Cox Communications Announces First Quarter Financial Results for 2002.Business Editors ATLANTA--(BUSINESS WIRE)--April 22, 2002 Strong basic subscriber subscriber, n the person, usually the employee, who represents the family unit in relation to the prepayment plan. Other family members are dependents. Also called certificate holders or enrollees. growth and steady growth in new services mark the beginning of a defining year for Cox 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. , Inc. (NYSE NYSE See: New York Stock Exchange : COX) today reported financial results for the three months ended March 31, 2002. "We had a remarkable first quarter, with strong 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 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. (OCF (1) (Open Container Format) See OPS. (2) (OpenCard Framework) A smart card specification from the OpenCard Consortium. ) growth of 12% fueled by basic subscriber growth of 1.3% and continued strength in the rollout of new services," said Jim Robbins Rob·bins , Frederick Chapman 1916-2003. American microbiologist. He shared a 1954 Nobel Prize for work on the cultivation of the polio virus. , President and Chief Executive Officer. "Our momentum continued in the first quarter, as we achieved two new service milestones. First, we were proud to announce that we reached 500,000 Cox Digital Telephone subscribers in the first quarter--further validation See validate. validation - The stage in the software life-cycle at the end of the development process where software is evaluated to ensure that it complies with the requirements. that our decision to enter the circuit-switched 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. business was a winning one. We also reached new heights with our High Speed Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the service, surpassing one million subscribers." Robbins continued: "We now have three million new service revenue generating units (RGUs), with the addition of about 336,000 new service RGUs in the first quarter of 2002 versus 317,000 in the fourth quarter of 2001. These numbers effectively demonstrate our strength at our current size, and that we do not need to grow through acquisitions simply for the sake of scale. As we've we've Contraction of we have. we've have always said we will make acquisitions opportunistically, that make sense both financially and operationally. "2002 will be a defining year for Cox, when we expect to see the cumulative benefits of our concentrated focus on technology, customer care and people. We believe we have the best execution strategy and the best management team in the industry, a strong balance sheet and a steadfast commitment to providing quality customer service, all of which contribute to our continued success and growth. "Cox expects to remain on track to achieve its previously stated year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2002 financial guidance of operating cash flow growth of 13% to 14% over 2001; total revenue growth of 14% to 15% over 2001; and capital expenditures of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $2 billion." Robbins also added that the company added 1.15 million new service RGUs in 2001 and is in line to maintain or exceed that pace." PRO FORMA OPERATING RESULTS Cox provides pro forma information as an alternative for understanding our operating results. The pro forma operating results are not necessarily indicative indicative: see mood. of operating results that would have occurred if the 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 summarized below had not occurred, and may be different from pro forma measures used by other companies. In addition, the pro forma operating results are not necessarily indicative of the results of our future operations. The pro forma operating results for the three months ended March 31, 2002 exclude a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. non-recurring charge of $9.8 million related to the portion of Cox's December December: see month. 2001 payment of $160.0 million to Excite@Home for the continuation continuation - continuation passing style of high-speed Internet See broadband. services through February February: see month. 2002. Please refer to the Pro Forma Operating Results for additional details on this non-recurring item. The pro forma operating results for the three months ended March 31, 2001 reflect a reclassification Reclassification The process of changing the class of mutual funds once certain requirements have been met. These requirements are generally placed on load mutual funds. Reclassification is not considered to be a taxable event. of $17.2 million in costs associated with Excite@Home high-speed Internet service which had previously been netted against data revenue and $1.1 million of such costs which had previously been netted against commercial revenue to selling, general and administrative expenses in order to conform to Verb 1. conform to - satisfy a condition or restriction; "Does this paper meet the requirements for the degree?" fit, meet coordinate - be co-ordinated; "These activities coordinate well" the manner in which the costs associated with Cox High Speed Internet service have been presented. Total pro forma revenues for the first quarter of 2002 increased 17% over the first quarter of 2001, and include the effects of: -- the repurchase of $329.1 million aggregate principal amount at maturity of Cox's convertible senior notes due 2021 that had been properly tendered and not withdrawn, for aggregate cash consideration of $232.8 million, which represented the accreted value of the repurchased notes; -- the aggregate cash payment of $7.5 million to the remaining holders of the convertible notes who elected not to require Cox to repurchase their convertible notes; -- the repayment of approximately $727.4 million of commercial paper borrowings; and -- capital expenditures of approximately $515.4 million to upgrade and rebuild Cox's broadband network. Cox Digital Cable added approximately 155,500 customers in the first quarter of 2002, and is now available in 95% of the homes in Cox's service areas with penetration The successful unauthorized breach of a security perimeter. See penetration test. of total-basic customers of 25%. High-speed Internet and Cox Digital Telephone customers increased by approximately 117,700 and 62,700, respectively, in the first quarter of 2002, and by approximately 414,000 and 224,000, respectively, as compared to March 31, 2001. In addition, basic customers were 6,292,093 at March 31, 2002, a 1.3% increase over the prior year. Pro forma programming costs were $263.9 million for the first quarter of 2002, an increase of 12% over the same period in 2001 primarily due to programming rate increases implemented over the past twelve months, basic and digital customer growth and channel additions. Pro forma selling, general and administrative expenses for the first quarter of 2002 increased 23% to $512.3 million due to: -- the repurchase of $329.1 million aggregate principal amount at maturity of Cox's convertible senior notes due 2021 that had been properly tendered and not withdrawn, for aggregate cash consideration of $232.8 million, which represented the accreted value of the repurchased notes; -- the aggregate cash payment of $7.5 million to the remaining holders of the convertible notes who elected not to require Cox to repurchase their convertible notes; -- the repayment of approximately $727.4 million of commercial paper borrowings; and -- capital expenditures of approximately $515.4 million to upgrade and rebuild Cox's broadband network. Pro forma operating cash flow increased 12% to $401.8 million for the first quarter of 2002. The pro forma operating cash flow margin (pro forma operating cash flow as a percentage of revenues) for the first quarter of 2002 was 34.1%. HISTORICAL OPERATING RESULTS Total revenues for first quarter of 2002 were $1,178.0 million, a 19% increase over revenues of $991.4 million for the first quarter of 2001. Operating cash flow increased 9% to $392.1 million for the first quarter of 2002. Operating cash flow growth is offset by a one-time non-recurring charge of $9.8 million related to the continuation of Excite@Home high-speed Internet services. Depreciation and amortization decreased to $325.8 million from $352.2 million in the first quarter of 2001 due to a reduction in amortization from adoption of Statement of Financial Accounting Standards (SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System ) No. 142, offset by an increase in depreciation from Cox's continuing investments in its 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 in order to deliver additional programming and services. Interest expense decreased to $127.6 million primarily due to decreased interest rates on floating rate debt, interest savings as a result of Cox's interest rate swap Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. agreements and repayments of commercial paper borrowings. For the first quarter of 2002, Cox recorded a $719.8 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta gain on derivative instruments Derivative instruments Contracts such as options and futures whose price is derived from the price of an underlying financial asset. due to the following: -- the repurchase of $329.1 million aggregate principal amount at maturity of Cox's convertible senior notes due 2021 that had been properly tendered and not withdrawn, for aggregate cash consideration of $232.8 million, which represented the accreted value of the repurchased notes; -- the aggregate cash payment of $7.5 million to the remaining holders of the convertible notes who elected not to require Cox to repurchase their convertible notes; -- the repayment of approximately $727.4 million of commercial paper borrowings; and -- capital expenditures of approximately $515.4 million to upgrade and rebuild Cox's broadband network. Net loss on investments of $408.7 million is primarily due to a $170.4 million pre-tax loss related to the sale of 23.9 million shares of AT&T Wireless common stock and a $275.3 million pre-tax loss as a result of the change in market value of Cox's investment in Sprint 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. common stock classified as trading. Minority interest of $12.1 million primarily represents distributions on Cox's obligated ob·li·gate tr.v. ob·li·gat·ed, ob·li·gat·ing, ob·li·gates 1. To bind, compel, or constrain by a social, legal, or moral tie. See Synonyms at force. 2. To cause to be grateful or indebted; oblige. capital and preferred securities of subsidiary trusts, referred to as FELINE feline of, or pertaining to, members of the family Felidae. See also cat. feline agranulocytosis see feline panleukopenia (below). feline actinic dermatitis see solar dermatitis. PRIDES and RHINOS. Net income for the current quarter was $135.6 million compared to net income of $686.6 million for the first quarter of 2001. NEW ACCOUNTING STANDARD On January January: see month. 1, 2002, Cox adopted SFAS No. 142, which requires that goodwill and certain intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. , including those recorded in past business combinations, no longer be amortized through the statement of operations See Income statement. , but instead be tested for impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. at least annually. The adoption of SFAS No. 142 did not result in an impairment charge. Also on January 1, 2002, Cox began applying the guidance prescribed pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). in FASB FASB See: Financial Accounting Standards Board FASB See Financial Accounting Standards Board (FASB). Staff Announcement D-103, whereby the collection and payment of certain fees must be presented on a gross basis, as revenue and expense, rather than on a net basis. Retroactive Having reference to things that happened in the past, prior to the occurrence of the act in question. A retroactive or retrospective law is one that takes away or impairs vested rights acquired under existing laws, creates new obligations, imposes new duties, or attaches a application of this announcement is required. Accordingly, collection and payment of fees, primarily franchise fees, have been reclassified on a gross basis for all historical and pro forma periods presented herein to conform to this new guidance. LIQUIDITY AND CAPITAL RESOURCES Significant sources of cash for the first quarter of 2002 consisted of the following: -- the repurchase of $329.1 million aggregate principal amount at maturity of Cox's convertible senior notes due 2021 that had been properly tendered and not withdrawn, for aggregate cash consideration of $232.8 million, which represented the accreted value of the repurchased notes; -- the aggregate cash payment of $7.5 million to the remaining holders of the convertible notes who elected not to require Cox to repurchase their convertible notes; -- the repayment of approximately $727.4 million of commercial paper borrowings; and -- capital expenditures of approximately $515.4 million to upgrade and rebuild Cox's broadband network. As a result of Cox's first quarter sales described above, Cox no longer owns any shares of AT&T common stock or AT&T Wireless common stock. Significant uses of cash for the first quarter of 2002 consisted of the following: -- the repurchase of $329.1 million aggregate principal amount at maturity of Cox's convertible senior notes due 2021 that had been properly tendered and not withdrawn, for aggregate cash consideration of $232.8 million, which represented the accreted value of the repurchased notes; -- the aggregate cash payment of $7.5 million to the remaining holders of the convertible notes who elected not to require Cox to repurchase their convertible notes; -- the repayment of approximately $727.4 million of commercial paper borrowings; and -- capital expenditures of approximately $515.4 million to upgrade and rebuild Cox's broadband network. At March 31, 2002, Cox had approximately $6.9 billion of outstanding indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. , net of cumulative derivative derivative: see calculus. derivative In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function. adjustments made 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 SFAS No. 133 which reduced reported indebtedness by approximately $1.1 billion, and $1.3 billion of Cox-obligated capital and preferred securities of subsidiary trusts. About Cox Communications Cox Communications (NYSE: COX), a Fortune 500 company, is a multi-service broadband communications company Communications Company is a communications unit of the United States Marine Corps. They are part of Combat Logistics Regiment 37 , 3rd Marine Logistics Group (3MLG) and III Marine Expeditionary Force (III MEF). The unit is based out of the Marine Corps Base Camp Smedley D. serving approximately 6.3 million customers nationwide. Cox is the nation's fifth-largest cable television provider, and offers both traditional analog video The original video recording method that stores continuous waves of red, green and blue intensities. In analog video, the number of rows is fixed. There are no real columns, and the maximum detail is determined by the frequency response of the analog system. programming under the Cox Cable brand as well as advanced digital video programming under the Cox Digital Cable brand. Cox provides an array of other communications and entertainment services, including local and long distance telephone under the Cox Digital Telephone brand; high-speed Internet access under the brands Cox High Speed Internet, Road Runner road runner: see cuckoo. Road Runner thrives on outwitting Wile E. Coyote. [Comics: “Beep Beep the Road Runner” in Horn, 105] See : Cunning Road Runner and Cox Express; and commercial voice and data services via Cox Business Services. Cox is an investor in programming networks including Discovery Channel. More information about Cox Communications can be accessed on the Internet at www.cox.com. Conference Call and Webcast Details The Cox Communications earnings call will be held Monday Monday: see week. , April 22, 2002, at 10:30 a.m. Eastern Time. A live webcast of the conference call will be available on the Cox Communications website at www.cox.com/investor. A recording of the conference call will remain on the company's website for two weeks following the conclusion of the call. A document containing highlights from the first quarter can be found in the press room on our website at www.cox.com. Caution Concerning 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. Statements in this release, including statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc growth opportunities, revenue and cash flow projections A Cash Flow Projection is an attempt to forecast the cash flows that will be generated by an asset, often a company, over a specified time frame. Methodology Projections can be made with varying levels of detail, but any cash flow projection for a business entails and introduction of new products and services, are "forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. " statements, which are statements that relate to Cox's future plans, earnings, objectives, expectations, performance and similar projections, as well as any facts or assumptions underlying these statements or projections. Actual results may differ materially from the results 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 these forward-looking statements, due to various risks, uncertainties or other factors. These factors include competition within the broadband 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 achieve anticipated subscriber and revenue growth, our success in implementing new services and other operating initiatives, our ability to generate sufficient cash flow to meet our debt service obligations and finance operations The execution of the joint finance mission to provide financial advice and guidance, support of the procurement process, providing pay support, and providing disbursing support.See also financial management. , and other risk factors described from time to time in Cox's filings with the Securities and Exchange Commission, including Cox's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , for the year ended December 31, 2001. Cox assumes no responsibility to update any forward-looking statements as a result of new information, future events or otherwise.
Cox Communications, Inc.
Pro Forma Operating Results
(Unaudited)
(Thousands of Dollars)
Three Months Ended March 31
------------------------------------------------------
2002 Pro Forma 2002 2001
Historical Adjustments Pro Forma Pro Forma(a) Change
---------- ----------- --------- ----------- ------
Revenues
Residential
Video $833,112 $ - $833,112 $772,901 8%
Data 121,565 - 121,565 73,779 65%
Telephony 73,499 - 73,499 41,248 78%
Other 21,101 - 21,101 20,423 3%
--------- --------- --------- --------- ---------
Total
residential
revenues 1,049,277 - 1,049,277 908,351 16%
Commercial 49,239 - 49,239 31,695 55%
Advertising 79,526 - 79,526 69,687 14%
--------- --------- --------- --------- ---------
Total
revenues 1,178,042 - 1,178,042 1,009,733 17%
Costs and expenses
Programming
costs 263,878 - 263,878 235,131 12%
Selling, general
and
administrative 522,099 (9,761)(b) 512,338 416,470 23%
--------- --------- --------- --------- ---------
Total costs
and
expenses 785,977 (9,761) 776,216 651,601 19%
--------- --------- --------- --------- ---------
Operating cash
flow $392,065 $ 9,761 $401,826 $358,132 12%
========= ========= ========= ========= =========
(a) The pro forma operating results for the three months ended
March 31, 2001 reflect reclassifications of Cox's Excite@Home
high-speed Internet costs of $17.2 million from data revenue and $1.1
million from commercial revenue to selling, general and administrative
expenses to conform to the presentation for the three months ended
March 31, 2002.
(b) Pro forma selling, general and administrative expenses for the
three months ended March 31, 2002 exclude a one-time non-recurring
charge of $9.8 million related to the portion of Cox's December 2001
payment of $160.0 million to Excite@Home for the continuation of
high-speed Internet services through February 2002.
NOTE: Certain amounts in the 2001 financial statements have been
reclassified for comparison purposes.
Cox Communications, Inc.
Consolidated Historical Statements of Operations
(Unaudited)
(Thousands of Dollars, excluding per share data)
Three Months Ended
March 31
--------------------------------
2002 2001 Change
--------- --------- ---------
Revenues
Residential
Video $ 833,112 $ 772,901 8%
Data 121,565 56,566 115%
Telephony 73,499 41,248 78%
Other 21,101 20,423 3%
--------- --------- ---------
Total residential revenues 1,049,277 891,138 18%
Commercial 49,239 30,594 61%
Advertising 79,526 69,687 14%
--------- --------- ---------
Total revenues 1,178,042 991,419 19%
Costs and expenses
Programming costs 263,878 235,131 12%
Selling, general and
administrative 522,099 398,156 31%
--------- --------- ---------
Total costs and expenses 785,977 633,287 24%
--------- --------- ---------
Operating cash flow 392,065 358,132 9%
Depreciation 325,593 259,611 25%
Amortization 199 92,614 (100%)
--------- --------- ---------
Operating income 66,273 5,907 -
Interest expense (127,617) (153,853) (17%)
Gain (loss) on derivative
instruments, net 719,763 (7,012) -
Equity in net losses of affiliated
companies (2,813) (5,819) (52%)
Gain (loss) on investments, net (408,730) 158,895 -
Other, net 735 (398) -
--------- --------- ---------
Income (loss) before income taxes,
minority interest and cumulative
effect of change in accounting
principle 247,611 (2,280) -
Income tax expense 99,970 11,807 -
--------- --------- ---------
Income (loss) before minority
interest and cumulative effect
of change in accounting principle 147,641 (14,087) -
Minority interest, net of tax (12,069) (16,399) (26%)
--------- --------- ---------
Income (loss) before cumulative
effect of change in accounting
principle 135,572 (30,486) -
--------- --------- ---------
Cumulative effect of change
in accounting principle,
net of tax - 717,090 (100%)
--------- --------- ---------
Net income $ 135,572 $ 686,604 (80%)
========= ========= =========
Historical basic net income
per share $ 0.23 $ 1.14
Historical diluted net income
per share 0.22 1.14
NOTE: Certain amounts in the 2001 financial statements have been
reclassified for comparison purposes.
Cox Communications, Inc.
Consolidated Balance Sheets
(Unaudited)
(Thousands of Dollars)
March 31 December 31
2002 2001
-------------- --------------
Assets
Cash $ 135,094 $ 86,860
Accounts and notes receivable, less
allowance for doubtful accounts of
$33,652 and $33,514 373,544 421,111
Net plant and equipment 7,309,441 7,127,908
Investments 849,291 3,515,233
Intangible assets 13,513,786 13,510,894
Amounts due from Cox Enterprises, Inc. 245,287 13,245
Other assets 348,311 386,185
-------------- --------------
Total assets $ 22,774,754 $ 25,061,436
============== ==============
Liabilities and shareholders' equity
Accounts payable and accrued expenses $ 697,853 $ 674,426
Deferred income taxes 4,222,280 4,538,288
Other liabilities 536,546 470,397
Debt 6,931,384 8,417,675
-------------- --------------
Total liabilities 12,388,063 14,100,786
-------------- --------------
Minority interest in equity of
consolidated subsidiaries 130,436 129,121
Cox-obligated capital and preferred
securities of subsidiary trusts 1,156,138 1,155,738
Shareholders' equity
Series A preferred stock - liquidation
preference of $22.1375 per share,
$1 par value; 10,000,000 shares of
preferred stock authorized; shares
issued and outstanding: 4,836,372 4,836 4,836
Class A common stock, $1 par value;
671,000,000 shares authorized; shares
issued: 578,643,923 and 578,493,107;
shares outstanding:
573,134,786 and 572,994,707 578,644 578,493
Class C common stock, $1 par value;
62,000,000 shares authorized; shares
issued and outstanding: 27,597,792 27,598 27,598
Additional paid-in capital 3,894,795 3,891,157
Retained earnings 5,048,033 4,912,461
Accumulated other comprehensive income
(loss) (241,452) 473,135
Class A common stock in treasury, at
cost: 5,509,137 shares (212,337) (211,889)
-------------- --------------
Total shareholders' equity 9,100,117 9,675,791
-------------- --------------
Total liabilities and shareholders'
equity $ 22,774,754 $ 25,061,436
============== ==============
Cox Communications, Inc.
Summary of Operating Statistics
----------------------------------------------------------------------
Core Video
----------
March 31 December 31 March 31
2001 2001 2002
-------------------------------------------
Revenue Generating Units
Basic Customers 6,213,994 6,237,888 6,292,093
New Services 1,839,907 2,723,173 3,059,199
-------------------------------------------
Total Revenue Generating
Units 8,053,901 8,961,061 9,351,292
Homes Passed 9,843,052 9,979,207 10,053,522
Basic Penetration 63.1% 62.5% 62.6%
----------------------------------------------------------------------
Cox Digital Cable
-----------------
March 31 December 31 March 31
2001 2001 2002
-------------------------------------------
Digital Cable Ready
Homes Passed 8,119,305 9,258,310 9,517,070
Customers 960,507 1,386,039 1,541,587
Penetration of Customers
to Basic Customers 15.5% 22.2% 24.5%
Average Weekly Run Rate 9,135 12,156 11,965
----------------------------------------------------------------------
High-Speed Internet Access
--------------------------
March 31 December 31 March 31
2001 2001 2002
-------------------------------------------
High-Speed Internet
Access Ready
Homes Passed 7,756,393 9,057,020 9,347,583
Customers 587,170 883,562 1,001,311
Penetration of Customers
to Homes Passed 7.6% 9.8% 10.7%
Average Weekly Run Rate 8,094 8,005 9,058
----------------------------------------------------------------------
Cox Digital Telephone
---------------------
March 31 December 31 March 31
2001 2001 2002
-------------------------------------------
Telephony Ready Homes
Passed 2,644,390 3,338,097 3,569,212
Customers 292,230 453,572 516,301
Penetration of Customers
to Homes Passed 11.1% 13.6% 14.5%
Average Weekly Run Rate 3,660 4,212 4,825
----------------------------------------------------------------------
Bundled Customers
-----------------
March 31 December 31 March 31
2001 2001 2002
-------------------------------------------
Customers subscribing to
two or more services 743,525 1,079,421 1,214,962
Penetration of Bundled
Customers to Basic
Customers 12.0% 17.3% 19.3%
----------------------------------------------------------------------
Comparative Quarterly Operating Statistics
------------------------------------------
Three Months Ended
-----------------------------
March 31 March 31
2001 2002
-------------- -------------
Pro Forma Operating Cash Flow Margin(a) 35.5% 34.1%
Pro Forma Operating Cash Flow per
Basic Customer(a) $ 57.63 $ 63.86
Capital Expenditures
(thousands of dollars) $ 523,314 $ 515,398
Capital Expenditures per Basic Customer $ 84.22 $ 81.91
----------------------------------------------------------------------
(a) Please refer to the Pro Forma Operating Results for details
related to the nature of the pro forma adjustments.
Cox Communications, Inc.
Quarterly Pro Forma Operating Results
(Unaudited)
(Thousands of Dollars)
2001 Pro Forma
-------------------------------------- Twelve Months
Pro Forma Three Months Ended (a) Ended
-------------------------------------- December 31
March 31 June 30 Sept. 30 Dec. 31 2001 (a)
-------- ------- -------- ------- ------------
Revenues
Residential
Video $772,901 $793,724 $799,543 $815,730 $3,181,898
Data 73,779 82,100 97,900 118,030(b) 371,809(b)
Telephony 41,248 49,066 57,635 66,343 214,292
Other 20,423 20,683 20,393 25,731(c) 87,230(c)
-------- -------- -------- -------- ----------
Total
residential
revenues 908,351 945,573 975,471 1,025,834 3,855,229
Commercial 31,695 36,785 39,549 41,789 149,818
Advertising 69,687 86,986 88,628 92,278 337,579
-------- -------- -------- -------- ----------
Total
revenues 1,009,733 1,069,344 1,103,648 1,159,901 4,342,626
Costs and expenses
Programming
costs 235,131 239,080 239,875 246,999 961,085
Selling,
general and
administra-
tive 416,470 448,150 467,514 480,438(d) 1,812,572(d)
-------- -------- -------- -------- ----------
Total costs and
expenses 651,601 687,230 707,389 727,437 2,773,657
-------- -------- -------- -------- ----------
Operating cash
flow $358,132 $382,114 $396,259 $432,464 $1,568,969
======== ======== ======== ======== ==========
(a) The pro forma operating results for the each of the quarters
and the year ended December 31, 2001 reflect reclassifications of
Cox's Excite@Home high-speed Internet costs of approximately $17.2
million, $19.8 million, $22.7 million and $26.4 million, respectively,
from data revenue and $1.1 million, $1.5 million, $1.4 million and
$1.5 million, respectively, from commercial revenue to selling,
general and administrative expenses to conform to the presentation for
the year ending December 31, 2002.
(b) Pro forma data revenues exclude a one-time payment in excess
of Excite@Home's original contractual fees of approximately $7.8
million to Excite@Home for the continuation of high-speed Internet
services for October and November.
(c) Pro forma other revenues exclude a one-time gain of
approximately $10.0 million related to the reversal of certain
deferred amounts resulting from Cox's transition to Cox High Speed
Internet service.
(d) Pro forma selling, general and administrative expenses exclude
a one-time non-recurring net charge of $150.2 million, related to the
December 2001 payment of $160.0 million to Excite@Home for the
continuation of high-speed Internet services through February 2002,
net of the portion of that payment attributable to services provided,
and hence recognized, in January and February 2002.
NOTE: Certain amounts in the 2001 financial statements have been
reclassified for comparison purposes.
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