Citizens Communications Reports 2007 Second-Quarter Results.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 second quarter 2007 revenues of $578.8 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 $171.3 million, and net income of $40.6 million. Net income of $101.7 million for the second quarter of 2006 included the effects of the $64.6 million in cash received upon the liquidation The collection of assets belonging to a debtor to be applied to the discharge of his or her outstanding debts. A type of proceeding pursuant to federal Bankruptcy of the Rural Telephone Bank. Excluding that gain, net income for the second quarter of 2006 would have been $63.0 million. Second quarter 2007 revenue was $578.8 million, as compared to $506.9 million in the second quarter of 2006. Second quarter 2007 results include revenues of $83.0 million related to the operations of Commonwealth Telephone Enterprises, which was acquired on March 8, 2007. Revenues, excluding the acquired property, were down 2.2 percent as compared to the same period last year, primarily due to lower federal and state subsidies which are reflected in access revenues, and lower local services revenue, partially offset by improvement in data and internet services. Excluding the acquired property, the Company experienced 17.3 percent growth in data and internet services revenue in the second quarter of 2007, compared to the second quarter of 2006. Second quarter 2007 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. were $215.2 million, as compared to $179.5 million in the second quarter of 2006. Excluding the expense increase due to the acquisition, the Company's other operating expenses for the second quarter of 2007 decreased by approximately $5.3 million or 3.0 percent, as compared to the second quarter of 2006 primarily driven by a reduction in the number of employees and improved expense control in benefit costs. Depreciation and amortization expense for the second quarter of 2007 was $140.5 million, as compared to $119.6 million in the second quarter of 2006. Depreciation and amortization expense for the second quarter of 2007, excluding the impact of the acquisition, decreased $6.2 million or 5.2 percent as compared to the second quarter of 2006. The decrease is primarily due to a declining net asset base. The Company added approximately 15,300 high-speed internet See broadband. customers during the quarter and had more than 479,300 high-speed internet customers at June 30, 2007. Operating income for the second quarter of 2007 was $171.3 million and operating income margin was 29.6 percent. Excluding the acquired property, operating income for the second quarter of 2007 was $163.3 million and operating income margin was 32.9 percent compared to $169.5 million and 33.4 percent in the second quarter of 2006. Capital expenditures were $66.7 million for the second quarter of 2007 and $111.8 million for the first six months of 2007, including $12.9 million related to the acquired property since the date of acquisition. Free cash flow was $116.3 million for the second quarter of 2007 and $303.9 million for the first six months of 2007. The Company's dividend represents a payout pay·out n. 1. The act or an instance of paying out. 2. A percentage of corporate earnings that is paid as dividends to shareholders. of 56 percent of free cash flow for the first six months of 2007. During the second quarter, the Company repurchased 3,809,800 shares of its common stock for $58.7 million. In addition, during the second quarter, the Company redeemed $495.2 million principal amount of its 7.625% Senior Notes due 2008. "We delivered another quarter of strong financial results," 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. "Continued customer product revenue growth along with disciplined expense control and realized synergies on our Commonwealth acquisition generated a 53.9 percent 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. Our penetration levels increased on all bundled products and high speed revenues continued to be over $40.00 per customer per month. We are also excited about our recently announced acquisition of Global Valley and remain confident in delivering on our results for the remainder of the year." 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:
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. in determining such measure. Operating cash flow has similar shortcomings as interest, income taxes, capital expenditures, debt repayments and dividends are not deducted in determining this 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 filed with the U.S. Securities and Exchange Commission. 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 successfully integrate the operations of Commonwealth Telephone Enterprises, Inc. and to realize the synergies from the Commonwealth acquisition; changes in the number of our revenue generating units; greater than anticipated competition from wireless or wireline carriers; 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. ; our ability to successfully introduce new product offerings, including bundled service packages; our ability to sell enhanced services 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; ; our ability to comply with federal and state regulations; 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 renegotiate re·ne·go·ti·ate tr.v. re·ne·go·ti·at·ed, re·ne·go·ti·at·ing, re·ne·go·ti·ates 1. To negotiate anew. 2. To revise the terms of (a contract) so as to limit or regain excess profits gained by the contractor. expiring union contracts; overall changes in the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. market and general and local economic and employment conditions. 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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