-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HWCya7jYFtuedRPnbVg7HtiEJPnhp77E85KGU/KqYU0tV5KfPSTPC8CQffEApiXt jPMQZT1qrm8GdvmPuLwvaw== /in/edgar/work/0000020520-00-000026/0000020520-00-000026.txt : 20001116 0000020520-00-000026.hdr.sgml : 20001116 ACCESSION NUMBER: 0000020520-00-000026 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000930 ITEM INFORMATION: FILED AS OF DATE: 20001114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CITIZENS COMMUNICATIONS CO CENTRAL INDEX KEY: 0000020520 STANDARD INDUSTRIAL CLASSIFICATION: [4931 ] IRS NUMBER: 060619596 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-11001 FILM NUMBER: 768510 BUSINESS ADDRESS: STREET 1: HIGH RIDGE PK BLDG 3 STREET 2: P O BOX 3801 CITY: STAMFORD STATE: CT ZIP: 06905 BUSINESS PHONE: 2033298800 MAIL ADDRESS: STREET 1: HIGH RIDGE PARK BLDG NO 3 CITY: STAMFORD STATE: CT ZIP: 06905 FORMER COMPANY: FORMER CONFORMED NAME: CITIZENS UTILITIES CO DATE OF NAME CHANGE: 19920703 8-K 1 0001.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: November 13, 2000 (Date of earliest event reported) CITIZENS COMMUNICATIONS COMPANY (Exact name of Registrant as specified in charter) Delaware 001-11001 06-0619596 (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) 3 High Ridge Park, P.O. Box 3801, Stamford, Connecticut 06905 - ------------------------------------------------------- ----- (Address of principal executive offices) (Zip Code) (203) 614-5600 (Registrant's telephone number, including area code) No change since last report (Former name or address, if changed since last report) Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (c) Exhibits 99.1 Press release of Citizens Communications Company released November 13, 2000 announcing earnings for the quarter ended September 30, 2000. 99.2 Financial and operating data SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CITIZENS COMMUNICATIONS COMPANY Registrant By: /s/ Robert J. Larson ----------------------------- Robert J. Larson Vice President and Chief Accounting Officer Date: November 14, 2000 EX-99.1 2 0002.txt PRESS RELEASE ANNOUNCING THIRD QUARTER RESULTS Citizens Communications 3 High Ridge Park Stamford, CT 06905 203.614.5600 Web site: www.czn.net - -------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE Contact: Brigid M. Smith, Assistant Vice President Corporate Communications (203) 614-5042 bsmith@czn.com CITIZENS COMMUNICATIONS REPORTS FINANCIAL RESULTS FOR THE THIRD QUARTER OF 2000 November 13, 2000 - Citizens Communications (NYSE:CZN) today reported financial results for the quarter and nine months ended September 30, 2000. Effective with the third quarter of 2000, the company has reclassified its gas segment as "Assets Held for Sale" and is no longer including them in the results of Discontinued Operations. After giving effect to the reclassification described above, consolidated third quarter revenue was $389.9 million, an increase of 16 percent above 1999's third quarter consolidated revenue of $337.1 million. The reclassification of the company's gas segment accounted for $80.3 million and $65.6 million of third quarter 2000 and 1999 revenue, respectively. Consolidated earnings before interest, taxes, depreciation and amortization ("EBITDA") was $123.9 million in the third quarter, an increase of $35.6 million or 40 percent above the 1999 third quarter EBITDA of $88.3 million. The current and year-ago quarters include $7.9 million and $2.6 million in EBITDA, respectively, from the company's gas segment. Third quarter consolidated net income was $1.5 million or 1 cent per share, compared to consolidated net income of $11.9 million or 5 cents per share in the third quarter of 1999. Net income for the nine months ended September 30, 2000 was $11.8 million or 4 cents per share, compared to $74.3 million or 29 cents per share for the nine-month period in 1999. Net income for the year ago period included a $42.9 million gain (net of tax) on the sale of an investment. Compared to the prior year periods, net income for the quarter and nine months ended September 30, 2000 was affected by higher depreciation and amortization expense of $89.1 million and $258.7 million, respectively, as well as higher interest expense of $45.0 million and $116.3 million, respectively. The higher interest expense in both periods was primarily due to increased debt levels at Electric Lightwave. Telecommunications - Incumbent Local Exchange Carrier Segment ("ILEC Segment") Third quarter revenue from the company's ILEC Segment was $246.8 million, up 10 percent from the $223.7 million for the 1999 third quarter. Recently completed acquisitions of approximately 200,000 access lines accounted for $15.6 million or 68 percent of the increase. The remainder is a result of internal growth. ILEC Segment EBITDA for the third quarter was $111.0 million, up 18 percent from $94.2 million in the third quarter of 1999. Third quarter 2000 ILEC Segment EBITDA included $12.5 million of assimilation expense related to the pending acquisitions of telephone access lines. Absent this expense, EBITDA from the company's ILEC Segment increased to $123.5 million, or 31 percent over the prior year period, resulting in an EBITDA margin of 50 percent for the year 2000 third quarter compared to 42 percent in the third quarter of 1999. Competitive Local Exchange Carrier Segment; Electric Lightwave, Inc. (NASDAQ:ELIX) ("ELI-CLEC") Third quarter revenue from ELI-CLEC totaled $63.6 million compared to $48.6 million, an increase of 31 percent over the prior year third quarter. ELI-CLEC third quarter EBITDA was $4.8 million, a $13.7 million improvement over the $8.9 million EBITDA loss for the prior year's third quarter. Commenting on the results, Citizens' chairman and chief executive officer Leonard Tow said, "We are extremely pleased with these results as they represent significant milestones for both Citizens and Electric Lightwave. Citizens has reached its interim target of a 50 percent EBITDA margin at its incumbent local exchange business, and Electric Lightwave has reported its first EBITDA positive quarter. We expect these upward trends to continue as we proceed with our transformation of Citizens into a growing, high-margin business." About Citizens Communications Citizens Communications serves 1.2 million access lines in 16 states. In 1999 and 2000, Citizens agreed to purchase over 2 million additional access lines in 19 states in transactions that began to close in June of 2000. Citizens also owns 86 percent of Electric Lightwave, Inc. (NASDAQ:ELIX), a facilities-based, integrated communications provider that offers a broad range of services to telecommunications-intensive businesses throughout the United States. More information about Citizens can be found at www.czn.net. This document contains forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the statements. These and all forward-looking statements (including oral representations) are only predictions or statements of current plans that are constantly under review by the company. All forward-looking statements may differ from actual results because of, but not limited to, changes in the local and overall economy, changes in market conditions for debt and equity securities, the nature and pace of technological changes, the number and effectiveness of competitors in the company's markets, success in overall strategy, changes in legal or regulatory policy, changes in legislation, the company's ability to identify future markets and successfully expand existing ones, the mix of products and services offered in the company's target markets, the effects of acquisitions and dispositions and the ability to effectively integrate businesses acquired. These important factors should be considered in evaluating any statement contained herein and/or made by the company or on its behalf. The foregoing information should be read in conjunction with the company's filings with the U.S. Securities and Exchange Commission including, but not limited to, reports on Forms 10-K and 10-Q. The company does not intend to update or revise these forward-looking statements to reflect the occurrence of future events or circumstances. (Table to Follow) Citizens Communications Consolidated Financial Data (unaudited)
For the quarter ended For the nine months ended September 30, September 30, --------------------------- -------------------------------- % % (Amounts in thousands - except per-share amounts) 2000 1999 Change 2000 1999 Change --------------------------- -------------------------------- Income Statement Data Revenue from continuing operations (1) $389,941 $337,091 16% $ 1,150,140 $1,048,698 10% Operating income from continuing operations (2) 34,757 18,543 87% 94,067 64,776 45% Income from discontinued operations, net of tax 6,683 8,272 -19% 13,672 13,459 2% Net income (2) 1,467 11,906 -88% 11,804 31,389 -62% EBITDA Data (3) EBITDA from continuing operations before acquisition assimilation expense $136,426 $88,258 55% $ 376,874 $ 267,041 41% EBITDA from continuing operations 123,887 88,258 40% 352,744 267,041 32% EBITDA from discontinued operations 28,837 29,960 -4% 74,691 71,045 5% Total Company EBITDA 152,724 118,218 29% 427,435 338,086 26% Per Share Data (4) Basic net income per share of common stock (2) $ 0.01 $ 0.05 -80% $ 0.04 $ 0.12 -67% EBITDA per share from continuing operations 0.47 0.34 38% 1.34 1.03 30% EBITDA per share from discontinued operations 0.11 0.11 0% 0.28 0.27 4% Total Company EBITDA per share 0.58 0.45 29% 1.62 1.30 25% EBITDA per share from continuing operations before acquisition assimilation expenses 0.52 0.34 52% 1.43 1.03 39% Weighted average shares outstanding 264,749 260,607 2% 263,725 260,118 1%
(1) Continuing operations are comprised of the Company's Telecommunications, its Competitive Local Exchange Carrier (Electric Lightwave, Inc.) and the company's natural gas businesses. The Company still intends to sell the natural gas segment and is continuing to actively pursue a buyer for those gas operations for which it does not yet have signed agreements. The Company is reporting its electric and water/wastewater businesses as discontinued operations. (2) The nine months ended September 30, 1999 excludes the gain on sale of investment of $42.9 million (net of tax). (3) Operating income plus depreciation and amortization. (4) Calculated based on weighted average shares outstanding. EX-99.2 3 0003.txt FINANCIAL AND OPERATING DATA Citizens Communications Company and Subsidiaries Consolidated Financial Data (unaudited)
For the quarter ended For the nine months ended September 30, September 30, ------------------- ----------------------- % % (Amounts in thousands - except per-share amounts) 2000 1999 Change 2000 1999 Change -------------------------- ------------------------------ Income Statement Data Continuing operations (1) Revenue $ 389,941 $337,091 16% $ 1,150,140 $1,038,284 11% Revenue-Universal service fund settlement - - - - 10,414 - Network access expense 25,130 20,366 23% 81,926 84,945 -4% Cost of services (gas purchased) 48,182 31,152 55% 148,238 116,706 27% Depreciation and amortization 89,130 69,715 28% 258,677 202,265 28% Other operating expenses 180,203 197,315 -9% 543,102 580,006 -6% Acquisition assimilation expenses 12,539 - - 24,130 - - Operating income 34,757 18,543 87% 94,067 64,776 45% Investment and other income, net 5,435 9,703 -44% 15,086 21,517 -30% Minority interest - 5,301 -100% 12,222 16,987 -28% Interest expense 45,025 27,319 65% 116,288 74,560 56% Gain on sale of investments, net of tax (2) - - - - 42,895 n/a Income tax expense (benefit) (1,170) 1,041 -212% 2,298 6,133 n/a Convertible preferred dividends 1,553 1,553 - 4,657 4,657 - Income (loss) from continuing operations (5,216) 3,634 n/a (1,868) 60,825 n/a Income (loss) from continuing operations excluding gain on sale of investments (5,216) 3,634 n/a (1,868) 17,930 n/a Income from discontinued operations, net of tax 6,683 8,272 -19% 13,672 13,459 2% Net income 1,467 11,906 -88% 11,804 74,284 -84% Net income excluding gain on sale of investments 1,467 11,906 -88% 11,804 31,389 -62% EBITDA and Capital Expenditure Data(3) EBITDA from continuing operations $ 123,887 $ 88,258 40% $ 352,744 $ 267,041 32% EBITDA from discontinued operations 28,837 29,960 -4% 74,691 71,045 5% Total Company EBITDA 152,724 118,218 29% 427,435 338,086 26% EBITDA from continuing operations before acquisition assimi1ation expenses 136,426 88,258 55% 376,874 267,041 41% Capital expenditures from continuing operations 104,469 95,960 9% 442,813 351,635 26% Capital expenditures from assets held for sale 12,281 13,684 -10% 35,211 39,964 -12% Capital expenditures from discontinued operations 42,035 32,225 30% 93,336 43,001 117% Total Company capital expenditures 158,785 141,869 12% 571,360 434,600 31% Balance Sheet Data Cash and investments $ 418,075 $ 577,368 -28% Total assets 6,420,053 5,600,258 15% Net plant (continuing operations) 3,255,120 2,868,608 13% Long-term debt (continuing operations) 2,925,680 2,080,050 41% Equity (4) 2,050,354 2,064,464 -1% Shares of common stock outstanding 264,893 260,820 2% Weighted average shares outstanding 264,749 260,607 2% 263,725 260,118 1% Per-Share Data (5) Basic net income per share of common stock $ 0.01 $ 0.05 -80% $ 0.04 $ 0.29 -86% Basic net income per share of common stock excluding gain on sale of investments 0.01 0.05 -80% 0.04 0.12 -67% EBITDA per share from continuing operations 0.47 0.34 38% 1.34 1.30 30% EBITDA per share from discontinued operations 0.11 0.11 - 0.28 0.27 4% Total Company EBITDA per share 0.58 0.45 29% 1.62 1.30 25% Book value per share 7.01 7.16 -2% Other Financial Data Long-term debt to long-term debt and equity 59% 50% Common equity market capitalization (in billions) $ 3.54 $ 2.95 Equity market capitalization (in billions) (4) $ 3.80 $ 3.15 Market capitalization (in billions) (6) $ 6.33 $ 5.23
(1) The Company's Telecommunications, Electric Lightwave, Inc. (ELI), our Competitive Local Exchange Carrier (CLEC) and the company's natural gas businesses. The Company still intends to sell the natural gas segment and is continuing to actively pursue a buyer for those gas operations for which we do not yet have signed agreements. The Company is reporting its electric and water/wastewater businesses as discontinued operations. Continuing operations reflect the elimination of intercompany transactions (see segment note in the SEC Form 10-Q). (2) Represents a gain of $69.5 million net of $26.6 million of income taxes on the sale of Centennial Cellular stock. (3) Operating income plus depreciation and amortization. (4) Includes convertible preferred securities. (5) Calculated based on weighted average shares outstanding. (6) Equity market capitalization plus long-term debt. Citizens Communications Company and Subsidiaries Financial and Operating Data by Service
For the quarter ended For the nine months ended September 30, September 30, ------------------------------ ----------------------------------- % % (Dollars in thousands, except operating data) 2000 1999 Change 2000 1999 Change ------------------------------ ----------------------------------- Telecommunications Select Income Statement Data Revenue Network access services $ 129,584 $ 123,939 5% $ 375,994 $ 370,600 1% Network access services - USF settlement - - - - 10,414 - Local network services 80,579 69,046 17% 224,284 205,735 9% Long distance and data services 20,481 17,705 16% 58,534 59,096 -1% Directory services 8,016 7,058 14% 22,636 21,017 8% Other 18,003 15,964 13% 51,492 45,725 13% Eliminations (1) (9,896) (10,050) n/a (32,465) (33,072) n/a Total revenue 246,767 223,662 10% 700,475 679,515 3% Network access expense 17,973 16,444 9% 59,676 56,587 5% Depreciation and amortization 65,858 54,821 20% 195,629 161,325 21% Other operating expenses 115,187 123,093 -6% 337,043 379,396 -11% Acquisition assimilation expenses (2) 12,539 - - 24,130 - - Eliminations (1) (9,896) (10,050) n/a (32,465) (33,072) n/a Total expense 201,661 184,308 9% 584,013 564,236 4% Operating income 45,106 39,354 15% 116,462 115,279 1% EBITDA and Capital Expenditure Data EBITDA (3) $ 110,964 $ 94,175 18% $ 312,091 $ 276,604 13% EBITDA margin (4) 45% 42% 7% 45% 41% 10% EBITDA before acquisition assimilation expenses 123,503 94,175 31% 336,221 276,604 22% EBITDA margin before acquisition assimilation expenses 50% 42% 19% 48% 41% 17% Capital expenditures 79,172 65,655 21% 250,016 156,264 60% Balance Sheet Data Total assets $ 3,038,634 $ 2,365,030 28% Net plant 2,339,053 2,120,423 10% Operating Data Access lines 1,223,876 983,222 24% Revenue per access line $ 202 $ 227 -11% $ 572 $ 691 -17% Switched access minutes of use (in millions) 1,454 1,335 9% 4,157 3,852 8% Employees 4,193 3,629 16% Citizens' long distance minutes of use (in millions) 148 142 4% 432 435 -1% Citizens' long distance in-territory customer market share 16% 17%
(1) Eliminations represent network access revenue and network access expense between the Company's local exchange operations and long-distance operations. (2) Represents expenses associated with the pending acquisition of approximately 2 million telephone access lines. (3) Operating income plus depreciation and amortization. (4) EBITDA divided by total revenue. Citizens Communications Company and Subsidiaries Financial and Operating Data by Service
For the quarter ended For the nine months ended September 30, September 30, -------------------------- ----------------------------- % % (Dollars in thousands, except operating data) 2000 1999 Change 2000 1999 Change ------------------------------- ------------------------------- Electric Lightwave, Inc. Select Income Statement Data Revenue Network services $ 21,627 $ 14,024 54% $ 54,804 $ 37,431 46% Local telephone services 25,187 22,313 13% 75,412 55,221 37% Long distance services 3,728 4,812 -23% 12,590 22,587 -44% Data services 13,068 7,453 75% 38,202 17,674 116% Total revenue 63,610 48,602 31% 181,008 132,913 36% Network access expense 17,821 14,719 21% 56,811 63,645 -11% Gross margin 45,789 33,883 35% 124,197 69,268 79% Depreciation and amortization 16,306 9,807 66% 43,782 24,951 75% Other operating expenses 41,013 42,749 -4% 127,521 117,630 8% Total expense 75,140 67,275 12% 228,114 206,226 11% Operating loss (11,530) (18,673) n/a (47,106) (73,313) n/a EBITDA and Capital Expenditure Data EBITDA (1) $ 4,776 $ (8,866) n/a $ (3,324) $ (48,362) n/a Capital expenditures (2) 25,297 30,305 -17% 192,797 195,371 -1% Balance Sheet Data Total assets $ 906,280 $ 726,982 25% Gross plant 1,070,995 831,682 29% Operating Data Access Line Equivalents 203,911 142,433 43% Route miles 5,921 4,047 46% Fiber miles 297,208 214,656 38% Customers 2,915 2,102 39% Buildings connected 850 808 5% Employees 1,156 1,172 -1% Revenue per employee $ 55,026 $ 41,469 33% $ 156,581 $ 113,407 38% ELI public enterprise value (3) $ 1,292,440 $ 1,247,765 4%
(1) Operating income plus depreciation and amortization. (2) Includes capitalized leases. (3) Common equity market capitalization plus net debt. Citizens Communications Company and Subsidiaries Financial and Operating Data by Service
For the quarter ended For the nine months ended September 30, September 30, ------------------------- -------------------------- % % (Dollars in thousands, except operating data 2000 1999 Change 2000 1999 Change ------------------------------ --------------------------------- Gas Sector Select Income Statement Data Revenue Residential distribution $ 28,112 $ 23,293 21% $ 117,534 $ 104,431 13% Commercial distribution 26,897 21,582 25% 94,080 74,818 26% Industrial distribution 18,911 11,948 58% 41,954 35,639 18% Municipal distribution 425 219 94% 2,084 2,137 -2% Total distribution 74,345 57,042 30% 255,652 217,025 18% Transportation 898 870 3% 3,504 5,920 -41% Other 5,089 7,663 -34% 11,596 15,539 -25% Total revenue 80,333 65,574 23% 270,753 238,485 14% Cost of services (gas purchased) 48,182 31,152 55% 148,238 116,706 27% Gross margin 32,151 34,422 -7% 122,515 121,779 1% Depreciation and amortization 6,708 5,087 32% 19,075 15,989 19% Other operating expenses 24,233 31,788 -24% 79,280 84,113 -6% Total expense 79,123 68,027 16% 246,593 216,808 14% Operating income 1,210 (2,453) 149% 24,160 21,677 11% EBITDA and Capital Expenditure Data EBITDA (1) $ 7,918 $ 2,634 201% $ 43,235 $ 37,666 15% Capital expenditures 12,281 13,684 -10% 35,211 39,964 -12% Balance Sheet Data Total assets $ 598,048 $ 557,747 7% Net plant 514,908 476,198 8% Operating Data Customers 467,870 460,592 2% Employees 989 976 1% Customers per employee 473 472 0% Gross margin (net revenue) per employee $ 32,509 $ 35,268 -8% $ 123,878 $ 124,774 -1% Billion Cubic Feet of gas throughput (BCF) 13.2 14.8 -11% 50.9 60.7 -16%
(1) Operating income plus depreciation and amortization. -----END PRIVACY-ENHANCED MESSAGE-----