COX COMMUNICATIONS ANNOUNCES THIRD QUARTER FINANCIAL RESULTS FOR 1996.ATLANTA--(BUSINESS WIRE)--Nov. 11, 1996--Cox Communications, Inc. (NYSE NYSE See: New York Stock Exchange :COX) today reported financial results for the three months ended September September: see month. 30, 1996. "During the quarter we continued on our path to become the pre- pre- word element [L.], before (in time or space). pre- pref. 1. Earlier; before; prior to: prenatal. 2. eminent Eminent may refer to:
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. . "Our mission has not changed. We intend to fully leverage our superior platform to provide a number of Cox-branded products that complement our existing video service. We intend to launch 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. , high-speed internet See broadband. access and digital compression in all of our highly clustered markets. "I am pleased to report 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. was recognized as number one in customer satisfaction among all cable operators in J.D. Power & Associates' 1996 Residential Cable Satisfaction Survey. This honor As a verb, to accept a bill of exchange, or to pay a note, check, or accepted bill, at maturity. To pay or to accept and pay, or, where a credit so engages, to purchase or discount a draft complying with the terms of the draft. provides further affirmation A solemn and formal declaration of the truth of a statement, such as an Affidavit or the actual or prospective testimony of a witness or a party that takes the place of an oath. An affirmation is also used when a person cannot take an oath because of religious convictions. that our efforts to develop tight customer bonds are paying off as we prepare to launch new services." 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 and Chief Financial Officer, commented he was pleased to report continued solid growth in operating results for the quarter. "On an apples-to-apples basis, adjusting for system trades and sales, 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. growth was 9% and customer growth was 2.5% over the comparable quarter of 1995. Additionally, our 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. continues on pace and we expect to be on target with our capital spending forecast of approximately $570 million for the year." QUARTERLY RESULTS FROM OPERATIONS Revenues for the three months ended September 30, 1996 were $363.8 million, a 9% increase over revenues of $335.1 million for the three months ended September 30, 1995. Basic customers were 3,235,442 at September 30, 1996. Adjusting for the acquisitions and sales of cable systems during 1996 and 1995, total revenues increased 10% and basic customers grew 2.5% compared to the third quarter of 1995. Standard service revenues for the third quarter of 1996 grew 5% over the same period in 1995 to $245.9 million. Adjusting for the acquisitions and sales of cable systems, standard service revenues increased 8% compared to the same period in 1995 due to a larger customer base and rate increases during the fourth quarter 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. Premium service revenues for the current quarter were $47.3 million, down 1% from the third quarter of 1995. Adjusting for the acquisitions and sales, premium service revenues were consistent with the same quarter in 1995. The average premium channel rate per unit was lower in the current quarter as compared to the same period in 1995 due to the April 1996 launch of a three-for-one premium channel promotion. This promotion boosted growth in premium units to 2,044,019 at September 30, 1996 compared to 1,835,363 at September 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 third quarter of 1996 were $10.2 million, down 20% from the same period in 1995 primarily as a result of the Tyson/McNeeley boxing event in 1995. Advertising revenues increased 22% to $21.5 million primarily as a result of additional revenues from a Sprint campaign. Revenues from satellite operations (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. and Cox Satellite Programming) were $22.0 million for the current quarter, a 111% increase over revenues of $10.5 million for the same quarter in 1995 as PrimeStar customers increased from 40,885 at September 30, 1995 to 103,004 at September 30, 1996. Programming costs were $88.0 million for the third quarter of 1996, an increase of 8% over the comparable period in 1995 due primarily to Cox's larger customer base and the offering of additional channels. Plant operations expenses increased 12% to $35.8 million due to additional salaries and benefits associated with Cox's increased focus on customer retention programs. Marketing costs were $11.0 million for the current quarter, a 3% decrease from the third quarter of 1995 primarily due to increased marketing reimbursements from programmers This is a list of programmers notable for their contributions to software, either as original author or architect, or for later additions. See also: Game programmer, List of computer scientists . General and administrative expenses for the third quarter of 1996 decreased slightly to $71.6 million due to efficiencies gained through continued implementation of the shared services shared services, n.pl the administrative, clinical, or other service functions that are common to two or more hospitals or their health care facilities and used jointly or cooperatively by them. initiative offset by costs associated with the development of 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. Operating cash flow for the third quarter of 1996 was $138.1 million, an 8% increase over operating cash flow of $128.4 million for the third quarter of 1995. Adjusting for the sales and acquisitions of cable systems, operating cash flow growth was 9% over the third quarter of 1995. Included in operating cash flow is a contribution from satellite operations of $2.7 million for the current quarter as compared to $0.6 million in the third 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 third 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. marketing 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%, a slight increase over the third quarter of 1995. The cable operating cash flow margin also includes the additional costs associated with the development of new high-speed data and telephony services. Depreciation was $61.0 million for the third quarter of 1996, a 19% increase compared to the third 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. 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 third quarter of 1996 was $59.6 million, a 1% increase compared to the same period in 1995. Interest expense for the current quarter was $37.0 million, a 2% decrease from the third 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 on debt incurred to fund Sprint Spectrum. Total interest costs, 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 $10.8 million and $6.1 million for the third quarter of 1996 and 1995, respectively, increased 8.9% to $47.8 million due primarily to the increase in total debt outstanding. 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 $53.2 million, a $27.6 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. Net loss for the current quarter was $28.1 million as compared to net loss of $14.0 million for the third 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 nine months ended September 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 nine months ended September 30, 1996 were $1,078.6 million, a 10% increase over revenues of $976.2 million for the comparable period of 1995. Operating cash flow for the first nine months of 1996 was $410.1 million, a 10% increase as compared to $373.9 million for the first nine months of 1995. Operating income for the nine months ended September 30, 1996 was $176.4 million, a 3% increase from the comparable period of 1995. Interest expense decreased $8.3 million to $105.8 million due to the capitalization of interest to fund Sprint Spectrum. Equity in net losses of affiliated companies increased $41.6 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 of 1996 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 . 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 Systems and Syntellect. Net income for the nine months ended September 30, 1996 was $6.2 million as compared to a net loss of $9.8 million for the nine months ended September 30, 1995. INVESTING AND FINANCING ACTIVITIES Cash flows used in investing activities were $434.7 million for the first nine months of 1996. Capital expenditures of $392.7 million reflects 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 $242.0 million included additional funding of $187.7 million to Sprint Spectrum and other telephony investments and $54.3 million to PrimeStar Partners, Outdoor Life, Speedvision and various other programming interests. Proceeds from sale of businesses of $201.8 million represents the sales of the Texarkana, 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 an 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. system. The total debt balance at September 30, 1996 includes debt of $251.9 million to the 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. for the Los Angeles-San Diego Diego is a Spanish male name, derived from the Hebrew Yaʿqob (Jacob), the name of Saint James the Great, via Sant Yago, re-analysed as Santiago and SanDiego. MTA (1) (Message Transfer Agent or Mail Transfer Agent) The store and forward part of a messaging system. See messaging system. (2) See M Technology Association. 1. (messaging) MTA - Message Transfer Agent. 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. license and $106.9 million used to fund the start-up Start-up The earliest stage of a new business venture. operations of the Los Angeles-San Diego PCS business. During November 1996, Cox, Cox Enterprises Cox Enterprises is the successor to the publishing company founded in Dayton, Ohio, by James Middleton Cox, who began with the Dayton Daily News. The company is private, 98% controlled by the octogenarian daughter of Cox, Anne Cox Chambers, and the two children of her late , Inc. and Sprint Spectrum intend to form a new partnership, Cox Communications PCS, L.P., which will retain the Los Angeles-San Diego MTA PCS license and manage the operations of the business. Upon the transfer of the license, which is expected to occur later in the fourth quarter, provisions in the partnership agreement will provide for the offset of $298.4 million of debt outstanding at September 30, 1996 related to the PCS license and business. If the transfer had been made at September 30, 1996, Cox's debt related to the PCS license and business would have been $60.4 million with a future funding obligation of $111 million. On a pro forma basis for this transfer, Cox's ratio of debt to annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. operating cash flow at September 30, 1996 would have been 4.9x including the $60.4 million of debt as well as the future funding obligation of $111 million. Cox Communications, Inc. is the nation's fifth largest multiple system operator, serving some 3.2 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) and direct-to-home (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; and programming networks. (See attached financial information) -0-
Cox Communications, Inc.
Consolidated Statements of Income
(Unaudited)
(Thousands of Dollars)
Three Months Ended Nine Months Ended
September 30 September 30
------------------- ------------------
Pro Forma
1996 1995 % 1996 1995 %
Revenues:
Standard service $245,900 $ 234,084 5% $740,021 $685,744 8%
New product tier 3,547 3,222 10% 10,156 8,546 19%
Premium service 47,278 47,530 (1%) 142,736 143,561 (1%)
Pay-per-view 10,187 12,740 (20%) 32,967 34,069 (3%)
Advertising 21,539 17,614 22% 57,492 48,959 17%
Satellite 22,043 10,458 111% 58,938 27,691 113%
Other 13,322 9,439 41% 36,339 27,676 31%
Total revenues 363,816 335,087 9% 1,078,649 976,246 10%
Costs and expenses:
Programming costs 87,991 81,248 8% 262,764 238,430 10%
Plant operations 35,814 31,960 12% 105,056 99,890 5%
Marketing 10,968 11,251 (3%) 33,361 30,523 9%
General and
administrative 71,635 72,349 (1%) 214,874 204,622 5%
Satellite
operating and
administrative 19,338 9,891 96% 52,544 28,917 82%
Operating cash flow 138,070 128,388 8% 410,050 373,864 10%
Depreciation 61,040 51,329 19% 180,122 148,464 21%
Amortization 17,427 18,152 (4%) 53,519 54,465 (2%)
Operating income 59,603 58,907 1% 176,409 170,935 3%
Interest expense (37,037) (37,866) (2%) (105,843)(114,155) (7%)
Equity in net losses
of affiliated
companies (53,189) (25,595) 108% (101,257) (59,665) 70%
Gain on issuance of
stock by affiliated
companies -- -- -- 50,100 -- --
Gain on sale of
affiliated
companies -- -- -- 4,640 10,201 (55%)
Other, net 4,062 (526) -- 13,943 9,082 54%
Income (loss) before
income taxes (26,561) (5,080) -- 37,992 16,398 132%
Income taxes 1,513 8,937 (83%) 31,745 26,189 21%
Net income (loss) $(28,074) $(14,017) -- $ 6,247 $(9,791) --
Net income (loss)
per share $ (0.10) $ (0.05) $ 0.02 $ (0.04)
NOTE: Certain amounts in the 1995 financial statements have been
reclassified for comparison purposes. In addition, certain
revenue categories have been reclassified in order to more
accurately reflect Cox's product offerings.
Cox Communications, Inc.
Consolidated Balance Sheets
(Unaudited)
(Thousands of Dollars)
Sept. 30 Dec. 31
1996 1995
-------- --------
Assets
Cash $53,718 $39,166
Accounts and notes receivable,
less allowance for doubtful
accounts of $6,988 and $6,804,
respectively 102,755 117,885
Net plant and equipment 1,424,179 1,213,857
Investments 1,296,962 1,201,253
Intangible assets 2,732,858 2,775,903
Other assets 113,630 207,193
Total assets $5,724,102 $5,555,257
Liabilities and shareholders' equity
Accounts payable and accrued expenses $211,194 $202,204
Deferred income 32,461 40,900
Deferred income taxes 246,494 288,039
Other liabilities 66,610 116,771
Debt 2,763,112 2,392,725
Amounts due to Cox Enterprises, Inc. 129,468 182,605
Total liabilities 3,449,339 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: 256,455,896
in 1996 and 256,365,194 in 1995 256,456 256,365
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 1,740,903 1,739,422
Retained earnings 273,895 267,648
Foreign currency translation adjustment (1,860) (3,413)
Net unrealized gain (loss) on securities (8,430) 58,192
Total shareholders' equity 2,274,763 2,332,013
Total liabilities and shareholders'
equity $5,724,102 $5,555,257
Cox Communications, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(Thousands of Dollars)
Nine Months Ended
September 30
-----------------
1996 1995
-------- -------
Cash flows from operating activities
Net income (loss) $ 6,247 $ (7,221)
Adjustments to reconcile net income to net
cash provided by operating activities,
net of effects of acquisitions:
Depreciation 180,122 140,538
Amortization 53,519 50,583
Equity in net losses of affiliated
companies 101,257 59,665
Deferred income taxes (75,529) (12,704)
Gain on issuance of stock by
affiliated companies (50,100) --
Gain on sale of affiliated companies (4,640) (10,201)
(Increase) decrease in accounts and notes
receivable 15,597 (14,600)
Increase in inventory (20,399) (7,675)
Increase (decrease) in accounts payable
and accrued expenses (1,105) 24,187
Increase (decrease) in taxes payable (35,842) 9,190
Other, net (16,906) 15,627
Net cash provided by operating activities 152,221 247,389
Cash flows from investing activities
Capital expenditures (392,671) (248,889)
Acquisitions, net of cash acquired -- 15,860
Investments in affiliated companies (241,984) (482,901)
Proceeds from sale of businesses 201,791 20,000
Proceeds from affiliated companies -- 106,365
Other, net (1,796) 1,233
Net cash used in investing activities (434,660) (588,332)
Cash flows from financing activities
Borrowings (repayments) of short-term
debt, net 366,322 (956,956)
Proceeds from issuance of debt 4,969 907,714
Repayment of debt (5,080) (17,645)
Proceeds from exercise of stock options 1,158 --
Increase (decrease) in amounts due to Cox
Enterprise, Inc. (52,898) 41,508
Proceeds from issuance of Common Stock -- 357,031
Increase (decrease) in book overdrafts (17,480) 26,976
Net cash provided by financing activities 296,991 358,628
Net increase in cash 14,552 17,685
Cash at beginning of period 39,166 3,346
Cash at end of period $ 53,718 $ 21,031
Cox Communications, Inc.
Summary of Operating Statistics and Investments
Operating Statistics - U.S. Broadband Distribution
September 30 June 30 September 30
1995 1996 1996
Homes Passed 4,982,490 4,976,494 4,991,505
Basic Customers 3,216,469 3,216,993 3,235,442
Basic Penetration 64.6% 64.6% 64.8%
Premium Service Units 1,835,363 2,149,196 2,044,019
Premium Penetration 57.1% 66.8% 63.2%
PrimeStar Customers 40,885 88,163 103,004
Operating Cash Flow Margins
(for the quarter ended):
Consolidated 38.3% 38.0% 38.0%
Cable Operations 39.4% 39.6% 39.6%
Ratio of Debt to Annualized
Operating Cash Flow 4.6x 5.0x 5.2x
U.S. Broadband International Broadband
Distribution Investments Distribution Investments
3.2 million customers in
26 clusters(a) 100.0% TeleWest Communications
plc 14.7%
163,500 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
Cox Communications PCS, L.P. 40.0% @ Home 14.2%
PCS license-Omaha MTA 100.0% National Cable
Communications 12.5%
PhillieCo, L.P. 17.6% PrimeStar Partners 10.4%
Sprint Spectrum 15.0% StarSight Telecast 8.6%
Teleport Communications Group,
Inc. 24.6% Syntellect 8.6%
U.S. Programming International Programming
Investments Investments
Digital Cable Radio 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 45.0%
Speedvision Network 39.0%
The Sunshine Network 5.3%
Television Food Network 1.9%
Time Warner 0.1%
Viewer's Choice 20.0%
CONTACT: Cox Communications, Inc., Atlanta 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: Anthony Surratt Manager of Communications (404) 843-5124 |
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