COX COMMUNICATIONS ANNOUNCES FIRST QUARTER FINANCIAL RESULTS FOR 1997.ATLANTA--(BUSINESS WIRE)--May 7, 1997--Cox Communications, Inc. (NYSE NYSE See: New York Stock Exchange : COX COX cyclo-oxygenase ) today reported financial results for the three months ended March 31, 1997. "I'm I'm Contraction of I am. Our Living Language Speakers of some scattered varieties of American English sometimes use I'm instead of I've or I have in present perfect constructions, as in pleased to report that we achieved 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 customer growth of 2.4% during the first quarter, indicating strong performance in the face of increased competition for cable television customers," commented 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 CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "We also continue to progress toward the launch of residential 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. and digital compression compression, external stress applied to an object or substance, tending to cause a decrease in volume (see pressure). Gases can be compressed easily, solids and liquids to a very small degree if at all. services that will leverage the power of our delivery network and complement our core video business. We are advancing through the 'detail' stage of these new-service plans, completing the numerous operational and administrative tasks necessary to support these services and provide a seamless See seamless integration. offering to our customers. "We have a great deal of confidence in offering new services based on our very successful deployment Installing, setting up, testing and running. This military term, which means the placement of troops and equipment in the field, is widely used with computers as an alternate to the word "implementation. of video, voice and data in the apartment community through our Shared Tenant Services initiative in Orange County, where we have achieved penetration The successful unauthorized breach of a security perimeter. See penetration test. levels of nearly 99% for our Cox-branded video and telephony products. In addition, we are pleased with early results of high-speed Internet See broadband. access service in Orange County and 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. service in San Diego San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. where penetration has exceeded our expectations and customers are thrilled thrill v. thrilled, thrill·ing, thrills v.tr. 1. To cause to feel a sudden intense sensation; excite greatly. 2. To give great pleasure to; delight. See Synonyms at enrapture. with both products. "Also," Robbins added, "we enhanced the value of our investments after the close of the first quarter when we exchanged our interests in UK Gold and UK Living, programming channels in the United Kingdom, for a 12.6% share in Flextech, a publicly held programming company. This transaction resulted in an increase in the value of our underlying investment by $160 million." RESULTS OF OPERATIONS Revenues for the three months ended March 31, 1997 were $383.1 million, a 7% increase over revenues of $357.5 million for the three months ended March 31, 1996. Basic customers were 3,275,267 at March 31, 1997, a decrease from 3,299,983 at March 31, 1996 due to the sales and trades of cable systems during 1996 and 1997. Adjusting for these sales and trades, total revenues increased 9% over the same quarter in 1996 and basic customers grew 2.4% over customers at March 31, 1996. Complete basic revenues for the first quarter of 1997 increased 6% over the same period in 1996 to $263.1 million due to customer growth and average rate increases of 6-7% in the fourth quarter of 1996. These rate increases are the result of new channel additions and the pass-through pass-through n. 1. An opening between two rooms, especially a shelved space between a kitchen and dining room that is used for passing food. 2. A route through which something is permitted to pass. 3. of inflation adjustments. New product tier revenues grew 48% to $4.7 million as a result of increased penetration of these channel offerings. Premium service revenues for the current quarter were $45.8 million, down 4% from the first quarter of 1996. Although premium units increased to 1,999,568 at March 31, 1997 from 1,900,279 at March 31, 1996, the average rate per unit was lower in the current quarter due to the continuation continuation - continuation passing style of the premium channel promotion launched in spring 1996. Pay-per-view pay-per-view n. A service offered by cable television companies that allows subscribers to view special programs for an additional charge. pay revenues for the first quarter of 1997 decreased 15% to $11.0 million; however, excluding revenue of $3.2 million from the March 1996 Tyson/Bruno boxing event, pay-per-view revenues increased 13%. Advertising revenues increased modestly to $21.3 million; however, excluding non-recurring revenues of $1.1 million from a 1996 Sprint campaign, advertising revenues increased 10%. Revenues from satellite operations were $25.9 million for the current quarter, a 47% increase over revenues of $17.6 million for the same quarter in 1996 as PrimeStar PrimeStar is a now-defunct U.S. direct broadcast satellite (DBS) organization formed in 1991. PrimeStar was the first DBS system in the United States but slowly declined in popularity with the arrival of DirecTV in 1994 and Dish Network in 1996. customers increased to 145,040 at March 31, 1997 from 79,190 at March 31, 1996. Programming costs were $95.7 million for the first quarter of 1997, an increase of 7% over the same period in 1996 due to customer growth, January January: see month. 1997 programming rate increases and new channel additions. Plant operations expenses increased 9% to $38.1 million due to 1997 annual salary increases and additional repair and maintenance costs related to systems acquired in the trades during the current quarter. Marketing costs decreased 7% to $15.5 million for the current quarter due primarily to costs associated with the February February: see month. 1996 premium channel promotion. General and administrative expenses for the first quarter of 1997 increased 7% to $69.9 million due to annual salary increases, the costs associated with developing and providing high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. data and telephony services and bad debt expense. Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: 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. increased 2% to $139.6 million for the first quarter of 1997. Operating cash flow for the core video business, which excludes satellite and Fibernet operations and $3.2 million of direct costs associated with new services, grew 6% to $140.3 million compared to the first quarter of 1996 after adjusting for the trades and sales of cable systems. The consolidated operating cash flow margin (operating cash flow as a percentage of revenues) for the current quarter was 36.4%, a decrease from 38.1% for the first quarter of 1996 due to the increase in the direct costs of developing and providing data and telephony services and the up-front up-front or up·front Informal adj. 1. Straightforward; frank. 2. Paid or due in advance: up-front cash. adv. marketing and selling costs associated with new PrimeStar customers. The core video business operating cash flow margin was 39.6% for the current quarter, a slight decrease from 39.9% in the first quarter of 1996. Depreciation was $72.8 million for the first quarter of 1997, a 30% increase compared to the same period in 1996 resulting from the continued upgrade and rebuild of the 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). network. 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. for the first quarter of 1997 was $49.7 million, a decrease of 20% compared to the same period in 1996. Interest expense increased $12.3 million to $46.8 million for the first quarter of 1997 due to the elimination of capitalized interest Capitalized interest Interest that is not immediately expensed, but rather is considered as an asset and is then amortized through the income statement over time. In the context of project financing, interest that is paid by additional borrowing. expense as a result of Sprint PCS commencing operations. 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 $81.3 million, a $62.0 million increase over the prior year due to the losses associated with Sprint PCS, Cox PCS and 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 . Gain on exchanges of cable systems includes $27.8 million related to the trade of the Myrtle Beach system for systems in the Hampton, Virginia Hampton is an independent city in Virginia, and therefore not part of any Virginia county. One of the Seven Cities of Hampton Roads, it is on the southeast end of the Virginia Peninsula, bordering on Hampton Roads and Chesapeake Bay. As of the 2000 U.S. systems. Net loss for the current quarter was $37.8 million as compared to net income of $7.4 million for the first quarter of 1996. INVESTING ACTIVITIES Cash flows used in investing activities were $357.6 million for the first quarter of 1997. Capital expenditures of $181.4 million included the continued upgrade and rebuild of the broadband network and the purchase of PrimeStar customer equipment. Investments made in affiliated companies of $129.4 million included additional equity funding Equity funding An investment consisting of a life insurance policy and a mutual fund. The insurance policy is paid by the collateral value of fund shares, giving the investor the advantages of insurance protection with the growth potential of a mutual fund. of $118.8 million to Sprint PCS, Cox PCS and other telephony investments and $10.6 million to PrimeStar Partners, Outdoor Life, Speedvision and other interests. Payments for exchanges of cable systems of $53.4 million were made for the trades which closed during the first quarter of 1997. 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. , Inc. is among the nation's largest cable television operators, serving some 3.3 million customers. As a full service provider of telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. products, Cox has interests in wired telecommunications, including cable television and telephone services; wireless telecommunications, including personal communications services See PCS. (PCS) via Sprint PCS, direct-to-home See DTH. (DTH (Direct-To-Home) Typically refers to satellite TV broadcasting directly to a dish antenna on the roof of a house. See DBS. ) satellite television via PrimeStar, and programming networks including The Discovery Channel. Cox was distinguished for achieving the highest overall customer satisfaction rating among cable television users in the first study of the cable television industry by J.D. Power and Associates in 1996. More information on Cox Communications can be found on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.cox.com . -0-
Cox Communications, Inc.
Consolidated Statements of Operations
(Unaudited)
(Thousands of Dollars)
Three Months Ended
March 31
-------------------
1997 1996 %
Revenues:
Complete basic $263,077 $ 247,631 6%
New product tier 4,748 3,204 48%
Premium service 45,756 47,631 (4%)
Pay-per-view 10,972 12,920 (15%)
Advertising 21,273 20,517 (4%)
Satellite 25,866 17,649 47%
Other 11,418 7,946 44%
------- ------- ----
Total revenues 383,110 357,498 7%
Costs and expenses
Programming costs 95,685 89,016 7%
Plant operations 38,111 34,811 9%
Marketing 15,511 16,657 (7%)
General and
administrative 69,893 65,028 7%
Satellite
operating and
administrative 24,348 15,655 56%
------- ------- ----
Operating cash flow 139,562 136,331 2%
Depreciation 72,847 55,862 30%
Amortization 17,050 18,500 (8%)
------- ------- ----
Operating income 49,665 61,969 (20%)
Interest expense (46,816) (34,505) 36%
Equity in net losses
of affiliated
companies (81,281) (19,257) --
Gain on exchanges of
cable systems 24,642 -- 100%
Gain on sale of
affiliated
companies 2,936 4,640 (37%)
Other, net 4,000 4,757 (16%)
------- ------- ----
Income (loss) before
income taxes (46,854) 17,604 --
Income taxes (9,032) 10,247 (188%)
------- ------- ----
Net income (loss) $(37,822) $ 7,357 --
======= ======= ====
Net income (loss)
per share $ (0.14) $ 0.03
NOTE: Certain amounts in the 1996 financial statements have been
reclassified for comparison purposes.
Cox Communications, Inc.
Consolidated Balance Sheets
(Unaudited)
(Thousands of Dollars)
March 31 Dec. 31
1997 1996
-------- --------
Assets
Cash $71,203 $42,349
Accounts and notes receivable,
less allowance for doubtful
accounts of $8,339 and $7,778 119,519 122,574
Net plant and equipment 1,694,513 1,531,811
Investments 1,197,528 1,219,082
Intangible assets 2,578,860 2,728,955
Other assets 120,940 139,819
Total assets $5,782,563 $5,784,590
Liabilities and shareholders' equity
Accounts payable and accrued expenses $224,534 $220,859
Deferred income 33,157 29,440
Deferred income taxes 367,618 294,453
Other liabilities 61,547 97,526
Debt 2,816,658 2,823,853
Amounts due to Cox Enterprises, Inc. 74,069 57,147
Total liabilities 3,577,583 3,523,278
Shareholders' equity:
Preferred stock, $1 par value; 5,000,000
shares authorized; none issued -- --
Class A Common stock, $1 par value;
286,000,000 shares authorized; shares
issued and outstanding: 256,521,365
and 256,463,651 256,521 256,464
Class C Common stock, $1 par value;
14,000,000 shares authorized; shares
issued and outstanding: 13,798,896 13,799 13,799
Additional paid-in capital 1,781,649 1,742,121
Retained earnings 178,275 216,097
Foreign currency translation adjustment 10,405 23,424
Net unrealized gain (loss) on securities (35,669) 9,407
Total shareholders' equity 2,204,980 2,261,312
Total liabilities and shareholders'
equity $5,782,563 $5,784,590
Cox Communications, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(Thousands of Dollars)
Three Months Ended
March 31
-----------------
1997 1996
-------- -------
Cash flows from operating activities
Net income (loss) $(37,882) $ 7,357
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities, net of effects of acquisitions:
Depreciation 72,847 55,862
Amortization 17,050 18,500
Equity in net losses of affiliated
companies 81,281 19,257
Deferred income taxes 910 (27,108)
Gain on issuance of stock by
affiliated companies (24,642) --
Gain on sale of affiliated companies (2,936) (4,640)
Increase in accounts and notes receivable 583 12,660
Increase in accounts payable and accrued
expenses (13,247) 12,578
Increase (decrease) in taxes payable (15,474) 5,760
Other, net (7,392) (7,517)
Net cash provided by operating activities 71,158 92,709
Cash flows from investing activities
Capital expenditures (181,404) (109,068)
Acquisitions, net of cash acquired (129,393) (57,984)
Investments in affiliated companies 6,983 --
Proceeds from affiliated companies (53,442) --
Proceeds from sale of businesses -- 52,730
Other, net (324) 178
Net cash used in investing activities (357,580) (114,144)
Cash flows from financing activities
Revolving credit borrowings, net 300,000 189,010
Commercial paper repayments, net (55,739) --
Repayment of debt (4,305) (1,703)
Proceeds from exercise of stock options 1,012 829
Increase (decrease) in amounts due to Cox
Enterprises, Inc. 49,914 (136,662)
Increase (decrease) in book overdrafts 24,394 (3,423)
Net cash provided by financing activities 315,276 48,051
Net increase in cash 28,854 26,616
Cash at beginning of period 42,349 39,166
Cash at end of period $ 71,203 $ 65,782
Cox Communications, Inc.
Summary of Operating Statistics and Investments
Operating Statistics - U.S. Broadband Distribution
March 31 Dec. 31 March 31
1996 1996 1997
Homes Passed 5,067,353 5,016,749 5,051,963
Basic Customers (Pro Forma)(a) 3,198,859 3,246,514 3,275,267
Basic Customers 3,299,983 3,259,384 3,275,267
Basic Penetration 65.1% 65.0% 64.8%
Premium Service Units 1,900,279 2,000,673 1,999,568
Premium Penetration 57.6% 61.4% 61.1%
PrimeStar Customers 79,190 130,606 145,040
Operating Cash Flow Margins
(for the quarter ended):
Consolidated 38.1% 38.5% 36.4%
Core Video Operations(b) 39.9% 41.5% 39.6%
Ratio of Debt to Annualized
Operating Cash Flow 4.8x 4.9x 5.2x
(a) Reflects the sales and trades of cable systems in 1996 and
1997.
(b) Excludes satellite, Fibernet and direct costs of telephony &
data services.
U.S. Broadband International Broadband
Distribution Investments Distribution Investments
3.3 million customers 100.0% TeleWest Communications
plc 14.6%
166,400 customers in TWC
Cable Partners 50.0%
Telecommunications and Technology Investments
Cox Communications PCS, L.P. 40.0% At Home Corporation 13.4%
PhillieCo, L.P. 17.6% National Cable
Communications 12.5%
Sprint Spectrum 15.0% PrimeStar Partners 10.4%
Teleport Communications Group, StarSight Telecast 8.5%
Inc. 24.4% Syntellect 8.5%
U.S. Programming International Programming
Investments Investments
Digital Cable Radio 13.6% European Channel
Management 10.0%
Discovery Communications 24.6% Flextech plc 12.6%
E! Entertainment 10.4% GEMS 50.0%
Outdoor Life Network 41.0%
Product Information Network 45.0%
Speedvision Network 39.0%
The Sunshine Network 5.3%
Viewer's Choice 20.0%
CONTACT: Analysts and Investors: Dallas Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. 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. , Treasurer TREASURER. An officer entrusted with the treasures or money either of a private individual, a corporation, a company, or a state. 2. It is his duty to use ordinary diligence in the performance of his office, and to account with those whose money he has. , 404/843-5677 or Financial and Trade Press: Anthony Surratt, Manager of Communications, 404/843-5124 |
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