a publicly-traded company. In addition, in November 1994, Cox Communications entered into an agreement to acquire a Newport News, Virginia Newport News is an independent city in Virginia. It is on the southwestern end of the Virginia Peninsula, on the north shore of the James River extending to its mouth at Hampton Roads. The origin of the unusual name of "Newport News" is unclear. , cable television system serving approximately 47,500 subscribers. This transaction is expected to close in the second quarter of 1995. In commenting on the Company's results, Jim Robbins Rob·bins , Frederick Chapman 1916-2003. American microbiologist. He shared a 1954 Nobel Prize for work on the cultivation of the polio virus. , President and Chief Executive Officer, said, "We are pleased to report our financial results to the investment community for the first time as a publicly-held entity. As a result of the acquisition of Times Mirror's cable operations, we are positioned to operate some of the largest and most advanced cable clusters in the country. Backed by one of the industry's strongest balance sheets and our new cable and telephony Meaning "sound over distance," it refers to electronically transmitting the human voice. In the beginning, telephony dealt only with analog signals in the circuit-switched networks of the telephone companies. partners, 1995 will be marked by both the investment in and advancement of our broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). capabilities. Additionally, over the next 12 months we will focus on the consolidation of our cable properties with those acquired from Times Mirror, creating cost efficiencies and streamlined services." "With our partners in the Sprint Alliance, we have obtained the 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. licenses in some of the nation's most attractive markets. Combined with the benefit of our Pioneers Preference license in Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, and our investment in Teleport Verb 1. teleport - transport by dematerializing at one point and assembling at another science fiction - literary fantasy involving the imagined impact of science on society transport - move something or somebody around; usually over long distances , this alliance will be a significant entity in the emerging communications marketplace. With these efforts progressing, Cox Communications is well on its way to becoming one of the first fully integrated providers of video, voice and data services to all our customers." RESULTS FROM OPERATIONS The historical results below do not reflect the inclusion of the financial results attributable to the Times Mirror acquisition or the pending Newport News Newport News, independent city (1990 pop. 170,045), SE Va., on the Virginia peninsula, at the mouth of the James River, off Hampton Roads, near Norfolk; inc. 1896. acquisition. Revenues for the year ended December 31, 1994, were $736.3 million, a 4% increase over revenues of $708.0 million for 1993. While basic customers grew 4% to 1,851,726, regulated revenues increased only 1% as growth from higher customer levels was mitigated mit·i·gate v. mit·i·gat·ed, mit·i·gat·ing, mit·i·gates v.tr. To moderate (a quality or condition) in force or intensity; alleviate. See Synonyms at relieve. v.intr. To become milder. by the increased impact of FCC (1) (Federal Communications Commission, Washington, DC, www.fcc.gov) The U.S. government agency that regulates interstate and international communications including wire, cable, radio, TV and satellite. The FCC was created under the U.S. rate regulation. The estimated impact of rate regulation was approximately $41 million in 1994 as compared to $11 million in 1993. The increased impact of regulation was due to full year impact of the first set of regulations implemented on September 1, 1993, and the impact of the second set of regulations implemented on July 14, 1994. Premium service revenues grew 2%. Advertising revenues increased 19% to $37.7 million and pay-per-view revenues grew 8% to $20.2 million in 1994 due to the launch of new programming and an increase in the number of channels available to customers. Revenues from the Company's satellite services operations (Cox Satellite Programming and PRIMESTAR) increased 45% to $22.1 million in 1994 due to a 33% growth in customers and increased channel capacity for direct broadcast satellite, which allowed for additional premium and pay-per-view services. 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. before depreciation and amortization) for the year ended December 31, 1994, decreased 9% to $268.5 million from $295.6 million for 1993. This decline was due to the impact of rate regulation, higher programming costs and the August 1994 settlement 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. regarding the assessment of customer late fees in several California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). markets. Operating cash flow stated above includes a loss from satellite services of $0.8 million in 1994 and a loss of $1.5 million in 1993. Operating cash flow includes a charge of $4.4 million in 1994 and $3.8 million in 1993 related to executive compensation under a plan that will be replaced by another long-term incentive plan. Under the terms of the new plan, Cox will not be required to record compensation expense for plan awards. Operating income declined 22% due to the factors discussed above and an 11% increase in depreciation and amortization primarily related to 1993 increased 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. . Equity in net losses of affiliated companies Affiliated Companies A situation that occurs when one company owns a minority interest (less than 50%) in another company. Also refers to companies that are related to each other in some way. Notes: An affiliated company is sometimes referred to as a subsidiary. was $43.9 million, a $15.7 million increased over 1993 primarily due to ownership interests in several start-up ventures, such as SBC (1) (SBC Communications Inc., San Antonio, TX, www.sbc.com) A large, national telecommunications company that grew from a multitude of local and regional companies, including Southwestern Bell, Pacific Bell and Nevada Bell, into a single, unified brand by 2002. CableComms, Teleport and UK Living. Interest expense rose $33.2 million to $46.1 million in 1994 due to a restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of Cox Enterprises' ownership in Cox Communications. Income before the cumulative effect of accounting changes was $26.6 million for the year ended December 31, 1994, a 66% decrease from $77.1 million for 1993. The cumulative effect of accounting changes relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the adoption of 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 Nos. 106, 109 and 112 increased net income in 1993 by $20.7 million. Fourth quarter revenues of $190.0 were 5% higher than revenues of $180.7 million for the fourth quarter of 1993 due to a higher customer base. The impact of rate regulation was approximately $13 million for the fourth quarter of 1994 as compared to $8 million for the same period in 1993. Premium service revenues increased 2%, advertising revenues increased 23% and pay-per-view revenues remained level as compared to the fourth quarter of 1993. Revenues from satellite services increased 71% to $7.2 million. Operating cash flow for the fourth quarter decreased 17% to $63.0 million from $75.5 million for the fourth quarter of 1993 primarily due to rate regulation and higher programming costs. Fourth quarter net income was $4.1 million as compared to net income of $16.6 million in 1993's fourth quarter. PRO FORMA As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma RESULTS Reflecting the Company's acquisition of Times Mirror's cable properties on a pro forma basis, revenues for the year ended Dec. 31, 1994, would have been $1.234 billion, a 5% increase from revenues of $1.178 billion in 1993. Operating cash flow for the year ended Dec. 31, 1994, would have decreased 5% to $473.6 million from $497.5 million in 1993. Pro forma income before the cumulative effect of accounting changes would have been a loss of $43.1 million in 1994 as compared to income of $4.5 million in 1993. Fourth quarter pro forma revenues would have been $319.1 million, a 5% increase from revenues of $302.6 million for the fourth quarter in 1993. Fourth quarter operating cash flow would have been $119.0 million, an 8% decrease from $129.0 million for the fourth quarter of 1993, and the net loss would have been $8.2 million as compared to net income of $2.9 million in 1993. The attached pro forma financial statements Pro forma financial statements A firm's financial statements as adjusted to reflect a projected or planned transaction. "What-if" analysis. do not reflect the pending Newport News acquisition, which is expected to close in the second quarter of 1995. Reflecting this acquisition on a pro forma basis, revenues for the year ended Dec. 31, 1994 would have been $1.254 billion and operating cash flow would have been $483.7 million. Cox Communications Inc. is a fully integrated, diversified diversified (di·verˑ·s , broadband communications company Communications Company is a communications unit of the United States Marine Corps. They are part of Combat Logistics Regiment 37 , 3rd Marine Logistics Group (3MLG) and III Marine Expeditionary Force (III MEF). The unit is based out of the Marine Corps Base Camp Smedley D. , serving some 3.2 million customers, with interests in U.S. and international cable distribution systems, programming, telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. and technology. Internationally, Cox has a 50% stake in SBC CableComms, a cable/telephony business in the United Kingdom; and a 50% interest in STOFA A/S, a Danish cable and SMATV SMATV Satellite Master Antenna Television operating company operating company A business that engages in transactions with outsiders. . Programming interests include Discovery Communications, which operates The Discovery Channel and The Learning Channel 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. and internationally; UK Gold, an entertainment channel in the United Kingdom featuring BBC BBC in full British Broadcasting Corp. Publicly financed broadcasting system in Britain. A private company at its founding in 1922, it was replaced by a public corporation under royal charter in 1927. and Thames Television Thames Television was a franchise holder of the British ITV television network, serving London on weekdays between 1968 and 1992. It was both a broadcaster and a producer of television programmes, making shows both for the local region it covered and for networking nationally programming; UK Living, a cable network in the United Kingdom primarily targeted to women; the Spanish language Spanish language, member of the Romance group of the Italic subfamily of the Indo-European family of languages (see Romance languages). The official language of Spain and 19 Latin American nations, Spanish is spoken as a first language by about 330 million persons network GEMS; the recently announced BBC World
BBC World is the BBC's international news and current affairs television channel. It has the biggest audience of any BBC channel. and BBC Prime BBC Prime is the BBC's general entertainment TV channel in Europe, Africa and the Middle East. It was launched in January 1995 and began broadcasts in Africa in March 1999. It is funded by subscription available either as part of a satellite package or as a stand-alone channel. in Europe; and the Australian Information Media Pty Ltd PTY LTD Propriety Limited (company structure in Australia) . in Australia. Cox Communications has a comprehensive telephony strategy which includes investments in the Sprint Alliance, a partnership with three cable companies and the Sprint Corp. to develop advanced telephony services; and Teleport, the largest alternative access provider in the U.S. (Please see attached financial tables).
Cox Communications, Inc.
Consolidated Statements of Operations
(Unaudited)
(Thousands of Dollars)
Three Months Ended Year Ended
December 31 December 31
1994 1993 1994 1993
--------- ---------- ---------- -----
Revenues $ 189,971 $ 180,709 $ 736,308 $ 707,974
Expenses:
Operating 71,329 58l,102 261,361 231,235
Selling, general
and administration 55,662 47,070 206,421 181,091
Depreciation and
amortization 32,101 30,100 128,774 115,963
--------- ---------- -------- -------
Operating income 30,879 45,437 139,752 179,685
Interest expense (14,927) (3,275) (46,128) (12,918)
Equity in net losses of
affiliated companies (13,566) (12,857) (43,905) (28,230)
Other, net 454 (141) 2,627 4,579
--------- ---------- -------- ------
Income before income
taxes 2,840 29,164 52,346 143,116
Income taxes (1,246) 12,532 25,780 66,040
--------- ---------- -------- ------
Income before cumulative
effect of accounting
changes 4,086 16,632 26,566 77,076
Cumulative effect of
accounting changes -- -- -- 20,718
--------- --------- --------- ------
Net income $ 4,086 $ 16,632 $ 26,566 $ 97,794
======== ========== ========= ========
Pro Forma(a) Pro Forma(a)
Three Months Ended Year Ended
December 31 December 31
1994 1993 1994 1993
--------- --------- -------- ---------
Revenues $319,128 $302,566 $1,234,394 $1,178,383
Expenses:
Operating 123,215 108,359 470,489 425,051
Selling, general and
administration 76,875 65,177 290,340 255,861
Depreciation and amorti-
zation 70,071 69,001 281,293 265,339
--------- -------- --------- --------
Operating income 48,967 60,029 192,272 232,132
Interest expense (45,774) (35,423) (169,516) (144,792)
Equity in net losses of
affiliated companies (14,593) (14,744) (54,171) (35,776)
Other, net 359 (1,496) 3,338 3,225
--------- --------- -------- -------
Income before income
taxes (11,041) 8,366 (28,077) 54,789
Income taxes (2,817) 5,500 15,058 50,267
---------- --------- --------- -------
Income before cumulative
effect of accounting
changes (8,224) 2,866 (43,135) 4,522
Cumulative effect of
accounting changes -- -- -- 20,718
---------- ---------- --------- --------
Net income $(8,224) $2,866 $(43,135) $25,240
========== ========== ========= ========
(a) Pro Forma results reflect the acquisition of Times Mirror's
cable operations.
Cox Communications, Inc.
Consolidated Balance Sheets
(Unaudited)
(Thousands of Dollars)
At December 31
1994 1994
Historical Pro Forma(a)
Assets
Cash $ 3,346 $ 63,732
Accounts and notes receivable, net of
allowance for doubtful accounts 41,875 89,070
Net plant and equipment 664,265 1,468,865
Investments 568,990 587,700
Intangible assets 542,678 2,346,285
Other assets 53,518 55,244
Total $1,874,672 $4,610,896
Liabilities and Shareholders' Equity Accounts payable and accrued expenses $ 88,833 $ 167,997 Deferred income 16,213 37,509 Deferred income taxes 97,092 403,487 Other liabilities 49,895 83,263 Debt 750,000 2,114,000 Amounts due to Cox Enterprises, Inc. 37,813 37,813 Shareholders' equity: Common stock, $1.00 par value; 1,000 shares authorized and 100 shares outstanding 1 250,000 Additional paid-in capital 670,495 1,352,497 Retained earnings 163,839 163,839 Foreign currency translation adjustment (1,221) (1,221) Net unrealized gain on securities 1,712 1,712 Total shareholders' equity 834,826 1,766,827 Total $1,874,672 $4,610,896
(a) Pro Forma balances reflect the acquisition of Times Mirror's
cable operations.
Cox Communications, Inc.
Summary of Operating Statistics and Investments
Operating Statistics - U.S. Broadband Distribution
At December 31, 1994
Historical Pro Forma
Homes Passed 2,878,857 5,005,099 Basic Subscribers 1,851,726 3,126,634 Basic Penetration 64.3% 62.5% Premium Service Units 1,203,606 1,984,561 Premium Penetration 65.0% 63.5%
U.S. Broadband International Broadband
Distribution Investments Distribution Investments
3.1 million customers in 82 systems (a) 100.0% SBC CableComms (U.K.) 50.0% 152,000 customers in TWC Cable 50.0% STOFA (Denmark) 50.0%
(a) 3.2 million customers including Cox's pro rata share of TWC
Cable.
Telecommunications and Technology Investments
Omaha MTA 100.0% TCG San Diego 53.7% PCS Southern WirelessCo. 15.0% California MTA 40.0%(a) ICTV 35.4% PhillieCo. 17.6% ISD (CableMaster) 25.5% Teleport Communications National Cable Group (TCG) 30.1% Communications 12.5% TCG Hartford 7.7% PRIMESTAR Partners 10.4% TCG Los Angeles 9.6% StarSight Telecast 10.6% TCG Omaha 65.0% Telecorp Systems 24.5% TCG Phoenix 56.2%
(a) Adjusted for pending transactions
U.S. Programming Investments International Programming Investments DCR Associates 14.0% Australia Information Discovery Communications 24.6% Network 27.5% E! Entertainment 10.5% BBC Europe 10.0% Home Shopping Network 0.1% Discovery International 24.6% Television Food Network 1.9% GEMS 50.0% The Sunshine Network 5.3% UK Gold 37.9% Times Mirror Programming UK Living 49.6% Partnership 33.3% Turner Broadcasting System 0.1% Viewer's Choice 20.0% CONTACT: Cox Communications, Inc., Atlanta Dallas Clement Clement, in the Bible Clement, in Philippians, one of Paul's coworkers. He is traditionally identified with St. Clement of Rome, the likely author of a letter written from there to the Corinthian church in c.A.D. 96. , 404/843-5677 (Analysts and Investors) or Ellen East, 404/843-5854 (Financial and Trade Press) |
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