COX COMMUNICATIONS ANNOUNCES SECOND QUARTER FINANCIAL RESULTS FOR 1996.ATLANTA--(BUSINESS WIRE)--Aug. 7, 1996--Cox Communications, Inc. (NYSE NYSE See: New York Stock Exchange :COX) today reported financial results for the three months ended June June: see month. 30, 1996. "We continued steady progress in preparing our platform for deployment of new services," 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 Chief Executive Officer. "We made significant steps forward on important issues such as our decision to deploy central node powering for wireline 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. ." "Another highlight of the quarter was our agreement to join the Home partnership, an 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 network that will distribute interactive content via cable's 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. , hybrid fiber-coax distribution platform. As a result of our accelerated platform deployment and partnerships such as @Home, we are very enthusiastic about our success in the new world of telecommunications services In telecommunication, the term telecommunications service has the following meanings: 1. Any service provided by a telecommunication provider. 2. such as wireline and wireless telephony telephony without wires, usually employing electric waves of high frequency emitted from an oscillator or generator, as in wireless telegraphy. A telephone transmitter causes fluctuations in these waves, it being the fluctuations only which affect the receiver. See also: Wireless , high-speed Internet See broadband. access and digital compression." Jimmy Hayes For other persons of the same name, see James Hayes. James Allison "Jimmy" Hayes (born December 21, 1946) is a Republican politician from the state of Louisiana. , Senior Vice President, Finance and Chief Financial Officer, commented he was very pleased with operating results for the quarter. "Operationally, we remain very focused on our core business, even while dealing with many complicated issues with respect to the launch of new services and an increasingly competitive environment. Adjusting for the trades and divestitures, comparable system revenue and 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. for the quarter reflected solid growth of 11% and 10%, respectively. We continued forward with our clustering strategy and expect to close the announced trades with TCI (Trustworthy Computing Initiative) An umbrella term from Microsoft for its efforts to improve security in Windows. TCI was announced in 2002 after viruses such as Code Red and Nimda had succeeded in attacking numerous Windows computers. , Continental and Time Warner Time Warner Inc. (NYSE: TWX), formerly known as AOL Time Warner, is the world's largest media and entertainment conglomerate headquartered in New York City, with major operations in film, television, publishing, Internet service and telecommunications. at the end of the year." QUARTERLY RESULTS FROM OPERATIONS Revenues for the three months ended June 30, 1996 were $357.3 million, a 9% increase over revenues of $328.1 million for the three months ended June 30, 1995. Basic customers were 3,216,993 at June 30, 1996. Adjusting for the acquisitions and sales of cable systems during 1996 and 1995, total revenues increased 11% and basic customers grew 2.8% compared to the second quarter of 1995. Regulated revenues for the second quarter of 1996 grew 7% over the same period in 1995 to $238.1 million. On a comparable basis, adjusting for the acquisitions and sales of cable systems, regulated revenues increased 10% compared to the same period in 1995 due to the larger customer base and average rate increases of $1.80 per month per subscriber during the second half of 1995. These rate increases reflected channel additions and the allowable 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 and external costs, primarily programming fee increases. A la carte revenues increased 21% to $11.8 million reflecting continued growth as additional systems offer a la carte packages, and selected price adjustments during the fourth quarter of 1995. Premium service revenues for the current quarter were $47.8 million, down 1% from the second quarter of 1995; however, adjusting for the acquisitions and sales, premium service revenues were consistent with the same quarter in 1995. The average premium channel rate per unit decreased during the current quarter due to the April 1996 launch of a three-for-one premium channel promotion. This promotion boosted growth in premium units to 2,149,196 at June 30, 1996 compared to 1,835,261 at June 30, 1995. 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 second quarter of 1996 were $9.9 million, down 22% from the same period in 1995 as a result of Phoenix Suns playoff games Noun 1. playoff game - one game in the series of games constituting a playoff game - a single play of a sport or other contest; "the game lasted two hours" playoff - any final competition to determine a championship and other non-recurring sporting events in 1995. Advertising revenues increased 11% to $18.7 million reflecting continued gains in national account revenue. Revenues from satellite operations (Cox Satellite Programming and 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. ) were $19.2 million for the current quarter, an 112% increase over revenues of $9.1 million for the same quarter in 1995 as PrimeStar customers increased from 30,849 at June 30, 1995 to 88,163 at June 30, 1996. Programming costs were $85.7 million for the second quarter of 1996, an increase of 6% over the comparable period in 1995 due primarily to Cox's larger customer base and the offering of additional channels. Marketing costs were $11.7 million for the current quarter, an 11% increase over the second quarter of 1995 primarily as a result of sales programs associated with the premium channel promotion and an increase in advertising. General and administrative expenses for the second quarter of 1996 increased 8% to $72.3 million due to the increase in salaries and benefits associated with Cox's larger customer base. Also included in general and administrative expenses for the current quarter is $1.1 million related to the development of high-speed data and telephony services. Operating cash flow for the second quarter of 1996 was $135.6 million, an 8% increase over operating cash flow of $125.5 million for the second quarter of 1995. Adjusting for the sales and acquisitions of cable systems, operating cash flow growth was 10% over the second quarter of 1995. Included in operating cash flow is a contribution from satellite operations of $1.7 million for the current quarter as compared to a loss of $1.1 million in the second quarter of 1995. The consolidated operating cash flow margin (operating cash flow as a percentage of revenues) for the current quarter was 38.0%, a slight decrease from 38.3% for the second quarter of 1995 due to the up-front up-front or up·front Informal adj. 1. Straightforward; frank. 2. Paid or due in advance: up-front cash. adv. costs associated with the strong growth of the satellite business. Excluding satellite operations, the cable operating cash flow margin for the current quarter was 39.6% which was in line with the second quarter of 1995. The 1996 margin also reflects the expenses related to the development of new services. Depreciation was $63.2 million for the second quarter of 1996, a 39% increase compared to the second quarter of 1995, reflecting the continued upgrade 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 and acceleration of the depreciation of analog converters. 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 second quarter of 1996 was $54.8 million, a 10% decrease compared to the same period in 1995. Interest expense for the current quarter was $34.3 million, a 14% decrease from the second quarter of 1995 due to the capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. of interest expense on debt incurred to fund Sprint Spectrum. Excluding 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. of $11.0 million and $5.8 million for the second quarter of 1996 and 1995, respectively, interest expense was comparable. 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 $28.8 million, a $12.6 million increase over the prior year due to increased losses from Sprint Spectrum and new programming ventures which were partially offset by the elimination of losses from 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 as a result of the SBC/TeleWest merger in October October: see month. 1995. A gain on issuance of stock by affiliated companies of $50.1 million was recognized in the second quarter as a result of the initial public offering of 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 . Net income for the current quarter was $27.0 million as compared to net income of $5.0 million for the second quarter of 1995. YEAR-TO-DATE Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. RESULTS FROM OPERATIONS The results discussed below for the six months ended June 30, 1995 reflect the 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 financial results as if the Times Mirror acquisition had occurred on January January: see month. 1, 1995. Revenues for the six months ended June 30, 1996 were $714.8 million, an 11% increase over pro forma revenues of $641.2 million for the comparable period of 1995. Operating cash flow for the first six months of 1996 was $272.0 million, an 11% increase as compared to $245.5 million for the first six months of 1995. Operating income for the six months ended June 30, 1996 was $116.8 million, a 4% increase from the comparable period of 1995. Interest expense decreased $7.5 million to $68.8 million due to the capitalization of interest expense on debt incurred to fund Sprint Spectrum. Equity in net losses of affiliated companies increased $14.0 million due to the increased losses from Sprint Spectrum and new programming ventures which were partially offset by the elimination of losses from SBC CableComms as a result of the SBC/TeleWest merger. A gain on issuance of stock by affiliated companies of $50.1 million was recognized in the second quarter as a result of the initial public offering of Teleport. A gain on sale of affiliated companies of $4.6 million was recognized in the first quarter of 1996 as a result of the merger of Telecorp and Syntellect. Net income for the six months ended June 30, 1996 was $34.3 million as compared to net income of $4.2 million for the six months ended June 30, 1995. INVESTING ACTIVITIES Cash flows used in investing activities were $203.4 million for the first six months of 1996. Capital expenditures of $256.8 million reflect Cox's strategy of continuing to improve the reliability and capacity of its broadband cable network in preparation for the delivery of additional services. Investments made in affiliated companies of $148.8 million included additional funding of $105.0 million to Sprint Spectrum and other telephony investments and $43.8 million to PrimeStar Partners, Outdoor Life, Speedvision and various other programming interests. Proceeds from sale of business of $201.8 million represent the sales of the Texarkana and the Ashland Ashland (ăsh`lənd). 1 Industrial city (1990 pop. 23,622), Boyd co., E Ky., on terraces along the Ohio River near the influx of the Big Sandy; settled 1786, inc. 1854. and Defiance Defiance, city (1990 pop. 16,768), seat of Defiance co., NW Ohio, at the confluence of the Auglaize and Maumee rivers, in a farm area; settled 1790, inc. 1836. Its manufactures include machinery and food, fabricated-metal, and glass products. Gen. systems and the trade of the Williamsport Williamsport, city (1990 pop. 31,933), seat of Lycoming co., central Pa., on the Susquehanna River; settled 1772, inc. as a borough 1806, as a city 1866. Williamsport grew with the development of the lumber industry in the 19th cent. system for East Providence East Providence, city (1990 pop. 50,380), Providence co., E R.I., on the Providence and Seekonk rivers; inc. as a city 1958. It has a petrochemical production facility and is a wholesale and distribution center for petroleum products in the S New England area. . 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 five largest multiple system operators, serving some 3.2 million customers. Cox 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. with interests in domestic and United Kingdom cable television distribution systems, programming networks and telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. technology. Internationally, Cox has a 14.65% ownership interest in TeleWest plc, a cable/telephony business operating in the United Kingdom. Programming interests include a programming joint venture that owns Outdoor Life Network and Speedvision Network; Discovery Communications, which operates The Discovery Channel and The Learning Channel; and E! Entertainment. International programming interests include UK Gold, an entertainment channel featuring classic 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. Enterprises 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 targeted primarily to women; GEMS Television, a Spanish-language network targeted to women in North and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. ; and BBC Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , which operates 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. . Additionally, Cox has a comprehensive telephony strategy which includes investments in Sprint Spectrum, an alliance with two other cable television companies and the Sprint Corporation to develop advanced telephony services; and Teleport, the first and largest competitive local exchange carrier 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. . -0-
Cox Communications, Inc.
Consolidated Statements of Income
(Unaudited)
(Thousands of Dollars)
Three Months Ended Six Months Ended
June 30 June 30
Pro Forma
1996 1995 % 1996 1995 %
Revenues:
Regulated $238,130 $ 222,376 7% $476,356 $438,172 9%
A la carte 11,830 9,782 21% 24,496 18,908 30%
Premium service 47,761 48,059 (1%) 95,336 95,935 (1%)
Pay-per-view 9,860 12,717 (22%) 22,780 21,329 7%
Advertising 18,671 16,828 11% 35,953 31,345 15%
Satellite 19,246 9,097 112% 36,895 17,233 114%
Other 11,837 9,205 29% 23,017 18,237 26%
Total revenues 357,335 328,064 9% 714,833 641,159 11%
Costs and expenses:
Programming costs 85,746 81,025 6% 174,773 157,182 11%
Plant operations 34,442 33,777 2% 69,242 67,930 2%
Marketing 11,656 10,463 11% 22,393 19,272 16%
General and
administrative 72,291 67,031 8% 143,239 132,273 8%
Satellite
operating and
administrative 17,551 10,224 72% 33,206 19,026 75%
Operating cash flow 135,649 125,544 8% 271,980 245,476 11%
Depreciation 63,220 45,435 39% 119,082 97,135 23%
Amortization 17,592 19,310 (9%) 36,092 36,313 (1%)
Operating income 54,837 60,799 (10%) 116,806 112,028 4%
Interest expense (34,301) (39,912) (14%) (68,806) (76,289) (10%)
Equity in net losses
of affiliated
companies (28,811) (16,251) 77% (48,068) (34,070) 41%
Gain on issuance of
stock by affiliated
companies 50,100 -- -- 50,100 -- --
Gain on sale of
affiliated
companies -- 10,201 -- 4,640 10,201 (55%)
Other, net 5,124 6,219 (18%) 9,881 9,608 3%
Income before
income taxes 46,949 21,056 123% 64,553 21,478 --
Income taxes 19,985 16,026 25% 30,232 17,252 75%
Net income $26,964 $5,030 -- $34,321 $4,226 --
Net income per share $ 0.10 $ 0.02 $ 0.13 $ 0.02
NOTE: Certain amounts in the 1995 financial statements have been
reclassified for comparison purposes.
Cox Communications, Inc.
Consolidated Balance Sheets
(Unaudited)
(Thousands of Dollars)
June 30 December 31
1996 1995
Assets
Cash $43,390 $39,166
Accounts and notes receivable,
less allowance for doubtful
accounts of $7,391 and $6,804,
respectively 107,296 117,885
Net plant and equipment 1,345,539 1,213,857
Investments 1,391,461 1,201,253
Intangible assets 2,743,731 2,775,903
Other assets 101,466 207,193
Total assets $5,732,883 $5,555,257
Liabilities and shareholders' equity
Accounts payable and accrued expenses $184,592 $202,204
Deferred income 35,668 40,900
Deferred income taxes 307,178 288,039
Other liabilities 124,930 116,771
Debt 2,600,807 2,392,725
Amounts due to Cox Enterprises, Inc. 90,870 182,605
Total liabilities 3,344,045 3,223,244
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: 256,440,701
in 1996 and 256,365,194 in 1995 256,441 256,365
Class C Common stock, $1 par value;
14,000,000 shares authorized; shares
issued and outstanding: 13,798,896
in 1996 and 1995 13,799 13,799
Additional paid-in capital 1,740,667 1,739,422
Retained earnings 301,969 267,648
Foreign currency translation adjustment (6,229) (3,413)
Net unrealized gain on securities 82,191 58,192
Total shareholders' equity 2,388,838 2,332,013
Total liabilities and shareholders'
equity $5,732,883 $5,555,257
Cox Communications, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(Thousands of Dollars)
Six Months Ended
June 30
1996 1995
Cash flows from operating activities
Net income $34,321 $ 6,796
Adjustments to reconcile net income to net
cash provided by operating activities, net of
effects of acquisitions:
Depreciation 119,082 89,209
Amortization 36,092 32,431
Equity in net losses of affiliated companies 48,068 34,070
Deferred income taxes (61,987) (7,266)
Gain on issuance of stock by affiliated
companies (50,100) --
Gain on sale of affiliated companies (4,640) (10,201)
(Increase) decrease in accounts receivable 11,192 (9,781)
Increase (decrease) in accounts payable and
accrued expenses (8,202) 2,452
Other, net (3,832) 868
Net cash provided by operating
activities 119,994 138,578
Cash flows from investing activities
Capital expenditures (256,809) (142,759)
Acquisitions, net of cash acquired -- 20,239
Investments in affiliated companies (148,750) (465,102)
Proceeds from sale of business 201,791 13,319
Proceeds from affiliated companies -- 93,046
Other, net 353 2,817
Net cash used in investing activities (203,415) (478,440)
Cash flows from financing activities
Borrowings (repayments) of short-term
debt, net 209,221 (1,055,735)
Proceeds from issuance of debt -- 907,714
Repayment of debt (3,190) (16,501)
Proceeds from exercise of options 907 --
Increase (decrease) in amounts due to CEI (91,496) 167,514
Proceeds from issuance of common stock -- 329,918
Increase (decrease) in book overdrafts (27,797) 16,491
Net cash provided by financing
activities 87,645 349,401
Net increase in cash 4,224 9,539 Cash at beginning of period 39,166 3,346 Cash at end of period $43,390 $12,885
Cox Communications, Inc.
Summary of Operating Statistics and Investments
Operating Statistics - U.S. Broadband Distribution
June 30 March 31 June 30
1995 1996 1996
Homes Passed 4,983,752 5,067,353 4,976,494 Basic Customers 3,202,098 3,299,983 3,216,993 Basic Penetration 64.3% 65.1% 64.6% Premium Service Units 1,835,261 1,900,279 2,149,196 Premium Penetration 57.3% 57.6% 66.8% PrimeStar Customers 30,849 76,190 88,163 Operating Cash Flow Margins (for the quarter ended): Consolidated 38.3% 38.1% 38.0% Cable Operations 39.7% 39.5% 39.6% Ratio of Debt to Annualized Operating Cash Flow 4.8x 4.8x 5.0x
U.S. Broadband International Broadband
Distribution Investments Distribution Investments
3.2 million customers in 28 clusters(a) 100.0% TeleWest plc 14.7% 162,000 customers in TWC Cable Partners 50.0% (a) 3.3 million customers including Cox's pro rata share of TWC Cable
Telecommunications and Technology Investments
PCS license-Omaha MTA 100.0% ICTV 35.4% PCS license-Southern National Cable California MTA 100.0% Communications 12.5% PhillieCo, L.P. 17.6% PrimeStar Partners 10.4% Sprint Spectrum 15.0% StarSight Telecast 8.6% Teleport Communications Group, Inc. 24.5% Syntellect 8.6%
U.S. Programming International Programming
Investments Investments
DCR Associates 13.6% Discovery
International 24.6%
Discovery Communications 24.6% European Channel
Management 10.0%
E! Entertainment 10.4% GEMS 50.0%
Home Shopping Network 0.1% UK Gold 37.9%
Outdoor Life Network 41.0% UK Living 49.6%
Product Information Network 40.0%
Speedvision Network 39.0%
The Sunshine Network 5.3%
Television Food Network 1.9%
Turner Broadcasting System 0.1%
Viewer's Choice 20.0%
CONTACT: Cox Communications, Inc., Atlanta Atlanta (ətlăn`tə, ăt–), city (1990 pop. 394,017), state capital and seat of Fulton co., NW Ga., on the Chattahoochee R. and Peachtree Creek, near the Appalachian foothills; inc. 1847. Analysts and Investors: 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. , Assistant Treasurer (404) 843-5677 or Financial and Trade Press: Ellen East Director of Communications Director of Communications is a position in the private and public sectors. The Director of Communications is responsible for managing and directing an organization's internal and external communications. (404) 843-5854 |
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