Citizens Communications Reports 2004 First-Quarter Results.Business Editors STAMFORD Stamford, town, England Stamford, town (1991 pop. 18,127), in the Parts of Kesteven, Lincolnshire, E central England, on the Welland River. It is a market town. Products include diesel engines, electrical equipment, bricks, and tiles. , Conn.--(BUSINESS WIRE)--May 6, 2004 Citizens Communications Citizens Communications is the parent company of Frontier Telephone, providing telephone and internet access in 24 states. The company headquarters are located at 3 High Ridge Park in Stamford, Connecticut. (NYSE NYSE See: New York Stock Exchange : CZN) today reported first-quarter 2004 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: revenues of $558.5 million, consolidated 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. of $139.8 million, and consolidated net income of $42.9 million. Consolidated operating income reflects $4.6 million of expenses related to the company's ongoing review of financial and strategic alternatives and related compensation arrangements. Consolidated net income for the quarter also includes a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta gain of $24.2 million related to the expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created of certain liabilities. First-quarter 2004 revenue from the company's ILEC (Incumbent Local Exchange Carrier) A traditional local telephone company such as one of the Regional Bell companies (RBOCs). Contrast with CLEC. See ELEC and TELRIC. operations was $509.0 million, compared to $513.6 million in the first quarter of 2003. The decrease is due primarily to lower access services revenues, reduced long-distance long-dis·tance adj. 1. Covering a long distance: a long-distance runner; operating under long-distance supervision. 2. revenue, loss of access lines and the sale of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 11,000 access lines in North Dakota North Dakota, state in the N central United States. It is bordered by Minnesota, across the Red River of the North (E), South Dakota (S), Montana (W), and the Canadian provinces of Saskatchewan and Manitoba (N). in April 2003 (which had revenues of $2.1 million during the first quarter of 2003). These decreases were partially offset by continued increases in data and enhanced service Enhanced service is service offered over commercial carrier transmission facilities used in interstate communications, that employs computer processing applications that act on the format, content, code, protocol, or similar aspects of the subscriber's transmitted information; revenues. The company added a record 21,500 DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary customers during the quarter and had almost 142,000 DSL subscribers at March 31, 2004. The company's access line count, which does not take into account DSL subscriptions, decreased 10,800 lines during the quarter. ILEC operating income for the first quarter of 2004 was $138.7 million and operating income margin was 27.3 percent. Capital expenditures for the ILEC were $52.9 million for the first quarter of 2004. First quarter 2004 revenue from Electric Lightwave Light in the infrared, visible and ultraviolet ranges, which falls between x-rays and microwaves. Wavelengths are between 10 nanometers and one millimeter. totaled $39.8 million, operating income was $2.4 million, and capital expenditures were $1.8 million. The company produced free cash flow of $133.3 million and retired $93.6 million of debt during the first-quarter 2004 and ended the quarter with $648.0 million in cash. For the first-quarter 2004 the company reported net cash provided by operating activities of $207.2 million, net cash used in investing activities of $55.2 million, and net cash used in financing activities of $87.7 million. On April 1, 2004, the company closed its final utility sale with the completion of the sales of its Vermont Vermont (vərmŏnt`) [Fr.,=green mountain], New England state of the NE United States. It is bordered by New Hampshire, across the Connecticut R. Electric division. The company has completed its utility divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). program, generating a total of $1.9 billion of proceeds, which exceeds the company's original estimate of $1.8 billion. The company uses certain non-GAAP financial measures in evaluating its performance. These include free cash flow. A reconciliation of the differences between free cash flow and the most comparable financial measure calculated and presented in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). is included in the tables that follow. The non-GAAP financial measures are by definition not measures of financial performance under generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting and are not alternatives to operating income or net income reflected in the statement of operations See Income statement. or to cash flow as reflected in the statement of cash flows and are not necessarily indicative indicative: see mood. of cash available to fund all cash flow needs. The non-GAAP financial measures used by the company may not be comparable to similarly titled measures of other companies. The company believes that presentation of non-GAAP financial measures provides useful information to investors regarding the company's financial condition and results of operations because these measures, when used in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with related GAAP financial measures, (i) together provide a more comprehensive view of the company's core operations and ability to generate cash flow, (ii) provide investors with the financial- analytical analytical, analytic pertaining to or emanating from analysis. analytical control control of confounding by analysis of the results of a trial or test. framework upon which management bases financial, operational, compensation and planning decisions, and (iii) presents measurements that investors and rating agencies have indicated to management are useful to them in assessing the company and its results of operations. Management uses these non-GAAP financial measures to plan and measure the performance of its core operations and its divisions measure performance and report to management based upon these measures. In addition, the company believes that free cash flow, as the company defines it, can assist in comparing performance from period to period, without taking into account factors affecting cash flow reflected in the statement of cash flows, including changes in working capital and the timing of purchases and payments. Management uses these non-GAAP financial measures to (i) assist in analyzing the company's underlying financial performance from period to period, (ii) evaluate the financial performance of its business units, (iii) analyze an·a·lyze v. 1. To examine methodically by separating into parts and studying their interrelations. 2. To separate a chemical substance into its constituent elements to determine their nature or proportions. 3. and evaluate strategic and operational decisions, (iv) establish criteria criteria (krītēr´ē  ),n. for compensation decisions, and (v) assist management in understanding the company's ability to generate cash flow and, as a result, to plan for future capital and operational decisions. Management uses these non-GAAP financial measures in conjunction with related GAAP financial measures. The company believes that the non-GAAP financial measures are meaningful and useful for the reasons outlined above. While the company utilizes these non-GAAP financial measures in managing and analyzing its business and financial condition and believes they are useful to management and to investors for the reasons described above, these non-GAAP financial measures have certain shortcomings A shortcoming is a character flaw. Shortcomings may also be:
See:Residual value cash flow available for discretionary expenditures, since items such as debt repayments are not deducted de·duct v. de·duct·ed, de·duct·ing, de·ducts v.tr. 1. To take away (a quantity) from another; subtract. 2. To derive by deduction; deduce. v.intr. from such measure. Management compensates for the shortcomings of these measures by utilizing them in conjunction with their comparable GAAP financial measures. The information in this press release should be read in conjunction with the financial statements and footnotes contained in our documents to be filed with the U.S. Securities and Exchange Commission. About Citizens Communications More information about Citizens can be found at www.czn.net. This document contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. in the statements. These and all forward-looking statements (including oral representations) are only predictions or statements of current plans that are constantly under review by the company. All forward-looking statements may differ from actual results. The foregoing information should be read in conjunction with the company's filings with the U.S. Securities and Exchange Commission including, but not limited to, reports on Forms 10-K and 10-Q. The company does not intend to update or revise these forward-looking statements to reflect the occurrence of future events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or .
Citizens Communications Company
Consolidated Financial Data
(unaudited)
For the quarter ended
--------------------------
(Amounts in thousands - except per-share March 31, March 31, %
amounts) 2004 2003 Change
-------- -------- ------
Income Statement Data
Revenue $558,468 $651,862 -14%
Cost of services (exclusive of depreciation
and amortization) 57,064 113,219 -50%
Other operating expenses 214,867 234,422 -8%
Restricted stock based compensation 2,873 1,378 108%
Depreciation and amortization 143,858 138,548 4%
Operating income 139,806 164,295 -15%
Investment and other income, net 25,294 47,919 -47%
Interest expense (includes dividends on
preferred securities) 97,782 110,576 -12%
Income tax expense 24,450 39,976 -39%
Cumulative effect of change in accounting
principle - 65,769 -100%
Net income attributable to common
shareholders 42,868 127,431 -66%
Weighted average shares outstanding 283,990 281,637 1%
Net income attributable to common
shareholders (1) $ 0.15 $ 0.45 -67%
Other Financial Data
Total capital expenditures 55,188 47,752 16%
Free cash flow (2) 133,340 145,583 -8%
(1) Calculated based on weighted average shares outstanding.
(2) A reconciliation to the most comparable GAAP measure is presented
at the end of these tables.
Citizens Communications Company
Financial and Operating Data
(unaudited)
For the quarter ended
-------------------------------
(Dollars in thousands, except operating March 31, March 31, %
data) 2004 2003 Change
---------- ---------- ------
TELECOMMUNICATIONS
Select Income Statement Data
Revenue
Access services $ 161,483 $ 169,171 -5%
Local services 212,742 214,273 -1%
Long distance and data services 79,005 77,683 2%
Directory services 27,474 27,043 2%
Other 28,264 25,439 11%
ILEC revenue 508,968 513,609 -1%
Electric Lightwave 39,765 41,093 -3%
Total revenue 548,733 554,702 -1%
Expenses
Network access expense 51,541 56,515 -9%
Other operating expenses 209,353 210,833 -1%
Restricted stock based compensation 2,873 1,356 112%
Depreciation and amortization 143,858 138,548 4%
Total expenses 407,625 407,252 0%
Operating Income
ILEC $ 138,718 $ 146,915 -6%
ELI 2,390 535 347%
Other Financial and Operating Data
ILEC capital expenditures $ 52,853 $ 37,877 40%
ELI capital expenditures 1,762 1,147 54%
ILEC depreciation and amortization 138,023 132,355 4%
ELI depreciation and amortization 5,835 6,193 -6%
ILEC access lines (1) 2,375,629 2,435,246 -2%
DSL subscribers 141,942 80,353 77%
ILEC switched access minutes of use
(in millions) 3,000 3,045 -1%
ILEC average monthly revenue per
average line $ 71.25 $ 70.17 2%
(1) On April 1, 2003, we sold approximately 11,000 access lines in
the state of North Dakota. This sale affects the comparability of
data presented.
Citizens Communications Company
Financial and Operating Data
(unaudited)
For the quarter ended
------------------------------------
March 31, March 31, %
(Dollars in thousands) 2004 2003 Change
------------ ---------- -----------
GAS AND ELECTRIC SECTORS (1)
Select Income Statement Data
Revenue $9,735 $97,160 -90%
Gas, electric energy and fuel
oil purchased 5,523 56,704 -90%
Other operating expenses 5,514 23,589 -77%
Restricted stock based
compensation - 22 -100%
Operating income (loss) (1,302) 16,845 -108%
Other Financial Data
Capital expenditures 573 8,314 -93%
(1) The Gas Company in Hawaii division was sold on August 8, 2003, our
Arizona gas and electric divisions were sold on August 11, 2003
and our Vermont transmission facilities were sold on December 2,
2003. The sales of these properties affect the comparability of
data presented.
Citizens Communications Company
Condensed Consolidated Balance Sheet Data
(Dollars in thousands) March 31, December 31,
2004 2003
(unaudited)
----------- -----------
ASSETS
------
Current assets:
Cash and cash equivalents $ 648,012 $ 583,671
Accounts receivable and other current assets 260,528 289,457
Assets held for sale 24,427 23,130
---------- ----------
Total current assets 932,967 896,258
Property, plant and equipment, net 3,471,513 3,525,640
Other long-term assets 3,255,553 3,267,212
---------- ----------
Total assets $7,660,033 $7,689,110
========== ==========
LIABILITIES AND EQUITY
----------------------
Current liabilities:
Long-term debt due within one year $ 7,082 $ 88,002
Accounts payable and other current
liabilities 433,696 437,225
Liabilities related to assets held for sale 10,742 11,128
---------- ----------
Total current liabilities 451,520 536,355
Deferred income taxes and other liabilities 877,332 880,693
Equity
units 460,000 460,000
Long-term debt (1) 4,402,108 4,195,629
Mandatorily Redeemable Convertible Preferred
Securities (1) - 201,250
Shareholders' equity 1,469,073 1,415,183
---------- ----------
Total liabilities and equity $7,660,033 $7,689,110
========== ==========
(1) In accordance with FASB Interpretation No. 46R, the Manditorily
Redeemable Convertible Preferred Securities are classified as debt
effective January 1, 2004.
Citizens Communications Company
Condensed Consolidated Cash Flow Data
(unaudited)
(Dollars in thousands)
For the three months
ended March 31,
--------------------
2004 2003
-------- --------
Income before cumulative effect of change in
accounting principle $ 42,868 $ 61,662
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization expense 143,858 138,548
Gain on expiration/settlement of customer
advances (24,182) (6,165)
Gain on capital lease termination - (40,703)
Other 44,638 47,010
-------- --------
Net cash provided by operating activities 207,182 200,352
Cash flows from investing activities:
Proceeds from sales of assets, net of selling
expenses - 553
Capital expenditures (55,188) (47,752)
Other - (22)
-------- --------
Net cash used in investing activities (55,188) (47,221)
Cash flows from financing activities:
Long-term debt payments (93,560) (89,438)
Other 5,907 (947)
-------- --------
Net cash used in financing activities (87,653) (90,385)
Increase in cash and cash equivalents 64,341 62,746
Cash and cash equivalents at January 1, 583,671 393,177
-------- --------
Cash and cash equivalents at March 31, $648,012 $455,923
======== ========
Schedule A
Reconciliation of Non-GAAP Financial Measures
For the quarter ended March 31,
-------------------------------
(Dollars in thousands) 2004 2003
------------- ------------
Net Income to Free Cash Flow;
------------------------------
Net Cash Provided by Operating
Activities
---------------------------------
Net income $ 42,868 $127,431
Add back:
Depreciation and amortization 143,858 138,548
Income tax expense 24,450 39,976
Restricted stock based
compensation 2,873 1,378
Subtract:
Cash paid for income taxes 227 310
Investment and other income, net 25,294 47,919
Cumulative effect of change in
accounting principle - 65,769
Capital expenditures 55,188 47,752
------------- ------------
Free cash flow 133,340 145,583
Add back:
Deferred income taxes 20,991 79,808
Noncash (gains)/losses, net (21,312) (44,911)
Investment and other income/(loss) 25,294 47,919
Cash paid for income taxes 227 310
Capital expenditures 55,188 47,752
Subtract:
Changes in current assets and
liabilities (20,777) 34,755
Income tax expense 24,450 39,976
Restricted stock based
compensation 2,873 1,378
------------- ------------
Net cash provided by operating
activities $207,182 $200,352
============= ============
|
|
||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion