Citizens Utilities reports record earnings and EPS for the three and nine months ended Sept. 30, 1996 after $8.3 million after-tax charge.

STAMFORD, Conn.--(BUSINESS WIRE)--Nov. 12, 1996--Citizens Utilities announced today higher earnings and earnings per share for the three- and nine-month periods ended September 30, 1996.

The results for these periods reflect earnings increases after the effect of an $8.3 million after-tax charge recognized in the third quarter. The charge follows a decision by the Hawaii Public Utilities Commission (HPUC) to disallow recovery of a portion of the company's costs and expenses related to damaged electric facilities and the restoration and repair of such facilities on Kauai after Hurricane Iniki in September 1992.

The HPUC deemed certain restoration and repair costs, classified by the company as regulatory assets in anticipation of recovery, as being non-recoverable through the rate-making process. In accordance with Financial Accounting Standards No. 121, the company was therefore required to make a charge of these regulatory assets to operating expenses.

Robert J. DeSantis, Citizens' vice president and treasurer, said, "We are pleased that Citizens' strong performance for the third quarter and year-to-date enabled the company to absorb the charge to operating income and report increases in earnings and earnings per share. We fully expect that, absent unforeseen events, Citizens' full-year results will reflect earnings and earnings per share increases at double-digit rates consistent with the analyst consensus."

For the third quarter, revenues grew 23% to $320 million over the $259.7 million reported for the corresponding 1995 quarter. Post the charge, net income of $46 million for the third quarter was 2% over the net income of $45.1 million reported for the same period last year. Absent the charge, net income for the period was up 21% to $54.3 million.

Earnings per share of 20 cents for the third quarter increased 5% from 19 cents for the corresponding 1995 quarter. Excluding the charge, earnings per share for the period increased 21% to 23 cents. For the nine months ended September 30, 1996 revenues were $967.2 million, an increase of 24% over 1995 revenues of $778.4 million. Net income grew to $131.1 million, an 8% increase over net income of $120.9 million for the same period last year. Before the charge, net income for the period increased by 15% to $139.5 million.

Earnings per share of 57 cents for the nine months were up 10% over earnings per share of 52 cents during the corresponding period in 1995. Before the charge, earnings per share for the period grew 15% to 60 cents.

Citizens Utilities (NYSE: CZNA, CZNB) is a full-service telecommunications company and utility company with natural gas, electric, water and wastewater operations, serving 1.8 million customers in 20 states. Citizens has a significant investment in Centennial Cellular, a cellular telephone company, and owns Electric Lightwave, Inc., a competitive telecommunications company serving five major metropolitan areas in the western United States. -0-

            Citizens Utilities Company and Subsidiaries
                   Summary of Financial Results
             for the Three Months and Nine Months Ended
                   September 30, 1996 and 1995
                           (Unaudited)
           (000 omitted except for per-share amounts)

                           3 Months Ended          9 Months Ended
                              Sept. 30                 Sept. 30
                           1996       1995          1996       1995
Revenues                $319,959   $259,732      $967,224   $778,444
Expenses:
 Operating expenses      199,491    147,155       607,454    467,337
 Depreciation             46,246     39,637       140,475    117,134
                         245,737    186,792       747,929    584,471

Income from operations    74,222     72,940       219,295    193,973

Other income, net         17,420     14,320        46,243     42,099
Interest expense          22,366     21,037        67,012     64,741

Income before income
 taxes and dividends on
 convertible preferred
 securities               69,276     66,223       198,526    171,331

Income taxes(1)           21,680     21,162        63,191     50,428
Income before dividends
 on convertible preferred
 securities               47,596     45,061       135,335    120,903

Dividends on convertible
 preferred securities,
 net of Income tax
 benefit                   1,564         --         4,196         --
Net Income              $ 46,032   $ 45,061      $131,139   $120,903

Earnings per share of
 Common Stock Series A
 and Series B(2)            $.20       $.19          $.57       $.52

Average number of shares
 outstanding adjusted for
 subsequent stock
 dividends
   Series A Common Stock 155,303    165,709       155,476    162,446
   Series B Common Stock  78,883     72,433        76,150     68,972

NOTES:
(1) Includes provision for Federal income taxes of $19,295 and $18,411
    for the three months ended September 30, 1996 and 1995,
    respectively; and $56,240 and $43,873 for the nine months ended
    September 30, 1996 and 1995, respectively.

(2) Earnings per share is based on the average number of shares
    outstanding.  Earnings per share is adjusted for subsequent stock
    dividends.  The effect on earnings per share of the exercise of
    dilutive options is immaterial.

CONTACT: Citizens Utilities Co., Stamford

Arthur Dague, 203/329-5094

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