Cox Communications announces second quarter financial results for 1997.ATLANTA--(BUSINESS WIRE)--Aug. 6, 1997--Cox Communications, Inc. (NYSE NYSE See: New York Stock Exchange :COX COX cyclo-oxygenase ) today reported financial results for the three months ended June June: see month. 30, 1997. "Cox's core business continued to perform well in the second quarter, with 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. growth of 10% and customer growth of 2.1% over the same period in 1996," 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 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. . "We continue our commitment to our network upgrades and have made significant progress in the deployment Installing, setting up, testing and running. This military term, which means the placement of troops and equipment in the field, is widely used with computers as an alternate to the word "implementation. of new services. Cox@Home, our high-speed Internet See broadband. access service, is now available in four markets, and we've we've Contraction of we have. we've have launched our first commercial residential phone service. We look forward to continued progress in our deployment of new services during the remainder of the year." QUARTERLY RESULTS FROM OPERATIONS Revenues for the three months ended June 30, 1997 were $401.1 million, a 12% increase over revenues of $357.3 million for the three months ended June 30, 1996. Basic customers were 3,272,380, a 2.1% increase over customers at June 30, 1996 after adjusting for the trades of cable systems during the first quarter of 1997. Complete basic revenues for the second quarter of 1997 increased 8% over the same period in 1996 to $265.8 million due to customer growth and average rate increases implemented generally in the fourth quarter of 1996 of $1.50 per month per customer. These increases are the result of new channel additions and pass-through pass-through n. 1. An opening between two rooms, especially a shelved space between a kitchen and dining room that is used for passing food. 2. A route through which something is permitted to pass. 3. of inflation adjustments. New-product tier revenues grew 42% to $4.9 million as a result of launching these channel offerings in additional systems. Premium service revenues for the quarter were $47.0 million, down $0.8 million compared to the second quarter of 1996. In the current quarter, the average revenue per premium unit increased, resulting in a 3% increase in premium service revenues compared to the first quarter of 1997, and premium units decreased to 1,907,238 at June 30, 1997 due to the completion of the spring 1996 three-for-one promotion. Pay-per-view pay-per-view n. A service offered by cable television companies that allows subscribers to view special programs for an additional charge. pay revenues for the quarter increased 59% over the same period in 1996 to $15.7 million due to the June 1997 Tyson/Holyfield boxing event. Advertising revenues increased 17% to $25.8 million as a result of strong growth in local and national ad sales and Cox's telecasts of the San Diego San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. Padres
Not to be confused with San Diego Padres. major league baseball "MLB" and "Major Leagues" redirect here. For other uses, see MLB (disambiguation) and Major Leagues (disambiguation). Major League Baseball (MLB) is the highest level of play in North American professional baseball. games. Revenues from satellite operations were $29.9 million for the current quarter, a 55% increase over revenues of $19.2 million for the same quarter in 1996 as PrimeStar PrimeStar is a now-defunct U.S. direct broadcast satellite (DBS) organization formed in 1991. PrimeStar was the first DBS system in the United States but slowly declined in popularity with the arrival of DirecTV in 1994 and Dish Network in 1996. customers increased to 150,168 at June 30, 1997 from 88,163 at June 30, 1996. Programming costs were $92.2 million for the second quarter of 1997, an increase of 16% over the same period in 1996 due primarily to Cox's customer growth, January January: see month. 1997 programming rate increases, new channel additions and the Tyson/Holyfield boxing event. Plant operations expenses increased 11% to $38.2 million due to 1997 annual salary increases and additional repair and maintenance costs related to systems acquired in the trades during the first quarter of 1997. Marketing costs decreased 9% to $18.0 million for the second quarter due in part to costs associated with the spring 1996 marketing campaigns. General and administrative expenses for the second quarter of 1997 increased 10% to $77.2 million due to annual salary increases and the increase in direct costs associated with developing and providing high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. data and 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. services. 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: operating cash flow increased 9% to $147.2 million for the second quarter of 1997. Operating cash flow for the core video business, which excludes satellite and Fibernet operations and $4.0 million of direct costs associated with data and telephony services, grew 10% to $148.4 million compared to the second quarter of 1996. The consolidated operating cash flow margin (operating cash flow as a percentage of revenues) for the current quarter was 36.7%, a decrease from 38.0% for the second quarter of 1996, due to the increased data and telephony direct costs. The core video business operating cash flow margin was 40.4% for the quarter, a slight increase over the second quarter of 1996 and in line with Cox's expectations for the year. Depreciation was $85.3 million for the second quarter of 1997, a 35% increase compared to the same period in 1996 due to the continued upgrade and rebuild of the 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. Amortization increased 8% to $19.0 million for the current quarter as a result of additional goodwill resulting from the trades of cable systems during the first quarter of 1997. 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. for the second quarter of 1997 was $43.0 million, a decrease of 22% compared to the same period in 1996. Interest expense increased $15.9 million to $50.2 million for the second quarter of 1997 due to the discontinuance Cessation; ending; giving up. The discontinuance of a lawsuit, also known as a dismissal or a non-suit, is the voluntary or involuntary termination of an action. DISCONTINUANCE, pleading. A chasm or interruption in the pleading. 2. of capitalizing interest resulting from the launch of services by Cox's 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. investments. Equity in net losses of affiliated companies Affiliated Companies A situation that occurs when one company owns a minority interest (less than 50%) in another company. Also refers to companies that are related to each other in some way. Notes: An affiliated company is sometimes referred to as a subsidiary. was $81.8 million, a $53.0 million increase over the prior year due to the losses associated with Sprint PCS, Cox PCS and Teleport Verb 1. teleport - transport by dematerializing at one point and assembling at another science fiction - literary fantasy involving the imagined impact of science on society transport - move something or somebody around; usually over long distances . A pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta gain of $190.8 million was recognized in the second quarter of 1997 primarily as a result of the transfer of Cox's interest in UK Gold and UK Living to Flextech plc, for which Cox received shares representing a 12.6% interest of Flextech plc. Net income for the current quarter was $61.2 million as compared to net income of $27.0 million for the second quarter of 1996. YEAR-TO-DATE Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. RESULTS FROM OPERATIONS Revenues for the six months ended June 30, 1997 were $784.2 million, a 10% increase over revenues of $714.8 million for the comparable period of 1996. Operating cash flow for the first six months of 1997 was $286.8 million, a 5% increase as compared to $272.0 million for the first six months of 1996. Operating income for the six months ended June 30, 1997 was $92.6 million, a 21% decrease from the comparable period of 1996. Interest expense increased $28.2 million to $97.0 million due to the discontinuance of capitalizing interest resulting from the launch of services by Cox's PCS investments. Equity in net losses of affiliated companies increased $115.0 million due to the losses associated with Sprint PCS, Cox PCS and Teleport. A pre-tax gain on sale of affiliated companies of $190.8 was recognized in the second quarter of 1997 primarily as a result of the transfer of Cox's interest in UK Gold and UK Living to Flextech plc. Net income for the six months ended June 30, 1997 was $23.3 million as compared to net income of $34.3 million for the six months ended June 30, 1996. INVESTING ACTIVITIES Cash flows used in investing activities were $663.9 million for the first six months of 1997. Capital expenditures of $361.9 million included the continued upgrade and rebuild of Cox's broadband network and the purchase of PrimeStar customer equipment. Investments made in affiliated companies of $251.5 million included additional equity funding Equity funding An investment consisting of a life insurance policy and a mutual fund. The insurance policy is paid by the collateral value of fund shares, giving the investor the advantages of insurance protection with the growth potential of a mutual fund. of $230.6 million to Sprint PCS, Cox PCS and other telephony investments and $20.9 million to PrimeStar Partners, Outdoor Life, Speedvision and other interests. Payments for exchanges of cable systems of $53.4 million were made for the trades closed during the first quarter of 1997. 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. is among the nation's largest cable television operators, serving some 3.3 million customers. As a full service provider of telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. products, Cox has interests in wired telecommunications, including cable television and telephone services; wireless telecommunications, including personal communications services See PCS. (PCS) via Sprint PCS, direct-to-home See DTH. (DTH (Direct-To-Home) Typically refers to satellite TV broadcasting directly to a dish antenna on the roof of a house. See DBS. ) satellite television via PrimeStar, and programming networks including The Discovery Channel. Cox was distinguished for achieving the highest overall customer satisfaction among cable television users in the first study of the cable industry by J.D. Power and Associates. More information on Cox Communications can be found on the 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 at www.cox.com . -0-
Cox Communications, Inc.
Consolidated Statements of Operations
(Unaudited)
(Thousands of Dollars)
Three Months Ended Six Months Ended
June 30 June 30
------------------- ------------------
1997 1996 % 1997 1996 %
Revenues:
Complete basic $265,837 $ 246,489 8% $528,915 $494,120 7%
New product tier 4,852 3,405 42% 9,637 6,609 46%
Premium service 47,036 47,827 (2%) 92,755 95,458 (3%)
Pay-per-view 15,703 9,860 59% 26,675 22,780 17%
Advertising 25,815 22,061 17% 47,088 42,578 11%
Satellite 29,884 19,247 55% 55,750 36,895 51%
Other 11,971 8,446 42% 23,388 16,393 43%
Total revenues 401,098 357,335 12% 784,208 714,833 10%
Costs and expenses:
Programming costs 92,209 79,392 16% 180,732 162,139 11%
Plant operations 38,190 34,467 11% 76,301 69,278 10%
Marketing 17,989 19,873 (9%) 35,809 38,141 (6%)
General and
administrative 77,205 70,403 10% 151,952 140,089 8%
Satellite
operating and
administrative 28,265 17,551 61% 52,612 33,206 58%
Operating cash flow 147,240 135,649 9% 286,802 271,980 5%
Depreciation 85,296 63,220 35% 158,143 119,082 33%
Amortization 18,978 17,592 8% 36,027 36,092 -
Operating income 42,966 54,837 (22%) 92,632 116,806 (21%)
Interest expense (50,170) (34,301) 46% (96,986) (68,806) 41%
Equity in net losses
of affiliated
companies (81,827) (28,811) 184% (163,108) (48,068) -
Gain on exchanges of
cable systems -- -- -- 24,642 -- -
Gain on issuance of
stock by affiliated
companies -- 50,100 (100%) -- 50,100(100%)
Gain on sale of
affiliated
companies 190,844 -- -- 193,780 4,640 --
Other, net (907) 5,124 (118%) 3,093 9,881 --
Income before
income taxes 100,906 46,949 115% 54,053 64,553 (16%)
Income taxes 39,742 19,985 99% 30,711 30,232 2%
Net income $ 61,164 $ 26,964 127% $ 23,342 $ 34,321 (32%)
Net income
per share $ 0.23 $ 0.10 $ 0.09 $ 0.13
NOTE: Certain amounts in the 1996 financial statements have been
reclassified for comparison purposes.
Cox Communications, Inc.
Consolidated Balance Sheets
(Unaudited)
(Thousands of Dollars)
June 30 Dec. 31
1997 1996
-------- --------
Assets
Cash $78,444 $42,349
Accounts and notes receivable,
less allowance for doubtful
accounts of $7,904 and $7,778 123,162 122,574
Net plant and equipment 1,789,658 1,531,811
Investments 1,411,880 1,219,082
Intangible assets 2,560,554 2,728,955
Other assets 129,815 139,819
Total assets $6,093,513 $5,784,590
Liabilities and shareholders' equity
Accounts payable and accrued expenses $211,485 $220,859
Deferred income 31,012 29,440
Deferred income taxes 337,048 294,453
Other liabilities 157,672 97,526
Debt 3,100,688 2,823,853
Amounts due to Cox Enterprises, Inc. -- 57,147
Total liabilities 3,837,905 3,523,278
Shareholders' equity:
Preferred stock, $1 par value; 5,000,000
shares authorized; none issued -- --
Class A Common stock, $1 par value;
286,000,000 shares authorized; shares
issued and outstanding: 256,541,556
and 256,463,651 256,541 256,464
Class C Common stock, $1 par value;
14,000,000 shares authorized; shares
issued and outstanding: 13,798,896 13,799 13,799
Additional paid-in capital 1,781,976 1,742,121
Retained earnings 239,439 216,097
Foreign currency translation adjustment 16,311 23,424
Net unrealized gain (loss) on securities (52,458) 9,407
Total shareholders' equity 2,255,608 2,261,312
Total liabilities and shareholders'
equity $6,093,513 $5,784,590
Cox Communications, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
(Thousands of Dollars)
Six Months Ended
June 30
-----------------
1997 1996
-------- -------
Cash flows from operating activities
Net income $ 23,342 $ 34,321
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 158,143 119,082
Amortization 36,027 36,092
Equity in net losses of affiliated
companies 163,108 48,068
Deferred income taxes (19,219) (61,987)
Gain on issuance of stock by
affiliated companies -- (50,100)
Gain on exchange of cable systems (24,642) --
Gain on sale of affiliated companies (193,780) (4,640)
(Increase) decrease in accounts
and notes receivable (1,672) 11,192
Decrease in accounts payable
and accrued expenses (36,811) (44,580)
Increase in taxes payable 85,032 36,378
Other, net (11,249) (3,832)
Net cash provided by operating activities 178,279 119,994
Cash flows from investing activities
Capital expenditures (361,855) (256,809)
Investments in affiliated companies (251,494) (148,750)
Proceeds from sale of affiliated companies 6,983 --
Payments for exchanges of cable systems (53,442) --
Proceeds from sale of businesses -- 201,791
Other, net (4,059) 353
Net cash used in investing activities (663,867) (203,415)
Cash flows from financing activities
Short-term debt borrowings, net 400,000 209,221
Commercial paper repayments, net (20,239) --
Proceeds from issuance of debt 150,000 --
Repayment of debt (7,113) (3,190)
Proceeds from exercise of stock options 1,312 907
Increase (decrease) in amounts due to Cox
Enterprises, Inc. (35,120) (91,496)
Increase (decrease) in book overdrafts 32,843 (27,797)
Net cash provided by
financing activities 521,683 87,645
Net increase in cash 36,095 4,224
Cash at beginning of period 42,349 39,166
Cash at end of period $ 78,444 $ 43,390
Cox Communications, Inc.
Summary of Operating Statistics and Investments
Operating Statistics - U.S. Broadband Distribution
June 30 March 31 June 30
1996 1997 1997
Homes Passed 4,976,494 5,051,963 5,085,167
Basic Customers (Pro Forma)(a) 3,204,188 3,275,267 3,272,380
Basic Customers 3,216,993 3,275,267 3,272,380
Basic Penetration 64.6% 64.8% 64.4%
Premium Service Units 2,149,196 1,999,568 1,907,238
Premium Penetration 66.8% 61.1% 58.3%
PrimeStar Customers 88,163 145,040 150,168
Operating Cash Flow Margins
(for the quarter ended):
Consolidated 38.0% 36.4% 36.7%
Core Video Operations(b) 39.6% 39.6% 40.4%
Ratio of Debt to Annualized
Operating Cash Flow 5.0x 5.2x 5.2x
(a) Reflects the trades of cable systems in the first quarter of
1997.
(b) Excludes satellite, Fibernet and direct costs of telephony &
data services.
U.S. Broadband International Broadband
Distribution Investments Distribution Investments
3.3 million customers 100.0% TeleWest Communications
plc 14.6%
168,361 customers in TWC
Cable Partners 50.0%
Telecommunications and Technology Investments
Cox Communications PCS, L.P. 40.0% At Home Corporation 12.4%
PhillieCo, L.P. 17.6% Gemstar International 2.8%
Sprint Spectrum 15.0% National Cable
Teleport Communications Group, Communications 12.5%
Inc. 24.4% PrimeStar Partners 10.4%
Syntellect 8.5%
U.S. Programming International Programming
Investments Investments
Digital Cable Radio 13.6% European Channel
Discovery Communications 24.6% Management 10.0%
E! Entertainment 10.4% Flextech plc 12.6%
Outdoor Life Network 41.0% GEMS 50.0%
Product Information Network 45.0%
Speedvision Network 39.0%
The Sunshine Network 5.3%
Viewer's Choice 20.0%
CONTACT: Cox Communications, Inc., Atlanta Atlanta (ətlăn`tə, ăt–), city (1990 pop. 394,017), state capital and seat of Fulton co., NW Ga., on the Chattahoochee R. and Peachtree Creek, near the Appalachian foothills; inc. 1847. Analysts and Investors: Dallas Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. Clement Clement, in the Bible Clement, in Philippians, one of Paul's coworkers. He is traditionally identified with St. Clement of Rome, the likely author of a letter written from there to the Corinthian church in c.A.D. 96. , Treasurer TREASURER. An officer entrusted with the treasures or money either of a private individual, a corporation, a company, or a state. 2. It is his duty to use ordinary diligence in the performance of his office, and to account with those whose money he has. (404) 843-5677 or Financial and Trade Press: Anthony Surratt Manager of Communications (404) 843-5124 |
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