Citizens Communications Reports 2006 Fourth-Quarter Results; Announces New Stock Buyback Program.STAMFORD, Conn. -- 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 fourth quarter 2006 revenues of $504.4 million, 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 $157.0 million, and net income of $63.9 million. Fourth quarter 2006 revenue was $504.4 million, as compared to $517.4 million in the fourth quarter of 2005. We experienced 13.5 percent growth in data and internet services revenue in the fourth quarter of 2006, compared to the fourth quarter of 2005. Revenues were lower in the fourth quarter of 2006 as compared to 2005 due to declines in access service revenues (which include subsidy payments we receive from federal and state agencies) and local, long distance and equipment sales. The fourth quarter of 2005 included approximately $10.0 million of subsidy revenue recorded during that quarter in access service revenues, arising from a missed filing deadline with the Universal Service Fund (USF USF University of South Florida USF Universal Service Fund (often part of phone bill in US) USF University of San Francisco USF University of Sioux Falls USF University of St. ) in the third quarter of 2005. Other operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for the fourth quarter of 2006 decreased by approximately $7.9 million or 4.3 percent, as compared to the fourth quarter of 2005 primarily driven by reductions in employees and improved expense control in benefit costs. Depreciation and amortization expense for the fourth quarter of 2006 decreased $6.8 million or 5.4 percent as compared to the fourth quarter of 2005. The decrease is primarily due to a declining net asset base. The company added approximately 19,700 high-speed internet See broadband. customers during the quarter and had more than 393,000 high-speed data subscribers at December 31, 2006. The number of the company's high-speed internet subscribers has increased by more than 75,000 or 23.6 percent since the beginning of 2006. Operating income for the fourth quarter of 2006 was $157.0 million and operating income margin was 31.1 percent, compared to $165.3 million and 31.9 percent in the fourth quarter of 2005. Capital expenditures were $105.5 million for the fourth quarter of 2006 and $268.8 million for the year. Free cash flow for the fourth quarter was $91.7 million and $539.6 million for the full year. The company's dividend represents a payout of 60 percent of free cash flow for the year. "We delivered a strong fourth quarter capping a year of solid results for 2006. Product revenue growth coupled with disciplined expense control generated a 54.5% 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. margin for the quarter and a 55.3% operating cash flow margin for the year," said Maggie Wilderotter  This biographical article or section is written like a resume.Please help [ improve this article] by revising it to be and encyclopedic. , Chairman 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. of Citizens. "Our innovative Q4 promotions drove penetration levels for all voice, data and video product bundles." The company's Board of Directors has authorized a new share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program. Under the new program, up to $250 million of common stock may be repurchased over the next 12 months. The new stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program could result in the repurchase of up to 5 percent of the company's common stock. The Company expects to spend between $270 million and $280 million in capital expenditures in 2007. Our free cash flow for 2007 is estimated to be between $425 million and $450 million. Both of these 2007 estimates exclude the impact of the pending acquisition of Commonwealth Telephone Enterprises. The company's next regular quarterly cash dividend of $0.25 per share will be paid on March 30, 2007 to shareholders of record on March 9, 2007. The company expects that dividends paid to stockholders in 2007 will be treated as dividends for federal income tax purposes. Shareholders are encouraged to consult with their tax advisors A tax advisor is a financial expert especially trained in tax law. Some countries require tax advisors to verify the balance sheets of companies above a certain size. Individuals usually require tax advisors to minimize taxation, to avoid learning the details of tax law in . The company uses certain non-GAAP financial measures in evaluating its performance. These include free cash flow and operating cash flow. A reconciliation of the differences between free cash flow and operating cash flow and the most comparable financial measure calculated and presented in accordance 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 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 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 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 and operating cash flow, as the company defines them, 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 and evaluate strategic and operational decisions, (iv) establish criteria 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:
About Citizens Communications More information about Citizens can be found at www.czn.net. This press release 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 made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of The Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These statements are made on the basis of management's views and assumptions regarding future events and business performance. Words such as "believe," "anticipate," "expect," and similar expressions are intended to identify forward-looking statements. Forward-looking statements (including oral representations) involve risks and uncertainties that may cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. These risks and uncertainties are based on a number of factors, including but not limited to: our ability to complete the acquisition of Commonwealth Telephone Enterprises, Inc., to successfully integrate their operations and to realize the synergies from the acquisition; our ability to refinance the bridge loan that will be used to finance the cash portion of the merger consideration with long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. ; our ability to effectively manage our operations, costs and 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. ; our ability to successfully introduce new product offerings, including bundled service packages; our ability to sell enhanced services; our ability to comply with federal and state regulations; changes in the number of our revenue generating units; general and local economic and employment conditions; the effects of ongoing changes in the regulation of the communications industry communications industry, broadly defined, the business of conveying information. Although communication by means of symbols and gestures dates to the beginning of human history, the term generally refers to mass communications. ; overall changes in the telecommunications market; and greater than anticipated competition from wireless or wireline carriers. These and other uncertainties related to our business are described in greater detail in our filings with the Securities and Exchange Commission, including our reports on Forms 10-K and 10-Q and the foregoing information should be read in conjunction with these filings. We do not intend to update or revise these forward-looking statements to reflect the occurrence of future events or circumstances. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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