-----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, UtQL12QF6kCxPdA6qzKKtW+5WU20Thv16g110OkZWsCEOF7AI0t5zp7th648hHTJ FKk8yyrrBOZP9fWyQcSq+A== 0000020520-03-000001.txt : 20030304 0000020520-03-000001.hdr.sgml : 20030304 20030304120349 ACCESSION NUMBER: 0000020520-03-000001 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20021231 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030304 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CITIZENS COMMUNICATIONS CO CENTRAL INDEX KEY: 0000020520 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC & OTHER SERVICES COMBINED [4931] IRS NUMBER: 060619596 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11001 FILM NUMBER: 03590723 BUSINESS ADDRESS: STREET 1: HIGH RIDGE PK BLDG 3 CITY: STAMFORD STATE: CT ZIP: 06905 BUSINESS PHONE: 2036145600 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 analsched.txt ANALYST SCHEDULES 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 (date of earliest event reported): March 4, 2003 CITIZENS COMMUNICATIONS COMPANY (Exact name of registrant as specified in its charter) Delaware 001-11001 06-0619596 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 3 High Ridge Park Stamford, Connecticut 06905 (Address of Principal Executive Offices) (203) 614-5600 (Registrant's Telephone Number, Including Area Code) No Change Since Last Report --------------------------- (Former name or former address, if changed since last report) ITEM 7. Financial Statements, Exhibits (c) Exhibits 99.1 Press Release of Citizens Communications Company released March 4, 2003 announcing earnings for the quarter and year ended December 31, 2002. 99.2 Financial and operating data SIGNATURE 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 thereunto duly authorized. CITIZENS COMMUNICATIONS COMPANY (Registrant) By: /s/ Robert J. Larson -------------------------------- Robert J. Larson Senior Vice President and Chief Accounting Officer Date: March 4, 2003 Exhibit 99.1 Citizens Communications 3 High Ridge Park Stamford, CT 06905 203.614.5600 Web site: www.czn.net FOR IMMEDIATE RELEASE Contacts: Brigid M. Smith Michael A. Zarrella Assistant Vice President Vice President Corporate Communications Corporate Development 203.614.5042 203.614.5179 bsmith@czn.com mzarrell@czn.com Citizens Communications Reports 2002 Fourth-Quarter Results Stamford, Conn., Mar. 4, 2003 - Citizens Communications (NYSE:CZN) today reported revenues of $520 million from its ILEC operations for the quarter ended Dec. 31, 2002. The ILEC segment produced adjusted EBITDA of $278 million and had capital expenditures of $83 million for the quarter. The company produced free cash flow of $333 million for the full year 2002 and achieved a net debt to annualized Adjusted EBITDA ratio for the fourth quarter of 3.9x, surpassing the targeted year-end ratio. The company prepaid $344 million of debt during the quarter and repaid $1.06 billion (or 16 percent) of its debt during the year, and ended the quarter with over $393 million in cash. The company remains focused on and committed to the continuing improvement of its balance sheet through the generation of free cash flow applied to further debt reduction. In addition, the sale of the company's Arizona Electric and Gas divisions for $230 million in cash and the sale of The Gas Company of Hawaii division for $115 million in cash are expected to close during the second half of 2003. The net proceeds from these sales will be used to further reduce debt. For the fourth quarter 2002 consolidated results were revenues of $659 million; operating income of $99 million; capital expenditures of $115 million; free cash flow of $71 million; and the net loss was $24 million. During the fourth quarter the company also reduced stockholders' equity by $112 million as a result of certain pension matters previously disclosed. After giving effect to this reduction the company's "net worth" as calculated pursuant to certain debt agreements was $1.83 billion at Dec. 31, 2002. Telecommunications Fourth quarter 2002 revenue from the company's ILEC operations was $520.4 million, up $9.7 million or 2 percent from $510.7 million in the fourth quarter of 2001, primarily due to continued increases in penetration of data, enhanced service and long-distance products, sales of special access services and increased subsidies. For the full year, revenue from the company's ILEC operations was $2.063 billion, up $468.9 million, or 29 percent. ILEC operating income for the fourth quarter was $89.2 million, up $56.2 million, or 170 percent from the fourth quarter of 2001, and for the full year was $413 million compared to $221 million in 2001. Adjusted EBITDA for the fourth quarter of 2002 was $278 million, an increase of $24 million or 10 percent compared to the prior year quarter. Adjusted EBITDA margin for the fourth-quarter of 2002 increased to 53.5 percent from 49.7 percent in the fourth quarter of 2001, reflecting increases in high-margin revenues, an ongoing focus on increased productivity and the efficiencies achieved from consolidation of the company's activities. Adjusted EBITDA for the full year 2002 was $1.097 billion, an increase of $294 million or 37 percent from the prior year. Capital expenditures for the ILEC were $83 million and operating cash flow (Adjusted EBITDA minus capital expenditures) was $195 million for the quarter. For the full year 2002 ILEC capital expenditures were $289 million and operating cash flow was $808 million. Fourth-quarter 2002 revenue from Electric Lightwave totaled $41.2 million, Adjusted EBITDA was $9.8 million, capital expenditures were $3.8 million and operating cash flow was $6 million. For the full year 2002, revenue totaled $175 million, Adjusted EBITDA was $17.1 million, capital expenditures were $12 million and operating cash flow was $5.1 million. Public Service The gas and electric segments accounted for $97 million of fourth-quarter 2002 consolidated revenue, $10.2 million of Adjusted EBITDA and $9.1 million of capital expenditures. For the full year 2002, the gas and electric segment accounted for $431.3 million of consolidated revenue, $76.1 million of Adjusted EBITDA, $39.7 million of capital expenditures and $36.4 million of operating cash flow. Adjusted EBITDA is EBITDA (operating income plus depreciation and amortization) plus restructuring and other expenses, loss on impairment and reserve for telecommunications bankruptcies. Free cash flow is operating income plus depreciation and amortization and the loss on impairment, minus cash capital expenditures, cash interest expense and cash taxes. EBITDA is a measure commonly used to analyze companies on the basis of operating performance. EBITDA is not a measure of financial performance under generally accepted accounting principles nor is it an alternative to cash flow as a measure of liquidity and may not be comparable to similarly titled measures of other companies. The information in this press release should be read in conjunction with the financial statements and footnotes contained in our documents to be filed with the Securities and Exchange Commission. About Citizens Communications 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 local and national economies, the state of the telecommunications industry, 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 and the mix of products and services offered in the company's markets. 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.
Exhibit 99.2 Citizens Communications Company Consolidated Financial Data (unaudited) For the quarter ended For the year ended December 31, December 31, -------------------------- -------------------------- % % (Amounts in thousands - except per-share 2002 2001 Change 2002 2001 Change amounts) ----------------------------------- ------------------------------------ Income Statement Data Continuing operations Revenue $ 658,728 $ 665,849 -1% $ 2,669,332 $2,456,993 9% Cost of services 119,101 122,271 -3% 476,920 599,378 -20% Other operating expenses (1) 241,397 271,073 -11% 1,002,355 951,710 5% Depreciation and amortization (2) 191,359 218,602 -12% 755,522 632,336 19% Reserve for telecommunications bankruptcies (6,925) 21,200 -133% 10,880 21,200 -49% Restructuring and other expenses (3) 15,274 6,325 141% 37,186 19,327 92% Loss on impairment (4) - - - 1,074,058 - 100% Operating income (loss) 98,522 26,378 274% (687,589) 233,042 -395% Investment and other loss, net (19,828) (82,036) 76% (82,553) (65,541) -26% Gain on sale of assets 7,897 - 100% 9,798 139,304 -93% Interest expense 113,280 122,845 -8% 477,506 385,536 24% Income tax expense (benefit) 9,814 (63,988) 115% (414,874) (14,805) -2702% Income (loss) from discontinued operations, net of tax - 6,200 -100% (1,478) 17,875 -108% Gain on disposal of water segment, net of tax 12,043 - 100% 181,369 - 100% Extraordinary expense-discontinuation of Statement of Financial Accounting Standards No. 71, net of tax - - - - 43,631 -100% Cumulative effect of change in accounting principle (5) - - - 39,812 - -100% Carrying cost of equity forward contracts - - - - 13,650 -100% Net loss available to common shareholders (24,460) (108,315) 77% (682,897) (103,332) -561% Other Financial Data Adjusted EBITDA from continuing operations (6) $ 298,230 $ 272,505 9% $ 1,190,057 $ 905,905 31% Total capital expenditures (7) 114,538 177,666 -36% 358,741 487,271 -26% Free cash flow (7) (8) 70,945 (72,363) 198% 333,174 77,523 330% Long-term debt (9) 4,957,361 5,534,906 -10% 4,957,361 5,534,906 -10% Total debt (9) 5,016,272 6,018,812 -17% 5,016,272 6,018,812 -17% Less: Cash and cash equivalents 393,177 215,869 82% 393,177 215,869 82% Net debt 4,623,095 5,802,943 -20% 4,623,095 5,802,943 -20% Net debt to annualized Adjusted EBITDA 3.9 5.3 -26% 3.9 6.4 -39% Interest coverage 2.6 2.2 18% 2.5 2.3 9% Shares of common stock outstanding 282,484 281,291 0% 282,484 281,291 0% Weighted average shares outstanding 281,096 279,675 1% 280,686 273,721 3% Net loss available to common shareholders (10) $ (0.09) $ (0.39) 77% $ (2.43) $ (0.38) -539%
(1) Includes $3,715,000 and $21,380,000 of acquisition assimilation expenses for the quarter and year ended December 31, 2001, respectively. (2) Includes $10,577,000 and $23,379,000 of accelerated depreciation for the quarter and year ended December 31, 2002, respectively, related to the closing of our Plano, Texas facility. Also includes $37,526,000 and $91,219,000 of goodwill amortization for the quarter and year ended December 31, 2001, respectively. (3) Primarily severance costs. (4) Shown as the pre-tax amount. (5) Write-off of ELI's goodwill. (6) Adjusted EBITDA is operating income plus depreciation and amortization, the reserve for telecommunications bankruptcies, restructuring and other expenses and loss on impairment. Adjusted EBITDA is a measure commonly used to analyze companies on the basis of operating performance. It is not a measure of financial performance under generally accepted accounting principles and should not be considered as an alternative to net income as a measure of performance nor an alternative to cash flow as a measure of liquidity and may not be comparable to similarly titled measures of other companies (see segment footnote in the SEC Form 10-K). (7) Excludes $110,000,000 of previously leased facilities purchased by ELI in April 2002. (8) Free cash flow is operating income plus depreciation and amortization and loss on impairment minus cash interest expense, cash income taxes and cash capital expenditures. (9) Excludes equity units. Total debt includes current portion of long term debt. (10) Calculated based on weighted average shares outstanding.
Citizens Communications Company Financial and Operating Data (unaudited) For the quarter ended For the year ended December 31, December 31, --------------------------- --------------------------- (Dollars in thousands, except operating data) % % TELECOMMUNICATIONS (1) 2002 2001 Change 2002 2001 Change ------------------------------------- ------------------------------------- Select Income Statement Data Revenue Access services $ 169,762 $ 170,902 -1% $ 673,456 $ 564,670 19% Local services 219,217 215,452 2% 869,907 673,320 29% Long distance and data services 78,207 73,130 7% 305,455 208,274 47% Directory services 25,886 25,433 2% 104,383 72,375 44% Other 27,339 25,801 6% 109,704 75,414 45% ILEC revenue 520,411 510,718 2% 2,062,905 1,594,053 29% Electric Lightwave 41,235 50,083 -18% 175,079 223,391 -22% Total revenue 561,646 560,801 0% 2,237,984 1,817,444 23% Expenses Network access expense 60,688 64,856 -6% 235,462 194,094 21% Other operating expenses (2) 212,923 236,322 -10% 888,560 807,739 10% Depreciation and amortization (3) 191,351 218,151 -12% 755,158 625,293 21% Reserve for telecommunications bankruptcies (6,925) 21,200 -133% 10,880 21,200 -49% Restructuring and other expenses (4) 15,274 6,325 141% 37,186 19,327 92% Loss on impairment (5) - - - 656,658 - 100% Total expenses 473,311 546,854 -13% 2,583,904 1,667,653 55% Adjusted EBITDA and Capital Expenditure Data ILEC Adjusted EBITDA (6) $ 278,247 $ 253,915 10% $ 1,096,864 $ 802,577 37% ILEC Adjusted EBITDA margin 53.5% 49.7% 8% 53.2% 50.3% 6% ILEC capital expenditures $ 83,343 $ 149,345 -44% $ 288,823 $ 391,377 -26% ELI Adjusted EBITDA (6) 9,788 5,708 71% 17,098 13,034 31% ELI capital expenditures (7) 3,800 8,381 -55% 12,003 28,233 -57% Operating Income (Loss) ILEC $ 89,174 $ 32,999 170% $ 413,241 $ 220,956 87% ELI (839) (19,052) 96% (759,161) (71,165) -967% Operating Data ILEC access lines 2,444,400 2,481,409 -1% 2,444,400 2,481,409 -1% ILEC switched access minutes of use (in millions) 3,069 3,107 -1% 12,252 9,937 23% ILEC average monthly revenue per average line $ 70.75 $ 68.48 3% $ 69.80 $ 68.76 2% (1) Includes our Incumbent Local Exchange Carrier (ILEC) and Electric Lightwave, Inc. (ELI) businesses. (2) See footnote (1) on first page. (3) See footnote (2) on first page. (4) See footnote (3) on first page. (5) See footnote (4) on first page. (6) See footnote (6) on first page. (7) See footnote (7) on first page.
Citizens Communications Company Financial and Operating Data (unaudited) For the quarter ended For the year ended December 31, December 31, ----------------------------- ----------------------------- (Dollars in thousands) % % GAS AND ELECTRIC SECTORS (1) 2002 2001 Change 2002 2001 Change ---------------------------------------- ---------------------------------------- Select Income Statement Data Revenue $ 97,083 $ 105,048 -8% $ 431,348 $ 639,549 -33% Gas, electric energy and fuel oil purchased 58,413 57,415 2% 241,458 405,284 -40% Other operating expenses 28,473 34,751 -18% 113,795 143,971 -21% Depreciation and amortization (2) 8 451 -98% 364 7,043 -95% Loss on impairment (3) - - - 417,400 - 100% Operating income (loss) 10,189 12,431 -18% (341,669) 83,251 -510% Other Financial Data Adjusted EBITDA (4) $ 10,197 $ 12,882 -21% $ 76,095 $ 90,294 -16% Capital expenditures 9,140 19,123 -52% 39,660 66,844 -41%
(1) Our Louisiana and Colorado gas operations were disposed of by sale on July 2, 2001 and November 30, 2001, respectively. Our Kauai Electric operations were disposed of by sale on November 1, 2002. The sale of these operations affects the comparability of data presented. (2) Our gas and electric operations are reported as "held for sale." Accordingly, we ceased to record depreciation expense effective October 1, 2000 and January 1, 2001, respectively. (3) See footnote (4) on first page. (4) Adjusted EBITDA is operating income plus depreciation and amortization and loss on impairment (see footnote (6) on first page). -----END PRIVACY-ENHANCED MESSAGE-----