NYNEX ACHIEVES RECORD EARNINGS GROWTH FOR SECOND CONSECUTIVE YEAR; First Back-to-Back Years With Double-Digit EPS Growth.NEW YORK--(BUSINESS WIRE)--January 21, 1997--NYNEX Corporation (NYSE NYSE See: New York Stock Exchange :NYN NYN New York News ) today announced its second consecutive year of double-digit earnings growth, with net income for 1996 increasing 12.7 percent to $1.6 billion. Earnings per share for the year of $3.60 were up 10.1 percent compared to $3.27 per share in 1995. Consolidated annual revenues increased 4.1 percent to $13.5 billion, as access lines grew at the strongest pace in the company's history and other business volumes increased at unprecedented rates. In addition, Bell Atlantic NYNEX NYNEX New York-New England & X for the Unknown (Telephone Company) NYNEX New York Network Exchange Mobile (BANM BANM Bell Atlantic Nynex Mobile BANM British Approved Name Modified (drug names) BANM British Academy of New Music (London, UK) ) revenues, which are not consolidated, grew 29.2 percent. Total corporate revenues (which include NYNEX's share of revenues from BANM and other unconsolidated businesses) grew 5.8 percent for the year. Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: for the year expanded 0.9 percentage points to 22.3 percent, and 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. grew to $3.0 billion, up 8.4 percent over 1995. "NYNEX had another outstanding year, with our second consecutive double-digit increase in earnings per share -- a first in our corporation's 12-year history," said NYNEX Chairman and Chief Executive Officer Ivan Seidenberg Ivan G. Seidenberg (born December 10, 1946) is the CEO of Verizon Communications. As chairman and chief executive officer of Verizon Communications Inc., formerly Bell Atlantic and previously NYNEX, Seidenberg steered those companies through two of the largest . "1996 was an historic year for our progress and our growth. The framework of the local exchange business was changed forever by the Telecommunications Act There are several laws named the Telecommunications Act
"Throughout these extraordinary changes, we drove top-line growth, met our goals for productivity improvement and sustained our double-digit performance of the previous year. At the same time, by taking aggressive actions, we finished 1996 with significantly improved service results and positioned ourselves to resume the marketing of value-added services A value-added service (VAS) is a telecommunications industry term for non-core services or, in short, all services beyond standard voice calls and fax transmissions. and accelerate revenue growth per access line. "We also made solid progress in new business ventures. BANM had its second year of million-plus customer growth, and PrimeCo 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. got off to a rapid start. And we will soon begin the regulatory process for approval to offer long distance service in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of . "Our major overseas investments all passed major milestones. With TelecomAsia and BayanTel completing their initial network projects and Excelcomindo launching cellular services, all three are now aggressively adding customers. FLAG completed nearly 40 percent of its undersea cable project. In the UK, NYNEX CableComms turned cash-flow positive in the second half of the year, and we reached agreement with Cable & Wireless and Bell Canada Bell Canada Enterprises (TSX: BCE, NYSE: BCE), legally BCE Inc., is a major Canadian telecommunications company. Through its subsidiaries including Bell Canada, Bell Aliant, Northwestel, Télébec, and NorthernTel, it is the incumbent local exchange carrier for International to create what will be the UK's first provider of fully integrated communications, entertainment and information services See Information Systems. , Cable & Wireless Communications wireless communications System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. . "We made excellent progress in 1996 toward meeting all of our long-term targets, and we're looking forward to completing reviews and closing our merger with Bell Atlantic in the first quarter. NYNEX has generated real momentum, and by bringing that momentum into the new Bell Atlantic we will accelerate the delivery of value to our customers, our shareholders, and our employees." Fourth quarter net income increased 10.0 percent to $416.5 million, compared to $378.7 million in the fourth quarter of 1995. The quarter was NYNEX's seventh consecutive quarter of double-digit net income growth. Earnings per share were $0.95, up 8.0 percent over the fourth quarter of 1995. Consolidated revenue growth of 0.9 percent was affected by the one-time effects of a change in accounting for directory revenues, the assessment of prior-period service rebates, and the decision not to stimulate certain markets while service improvement efforts were under way. Other Results Of Operations -- Telecommunications annual revenue growth of 3.1 percent over 1995 was driven by strong sales of business and value-added services and increasing network use. Private line revenues grew 11.3 percent for the year, and have now increased for ten consecutive quarters in one of telecommunications' most competitive market segments. Value-added service revenues were up 31.2 percent over 1995. Total access minutes of use grew 10.2 percent, and NYNEX sold more than two and a half million new calling plans in New York and Massachusetts. -- Worldwide, NYNEX access lines (including NYNEX's share of its unconsolidated ventures) grew 4.7 percent over 1995. In the northeastern U.S., NYNEX enjoyed its second consecutive year of record-breaking growth, as the number of lines in service increased 3.5 percent to 17.7 million. At NYNEX's overseas operations in the United Kingdom, Thailand and the Philippines, access lines grew by more than 62 percent. -- Worldwide cellular operations sustained their rapid growth. BANM added more than a million customers in 1996 and ended the year with more than 4.4 million, a 31.4 percent increase over 1995. In Greece and Indonesia, NYNEX'S cellular partnerships nearly doubled the number of customers. -- Cable television subscriber growth at NYNEX CableComms was up more than 36 percent over 1995, as new marketing programs increased the number of customers to 268,500 and drove penetration above 20 percent for the first time. -- In information services, NYNEX Information Resources (1) The data and information assets of an organization, department or unit. See data administration. (2) Another name for the Information Systems (IS) or Information Technology (IT) department. See IT. Company (NIRC NIRC Near Infrared Camera (Keck Observatory) NIRC Ner Israel Rabbinical College NIRC New Iberia Research Center (New Iberia, Louisiana) ) increased the number of Yellow Pages advertisers 2.8 percent over 1995. By year's end, BigYellow(sm), NIRC's leading on-line shopping directory A shopping directory is a web directory style website similar to the Open Directory Project or the Yahoo! Directory with focus on sites that sell products or services, usually referred to as ecommerce websites. , had quadrupled the number of visitors to 800,000 per month and doubled the number of advertisers to 8,000 since its introduction in March. NYNEX is a global communications and media corporation that provides a full range of services in the northeastern United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and high-growth markets around the world, including the United Kingdom, Thailand, Gibraltar, Greece, Indonesia, the Philippines, Poland, Slovakia and the Czech Republic Czech Republic, Czech Česká Republika (2005 est. pop. 10,241,000), republic, 29,677 sq mi (78,864 sq km), central Europe. It is bordered by Slovakia on the east, Austria on the south, Germany on the west, and Poland on the north. . The corporation is a leader in telecommunications, wireless communications, directory publishing and video entertainment and information services. NYNEX news releases are now available on the Internet at http://www.nynex.com. You can also receive fax copies of recent NYNEX news releases, free of charge, 24 hours a day. Call 1-800-331-1214. An automated system will provide you with instructions. -0- ___________________________________________________________________ NYNEX CORPORATION Financial Results (Unaudited) FOURTH QUARTER 1996 ___________________________________________________________________ Reported Adjusted(a) (in millions, except EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. 3 Months Ended 3 Months Ended and percentages) 12/31/96 12/31/95 12/31/96 12/31/95 ------ ------ ------ ------ Operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. $ 3,330.3 $ 3,304.3 $ 3,330.3 $ 3,300.8 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. 2,615.5 2,809.7 2,556.6 2,579.8 Operating income 714.8 494.6 773.7 721.0 Operating margin 21.5% 15.0% 23.2% 21.8% EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become (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. )(2) 1,322.7 1,125.8 1,381.6 1,352.2 EBITDA margin 39.7% 34.1% 41.5% 41.0% Net income 379.7 235.6 416.5 378.7 Earnings per share $0.86 $0.55 $0.95 $0.88 Wghtd. avg. shares outstanding 439.9 431.0 439.9 431.0 (2) EBITDA refers to operating income plus depreciation and amortization. ______________________________________________________________________________ __________________ (a) Results for both quarters adjusted for the effects of the corporation's enhanced pension offer, which was initiated in 1994 as part of a force reduction plan. Fourth quarter 1996 charges, for approximately 900 employees who accepted the pension offer, totaled $36.8 million after taxes, or $0.09 per share. Charges for the fourth quarter of 1995 were $143.1 million after taxes, or $0.33 per share, for approximately 1,800 employees who accepted the pension offer. -0- NYNEX CORPORATION Financial Results (Unaudited) 12 MONTHS 1996 ___________________________________________________________________ Reported Adjusted(a) (in millions, except 12 Months Ended 12 Months Ended EPS and percentages) 12/31/96 12/31/95 12/31/96 12/31/95 ------ ------ ------ ------ Operating revenues $13,453.8 $13,406.9 $13,522.8 $12,993.1 Operating expenses 10,840.9 11,314.7 10,509.1 10,212.4 Operating income 2,612.9 2,092.2 3,013.7 2,780.7 Operating margin 19.4% 15.6% 22.3% 21.4% EBITDA (operating cash flow)(2) 5,112.2 4,659.0 5,513.0 5,296.3 EBITDA margin 38.0% 34.8% 40.8% 40.8% Earnings before extraordinary item and cumulative effect of change in accounting principle 1,346.0 1,069.5 1,574.5 1,396.5 Extraordinary item ----- (2,919.4) ----- ----- Cumulative effect of change in accounting principle 131.0 -- -- -- Net income (loss) 1,477.0 (1,849.9) 1,574.5 1,396.5 Earnings per share before extraordinary item and cumulative effect of change in accounting principle $3.08 $ 2.50 $3.60 $3.27 Earnings (loss) per share $3.38 $(4.34) $3.60 $3.27 Wghtd. avg. shares outstanding 436.9 426.5 436.9 426.5 (2) EBITDA refers to operating income plus depreciation and amortization. ___________________________________________________________________ (a) 1996 results have been adjusted for the effects of the corporation's enhanced pension offer, which was initiated in 1994 as part of a force reduction plan. The total number of employees leaving NYNEX under the terms of the offer through 1998 is expected to be in the range of 19,000 to 20,000. After-tax charges in the range of $1.4 billion are to be recorded as employees accept the offer. Pension charges for 1996 totaled $147.3 million after taxes, or $0.34 per share, for approximately 3,000 employees who accepted the pension offer. 1996 results have also been adjusted for a gain from the cumulative effect of a change in accounting for directory advertising revenues and expenses to reflect revenues and expenses upon publication rather than over the life of the directory; a change in presentation of certain taxes other than income; special charges to meet various legal, regulatory and other obligations and contingencies; and an after-tax gain of $45.8 million, or $0.11 per share, from the sale of NYNEX's interest in Vanstar Corporation. The net effect of these items was a gain of $49.8 million, or $0.12 per share, which when combined with the effects of the enhanced pension offer result in a net charge of $97.5 million or $0.22 per share. 1995 results have been adjusted for pension charges totaling $326.8 million after taxes, or $0.77 per share, for approximately 4,700 employees who accepted the pension offer. 1995 results have also been adjusted for an extraordinary charge resulting from 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 accounting under 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 71; net gains resulting from the sale of certain NYNEX Mobile Communications assets and actuarial ac·tu·ar·y n. pl. ac·tu·ar·ies A statistician who computes insurance risks and premiums. [Latin changes associated with the NYNEX-Bell Atlantic cellular partnership; a gain related to an initial public offering of equity in NYNEX CableComms; a change in presentation of certain taxes other than income, and special charges to meet various tax, benefit and legal obligations and contingencies. The net effect of these items was a charge of $2.9 billion, or $6.84 per share, which when combined with the effects of the enhanced pension offer result in a net charge of $3.2 billion, or $7.61 per share. In addition, since NYNEX's participation in the NYNEX-Bell Atlantic cellular partnership is reported on an equity basis, 1995 revenues and expenses have been adjusted to permit comparison with 1996. CONTACT: NYNEX, New York David Frail, 212/395-0500 |
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