-----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, PHgRf4Yop6VA5JgaFS5mH0nJBD3qfktKaPzjxzok65h61YdXYjTkdNBl+O6tB+hN 6uRYbV7EX3IfyuzOztncfg== 0000020520-97-000014.txt : 19970811 0000020520-97-000014.hdr.sgml : 19970811 ACCESSION NUMBER: 0000020520-97-000014 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970630 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970808 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CITIZENS UTILITIES 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: 97653448 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 8-K 1 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: August 7, 1997 (Date of earliest event reported) CITIZENS UTILITIES 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.) High Ridge Park, P.O. Box 3801, Stamford, Connecticut 06905 - ----------------------------------------------------- ----- (Address of principal executive offices) (Zip Code) (203) 329-8800 (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 Utilities Company released August 7, 1997. 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 UTILITIES COMPANY Registrant By:/s/ Livingston E. Ross Vice President and Controller Date: August 7, 1997 EX-99 2 PRESS RELEASE OF CITIZENS UTILITIES COMPANY Exhibit 99.1 For additional information contact: Arthur Dague (203) 329-5094 adague@czn.com CITIZENS UTILITIES ANNOUNCES 1997 SECOND-QUARTER AND SIX-MONTH RESULTS Stamford, Connecticut, August 7, 1997 -- Citizens Utilities' vice ---------------------------------------- president and treasurer, Robert J. DeSantis, announced today that earnings and earnings per share for the three months and six months ended June 30, 1997 were impacted by the company's telecommunications expansion strategy, which has recently been modified, and by $135 million of non-recurring after-tax charges. Mr. DeSantis explained that actions taken by Citizens in connection with the modification of its telecommunications strategy have already reduced expenses and improved earnings and earnings per share performance and will continue to do so in the second half of this year. Mr. DeSantis said that the actions already taken include a restructuring expected to reduce operating expenses by approximately $70 million annually and a significant $175 million reduction to the company's 1997 capital expenditure program. Mr. DeSantis explained that the operating expense savings associated with the restructuring, which primarily affects the company's Communications Sector, relate to workforce and benefit reductions, call center consolidations, sales office closings and a reconfiguration of the company's network cost structure through new carrier contracts and network design. The capital expenditure reductions primarily affect the company's Communications Sector resulting from a reconsideration of expenditure levels due to the curtailment of certain long distance service operations and recent FCC orders. (more) Page Two Mr. DeSantis reported that for the three months ended June 30, 1997, the company's net income, excluding non-recurring charges, was $11.6 million. Including the charges, the company incurred a loss of $123.6 million. Earnings per share, excluding the charges, were 5 cents. Including the charges, the company's per share loss was 51 cents. For the six months ended June 30, 1997, net income, excluding non-recurring charges, was $41.8 million. Including the charges, the company incurred a loss of $93.4 million. Earnings per share, excluding the charges, was 17 cents. Including the charges, the company's per share loss was 39 cents. Mr. DeSantis summarized the $197.3 million of non-recurring charges as follows: $34.6 million for curtailment of certain long distance service operations; $36.9 million for benefit plan curtailments and related regulatory assets no longer deemed recoverable; $63.8 million for telecommunications information systems and software; $45 million for regulatory commission orders issued in the second quarter; and $17 million for other miscellaneous items. "Although earnings performance for the first half of 1997 was affected by the company's expansion of long distance service into adjacent markets and by non-recurring charges, the actions we commenced in the second quarter to reduce expenses and improve earnings had a positive effect on the company's results for the month of June," said Mr. DeSantis. "Based on improved operating income trends experienced by our Communications Sector in the months of June and July, the actions we have taken have already benefited Citizens' financial performance and will become apparent to investors beginning with the company's third-quarter financial results," Mr. DeSantis added. "It is management's expectation that these upward trends will continue in both the third and fourth quarters of 1997 and beyond." Additionally, Mr. DeSantis reiterated the company's intention to monetize the value of its subsidiary, Electric Lightwave, Inc., through an equity sale. Mr. DeSantis stated that "our expectation is that this will be accomplished before year end and will not only generate significant capital expenditure funding but also a non-recurring gain to offset the non-recurring charge taken in the second quarter." (more) Page Three Citizens Utilities (NYSE: CZNA, CZNB, CZNPr) provides telecommunications and public utility services to approximately 1.6 million customers in 20 states. Citizens Communications is an integrated communications providers offering local telephone, long distance, cellular, paging, Internet, network sales and other telecommunications products and services. Citizens also has investments in Centennial Cellular Corp. (NASDAQ: CYCL) and Hungarian Telephone and Cable Corp. (ASE: HTC) and owns Electric Lightwave, Inc., a leading competitive provider of communications services for business and long distance carriers in the western United States. For more information about Citizens, please visit our web site at http://www.czn.net. This press release contains forward-looking statements relating to future expenses, capital expenditures, revenues, charges and earnings. These statements may differ from actual future results due to, but not limited to, the actual effects of the restructuring, reduction in capital expenditures and other actions described herein, changes in the local and overall economy, the nature and pace of technological change, the number and effectiveness of competitors in the company's markets, success in marketing and selling expenditures and efforts, weather conditions, changes in legal and regulatory policy, name recognition, and the mix of products and services offered in the company's target markets. Investors may wish to consider these important factors in evaluating any statements herein. (table follows) Page Four Citizens Utilities Company and Subsidiaries Consolidated Financial Data (unaudited)
For the quarter For the six ended months ended June 30, June 30, ----------------------------------------------------------------- (Dollars in thousands) 1997 1996 1997 1996 ----------------------------------------------------------------- Income Statement Data(1) Revenues $ 326,908 $ 318,127 $ 699,400 $ 647,265 Natural gas, electric energy and fuel oil purchased 42,590 50,618 123,349 118,979 Sales and marketing expenses 16,571 12,212 30,705 17,548 Network expenses 28,110 14,360 57,204 22,139 Depreciation and amortization 58,013 47,199 114,579 94,229 Other operating expenses 148,655 119,656 278,513 249,296 Operating income 32,969 74,082 95,050 145,074 Non-recurring charges 191,090 -- 191,090 -- Operating income/(loss) including non-recurring charges (158,121) 74,082 (96,040) 145,074 Investment and other income 11,327 17,776 23,611 28,823 Interest expense 26,950 22,644 53,966 44,647 Other non-recurring charges 6,230 -- 6,230 -- Income taxes (57,949) 21,584 (42,322) 41,511 Convertible preferred dividends 1,552 1,379 3,104 2,632 Net income /(loss) (123,577) 46,251 (93,407) 85,107 Net income excluding non-recurring charges 11,587 46,251 41,757 85,107 Earnings/(loss) per share (2) $ (.51) $ .19 $ (.39) $ .35 Earnings per share excluding non-recurring charges $ .05 $ .19 $ .17 $ .35 Weighted average shares outstanding (2) 243,708 246,676 242,133 245,225
(1) In the second quarter of 1997, the company recorded certain charges to earnings totaling approximately $197 million. The charges relate to curtailment of certain long distance service operations, benefit plan curtailments and related regulatory assets no longer deemed recoverable, telecommunications information systems and software, regulatory commission orders issued in the second quarter and other miscellaneous items. (2) Adjusted for subsequent stock dividends. EX-99 3 FINANCIAL AND OPERATING DATA Exhibit 99.2
Citizens Utilities Company and Subsidiaries ------------------------------------------- Consolidated Financial Data --------------------------- (unaudited) For the quarter ended For the six months ended June 30, June 30, -------------------------- ----------------------------- (Dollars in thousands) 1997 1996 %Change 1997 1996 %Change -------------------------- ----------------------------- Income Statement Data(1) - ------------------------ Revenues $ 326,908 $318,127 3% $ 699,400 $ 647,265 8% Natural gas, electric energy and fuel oil purchased 42,590 50,618 -16% 123,349 118,979 4% Sales and marketing expenses 16,571 12,212 36% 30,705 17,548 75% Network expenses 28,110 14,360 96% 57,204 22,139 158% Depreciation and amortization 58,013 47,199 23% 114,579 94,229 22% Other operating expenses 148,655 119,656 24% 278,513 249,296 12% Operating income 32,969 74,082 -55% 95,050 145,074 -34% Nonrecurring charges 191,090 - 191,090 - Operating income/(loss) including nonrecurring charges (158,121) 74,082 -313% (96,040) 145,074 -166% Investment and other income 11,327 17,776 -36% 23,611 28,823 -18% Interest expense 26,950 22,644 19% 53,966 44,647 21% Other nonrecurring charges 6,230 - 6,230 - Income taxes (57,949) 21,584 -368% (42,322) 41,511 -202% Convertible preferred dividends 1,552 1,379 13% 3,104 2,632 18% Net income/(loss) (123,577) 46,251 -367% (93,407) 85,107 -210% Net income excluding nonrecurring charges 11,587 46,251 -75% 41,757 85,107 -51% Cash Flow and Capital Expenditure Data - -------------------------------------- EBITDA (2) $102,311 $139,057 -26% $ 233,242 $ 268,126 -13% Cash flow from operations 37,463 76,823 -51% 101,555 149,813 -32% Capital expenditures 119,764 66,307 81% 193,532 108,939 78% Free cash flow (82,301) 10,516 -883% (91,977) 40,874 -325% Select Balance Sheet Data - ------------------------- Cash and investments $ 461,528 $ 473,758 -3% Total assets 4,439,595 4,168,306 7% Net plant 3,278,372 2,985,790 10% Long-term debt 1,557,155 1,366,749 14% Equity (3) 1,769,859 1,814,248 -2% Shares of common stock outstanding 245,117 232,698 5% Weighted average shares outstanding (4) 242,133 245,225 -1% Per-Share Data(4) - ----------------- Earnings/(loss) per share $ (.51) $ .19 -378% $ (.39) $ .35 -211% Earnings per share excluding nonrecurring charges $ .05 $ .19 -77% $ .17 $ .35 -50% Operating cash flow per share $ .15 $ .31 -51% $ .42 $ .64 -34% Book value per share $ 6.48 $6.54 -1% Other Financial Data - ------------------- EBITDA margin 31% 44% 33% 41% Long-term debt to long-term debtand equity 47% 43% Interest coverage (5) 3.8x 6.1x $ 4.3x $ 6.0x Common equity market capitalization(in billions) $ 2.3 $ 2.7 Equity market capitalization(in billions)(6) $ 2.4 $ 2.9 Market capitalization (in billions)(7) $ 4.0 $ 4.3
(1) In the second quarter of 1997, the Company recorded certain charges to earnings totalling approximately $197 million. The charges relate primarily to certain assets deemed no longer recoverable, the effects of certain regulatory commission orders and the cutback of certain long distance service operations. Intercompany transactions have been eliminated for the consolidated income statement data. (2) Earnings before interest, income taxes, depreciation and amortization. Earnings excludes $197 million of nonrecurring charges made in the second quarter 1997. (3) Includes convertible preferred securities and the impact of $197 of nonrecurring charges made in the second quarter 1997. (4) Adjusted for subsequent stock dividends. (5) EBITDA divided by interest expense. EBITDA excludes $197 million of nonrecurring noncash charges made in the second quarter 1997. (6) Includes market value of convertible preferred securities. (7) Equity market capitalization plus market value of long-term debt. Note: Quarter ended information is not presented where it is the same as year to date. PAGE 1
Citizens Utilities Company and Subsidiaries ------------------------------------------- Sector Financial and Operating Data ----------------------------------- ` For the quarter ended For the six months ended June 30, June 30, ------------------------------- ------------------------------ (Dollars in thousands, except operating data) 1997 1996 %Change 1997 1996 %Change ------------------------------- ------------------------------ Citizens Communications (1) - ---------------------------- Select Income Statement Data - ---------------------------- Revenues Network access services (2) $ 111,008 $ 107,780 3% $ 224,261 $ 208,443 8% Local network services 62,705 59,790 5% 123,580 115,338 7% Long distance service (3) 25,950 10,615 144% 52,127 18,828 177% Directory 8,066 7,693 5% 15,568 14,809 5% Other (4) 15,682 16,793 -7% 26,087 27,852 -6% Total revenues 223,411 202,671 10% 441,623 385,270 15% Sales and Marketing expenses (5) 17,547 12,212 44% 31,681 17,548 81% Network expenses (6) 33,958 14,567 133% 69,287 23,193 199% Depreciation and amortization 45,488 36,670 24% 89,431 73,213 22% Operating and maintenance expenses (7) 112,711 87,112 29% 210,689 174,329 21% Operating income 13,707 52,110 -74% 40,535 96,987 -58% Nonrecurring charges 156,239 - 156,239 - Operating income/(loss) including nonrecurring charges (142,532) 52,110 -374% (115,704) 96,987 -219% Cash Flow and Capital Expenditure Data - -------------------------------------- Operating cash flow (8) $ 59,195 $ 88,780 -33% $ 129,966 $ 170,200 -24% Capital expenditures 89,271 46,140 93% 145,118 75,652 92% Free cash flow (9) (30,076) 42,640 -171% (15,152) 94,548 -116% Select Balance Sheet Data - ------------------------- Total assets $2,534,321 $2,209,292 15% Net plant $2,099,245 $1,888,308 11% Operating Data - -------------- Access lines 858,654 820,607 5% Long distance customers - in territory 211,806 109,000 94% - out of territory 26,552 23,000 15% - total 238,358 132,000 81%
(1) Citizens Communications includes Telecommunications and Electric Lightwave, Inc. (2) Includes transactions between the Company's long distance operations and its local exchange operations of $8,939 and $736 for the second quarter ended 1997 and 1996, respectively; $16,386 and $1,054 for the six months ended 1997 and 1996, respectively. (3) Includes transactions between the Company's long distance operations and its local exchange operations of $900 and ($529) for the second quarter ended 1997 and 1996, respectively; $1,800 for the six months ended 1997. (4) Includes transactions between the Company's long distance operations and its local exchange operations of $1,215 for the second quarter ended 1996 and for the six months ended 1996. (5) Includes transactions between the Company's long distance operations and its local exchange operations of $976 for the second quarter ended 1997 and for the six months ended 1997. (6) Includes transactions between the Company's long distance operations and its local exchange operations of $5,848 and $207 for the second quarter ended 1997 and 1996, respectively; $12,083 and $1,054 for the six months ended 1997 and 1996, respectively. (7) Includes transactions between the Company's long distance operations and its local exchange operations of $3,015 and $1,215 for the second quarter ended 1997 and 1996, respectively; $5,127 and $1,215 for the six months ended 1997 and 1996,respectively. (8) Operating income plus depreciation. (9) Operating cash flow less capital expenditures. Note: Quarter ended information is not presented where it is the same as year to date. PAGE 2
Citizens Utilities Company and Subsidiaries ------------------------------------------- Sector Financial and Operating Data ----------------------------------- For the quarter ended For the six months ended June 30, June 30, ------------------------------- ------------------------------ (Dollars in thousands, except operating data) 1997 1996 %Change 1997 1996 %Change ------------------------------- ------------------------------ Citizens Public Services - ------------------------ Select Income Statement Data - ---------------------------- Revenues Residential distribution $ 60,608 $ 61,187 -1% $ 157,896 $ 147,228 7% Commercial distribution 27,351 26,803 2% 64,570 59,883 8% Industrial distribution 16,990 20,771 -18% 36,337 41,473 -12% Municipal distribution 2,765 2,547 9% 6,115 5,397 13% Total distribution 107,714 111,308 -3% 264,918 253,981 4% Transportation/Transmission 1,068 964 11% 2,693 2,583 4% Other 4,554 4,607 -1% 8,352 7,700 8% Total revenues 113,336 116,879 -3% 275,963 264,264 4% Natural gas, electric energy and fuel oil purchased 42,590 50,618 -16% 123,349 118,979 4% Depreciation and amortization 12,524 10,529 19% 25,147 21,016 20% Operating and maintenance expenses 38,961 33,759 15% 72,953 76,182 -4% Operating income 19,261 21,973 -12% 54,514 48,087 13% Nonrecurring charges 34,851 - 34,851 - Operating income/(loss) including nonrecurring charges (15,590) 21,973 -171% (19,663) 48,087 -59% Cash Flow and Capital Expenditure Data - -------------------------------------- Operating cash flow (1) $ 31,785 $ 32,502 -2% $ 79,661 $ 69,103 15% Capital expenditures 20,077 17,425 15% 32,687 28,821 13% Free cash flow (2) 11,708 15,077 -22% 46,974 40,282 17% Select Balance Sheet Data - ------------------------- Total assets $1,366,748 $1,313,772 4% Net plant 1,103,478 1,065,388 4% Operating Data - -------------- Customers 774,493 761,800 2%
(1) Operating income plus depreciation. (2) Operating cash flow less capital expenditures. Note: Quarter ended information is not presented where it is the same as year to date. PAGE 3
Citizens Utilities Company and Subsidiaries ------------------------------------------- Financial and Operating Data by Service --------------------------------------- ` For the quarter ended For the six months ended June 30, June 30, ---------------------------- ----------------------------- (Dollars in thousands, except operating data) 1997 1996 %Change 1997 1996 %Change ---------------------------- ----------------------------- Citizens Communications - ----------------------- Telecommunications - ------------------ Select Income Statement Data - ---------------------------- Revenues Network access services (1) $ 98,535 $ 101,434 -3% $ 202,414 $ 196,751 3% Local network services 61,816 59,371 4% 121,788 114,612 6% Long distance service (2) 25,485 10,545 142% 51,373 18,742 174% Directory 8,066 7,693 5% 15,568 14,809 5% Other (3) 15,257 16,762 -9% 25,381 27,504 -8% Total revenues 209,159 195,805 7% 416,524 372,418 12% Sales and marketing expenses (4) 13,857 9,170 51% 25,086 13,228 90% Network expenses (5) 26,267 11,203 134% 56,140 16,973 231% Depreciation and amortization 43,397 36,603 19% 84,818 71,458 19% Operating and maintenance expenses (6) 101,944 83,420 22% 192,339 164,421 17% Operating income 23,694 55,409 -57% 58,141 106,338 -45% Nonrecurring charges 152,963 - 152,963 - Operating income/(loss) including nonrecurring charges (129,269) 55,409 333% (94,822) 106,338 -189% Operating margin excluding nonrecurring charge 11% 28% 14% 29% Cash Flow and Capital Expenditure Data - -------------------------------------- Operating cash flow (7) $ 67,091 $ 92,012 -27% $ 142,959 $ 177,796 -20% Capital expenditures 59,903 42,919 40% 110,055 64,684 70% Free cash flow (8) 7,188 49,093 -85% 32,904 113,112 -71% Select Balance Sheet Data - ------------------------- Total assets $2,309,286 $2,061,516 12% Net plant $1,878,446 $1,751,167 7% Operating Data - -------------- Access lines 858,654 820,607 5% Long distance - in territory 211,806 109,000 94% - out of territory 26,552 23,000 15% - total 238,358 132,000 81% Revenue per access line $ 244 $ 239 2% $ 485 $ 454 7% In-territory toll minutes of use (in millions) 1,077 1,078 - 2,184 2,103 4% Citizens' long distance minutes of use (in millions) - in territory 106 45 136% 199 73 173% - out of territory 103 29 253% 206 53 288% - total long distance 209 74 182% 405 126 221% Citizens' in-territory long distance market share 18% 9%
(1) Includes transactions between the Company's long distance operations and its local exchange operations of $8,044 and $541 for the second quarters ended 1997 and 1996, respectively; $14,696 and $712 for the six months ended 1997 and 1996, respectively. (2) Includes transactions between the Company's long distance operations and its local exchange operations of $900 for the second quarter ended 1997 and $1,800 for the six months ended 1997. (3) Includes transactions between the Company's long distance operations and its local exchange operations of $1,215 for the second quarter ended 1996 and for the six months ended 1996. (4) Includes transactions between the Company's long distance operations and its local exchange operations of $976 for the second quarter ended 1997 and for the six months ended 1997. (5) Includes transactions between the Company's long distance operations and its local exchange operations of $4,953 and $183 for the second quarter ended 1997 and 1996, respectively; $10,393 and $712 for the six months ended 1997 and 1996, respectively. (6) Includes transactions between the Company's long distance operations and its local exchange operations of $3,015 and $1,215 for the second quarter ended 1997 and 1996, respectively; $5,127 and $1,215 for the six months ended 1997 and 1996, respectively. (7) Operating income plus depreciation. (8) Operating cash flow less capital expenditures. Note: Quarter ended information is not presented where it is the same as year to date. PAGE 4
Citizens Utilities Company and Subsidiaries ------------------------------------------- Financial and Operating Data by Service --------------------------------------- For the quarter ended For the six months ended June 30, June 30, ---------------------------- ------------------------------ (Dollars in thousands, except operating data) 1997 1996 %Change 1997 1996 %Change ---------------------------- ------------------------------ Citizens Communications - ----------------------- Electric Lightwave, Inc.(1) - --------------------------- Select Income Statement Data - ---------------------------- Revenues Network access services (2) $ 12,473 $ 6,346 97% $ 21,847 $ 11,692 87% Local network services 889 419 112% 1,792 726 147% Long distance service 465 70 564% 754 86 777% Other 425 31 1271% 706 348 103% Total revenues 14,252 6,866 108% 25,099 12,852 95% Sales and marketing expenses 3,690 3,042 21% 6,595 4,320 53% Network expenses (2) 7,691 3,364 129% 13,147 6,220 111% Depreciation and amortization 2,091 67 3021% 4,613 1,755 163% Operating and maintenance expenses 10,767 3,692 192% 18,350 9,908 85% Operating loss (9,987) (3,299) -203% (17,606) (9,351) -88% Nonrecurring charges 3,276 - 3,276 - Operating loss including nonrecurring charges (13,263) (3,299) -302% (20,882) (9,351) -123% Cash Flow and Capital Expenditure Data - -------------------------------------- Operating cash flow (3) $ (7,896) $(3,232) -144% $(12,993) $ (7,596) -71% Capital expenditures 29,368 3,221 812% 35,063 10,968 220% Free cash flow (4) (37,264) (6,453) -477% (48,056) (18,564) 159% Select Balance Sheet Data - ------------------------- Total assets $225,035 $147,776 52% Gross plant - owned 220,799 137,141 61% - leased 73,042 50,334 45% - total 293,841 187,475 57% Operating Data - -------------- Route miles 1,773 940 89% Fiber miles 99,908 64,574 55% Customers 1,005 521 93% Buildings connected 521 318 64% Revenue per customer $ 14,181 $ 13,179 8% $ 24,974 $ 24,668 1%
(1) Electric Lightwave, Inc. is Citizens' Competitive Local Exchange Company. (2) Includes transactions between the Company's long distance operations and its local exchange operations of $895 and $193 for the second quarters ended 1997 and 1996, respectively; $1,690 and $342 for the six months ended 1997 and 1996, respectively. (3) Operating loss plus depreciation. (4) Operating cash flow less capital expenditures. Note: Quarter ended information is not presented where it is the same as year to date. PAGE 5
Citizens Utilities Company and Subsidiaries ------------------------------------------- Financial and Operating Data by Service --------------------------------------- For the quarter ended For the six months ended June 30, June 30, ---------------------------- ------------------------------ (Dollars in thousands, except operating data) 1997 1996 %Change 1997 1996 %Change ---------------------------- ------------------------------ Citizens Public Services - ------------------------ Natural Gas - ----------- Select Income Statement Data - ---------------------------- Revenues Residential distribution $ 23,829 $ 25,484 -6% $ 84,225 $ 76,900 10% Commercial distribution 9,704 10,072 -4% 30,767 27,751 11% Industrial distribution 6,008 9,669 -38% 14,298 20,045 -29% Municipal distribution 660 440 50% 2,044 1,469 39% Total distribution 40,201 45,665 -12% 131,334 126,165 4% Transportation 302 305 -1% 1,382 1,298 6% Other 2,211 2,306 -4% 4,781 4,596 4% Total revenues 42,714 48,276 -12% 137,497 132,059 4% Natural gas purchased 19,610 26,911 -27% 78,179 75,112 4% Gross margin 23,104 21,365 8% 59,318 56,947 4% Depreciation and amortization 3,969 3,298 20% 7,908 6,573 20% Operating and maintenance expenses 13,462 12,685 6% 25,264 30,678 -18% Operating income 5,673 5,382 5% 26,146 19,696 33% Nonrecurring charges 9,634 - 9,634 - Operating income/(loss) including nonrecurring charges (3,961) 5,382 -174% 16,512 19,696 -16% Operating margin excluding nonrecurring charges 13% 11% 19% 15% Cash Flow and Capital Expenditure Data - -------------------------------------- Operating cash flow (1) $ 9,642 $ 8,680 11% $34,054 $26,269 30% Capital expenditures 9,287 6,045 54% 14,482 10,240 41% Free cash flow (2) 355 2,635 87% 19,572 16,029 22% Select Balance Sheet Data - ------------------------- Total assets $376,574 $330,014 14% Net plant $288,696 $265,823 9% Operating Data - -------------- Customers $372,686 $365,955 2% Billion Cubic Feet of gas throughput (BCF) 13.7 15.0 -9% 40.5 40.0 1%
(1) Operating income plus depreciation. (2) Operating cash flow less capital expenditures. Note: Quarter ended information is not presented where it is the same as year to date. PAGE 6
Citizens Utilities Company and Subsidiaries ------------------------------------------- Financial and Operating Data by Service --------------------------------------- ` For the quarter ended For the six months ended ended June 30, June 30, ---------------------------- ------------------------------ (Dollars in thousands, except operating data) 1997 1996 %Change 1997 1996 %Change ---------------------------- ------------------------------ Citizens Public Services - ------------------------ Electric - -------- Select Income Statement Data - ---------------------------- Revenues Residential distribution $ 19,156 $ 17,876 7% $ 39,810 $36,551 9% Commercial distribution 14,268 13,539 5% 27,705 26,137 6% Industrial distribution 10,758 10,884 -1% 21,606 21,093 2% Municipal distribution 2,105 2,107 0% 4,071 3,928 4% Total distribution 46,287 44,406 4% 93,192 87,709 6% Transmission 766 659 16% 1,311 1,285 2% Other 1,477 1,875 -21% 1,929 1,823 6% Total revenues 48,530 46,940 3% 96,432 90,817 6% Electric energy and fuel oil purchased 22,980 23,707 -3% 45,170 43,867 3% Gross margin 25,550 23,232 10% 51,262 46,950 9% Depreciation and amortization 5,589 4,398 27% 11,178 8,797 27% Operating and maintenance expenses 13,033 10,977 19% 23,929 23,488 2% Operating income 6,928 7,857 -12% 16,155 14,665 10% Nonrecurring charges 21,787 - 21,787 - Operating income/(loss) including nonrecurring charges (14,859) 7,857 -289% (5,632) 14,665 -138% Operating margin excluding nonrecurring charges 14% 17% 17% 16% Cash Flow and Capital Expenditure Data - -------------------------------------- Operating cash flow (1) $ 12,517 $ 12,255 2% $ 27,333 $ 23,462 16% Capital expenditures 4,314 4,966 -13% 7,765 9,868 -21% Free cash flow (2) 8,203 7,289 13% 19,568 13,594 44% Select Balance Sheet Data - ------------------------- Total assets $472,224 $487,786 -3% Net plant $385,660 $391,101 -1% Operating Data - -------------- Customers 110,435 108,092 2% Megawatt hours sold 375,353 383,827 -2% 774,762 773,360 - Megawatt hours generated 82,326 90,882 -9% 174,228 175,212 -1% Megawatt hours purchased 373,308 349,116 7% 707,812 671,733 5%
(1) Operating income plus depreciation. (2) Operating cash flow less capital expenditures. Note: Quarter ended information is not presented where it is the same as year to date. PAGE 7
Citizens Utilities Company and Subsidiaries ------------------------------------------- Financial and Operating Data by Service --------------------------------------- ` For the quarter ended For the six months ended ended June 30, June 30, ---------------------------- ------------------------------ (Dollars in thousands, except operating data) 1997 1996 %Change 1997 1996 %Change ---------------------------- ------------------------------ Citizens Public Services - ------------------------ Water/Wastewater - ---------------- Select Income Statement Data - ---------------------------- Revenues Residential distribution $ 17,623 $ 17,827 -1% $ 33,861 $ 33,777 - Commercial distribution 3,379 3,192 6% 6,098 5,995 2% Industrial distribution 224 218 3% 433 335 29% Other 866 426 103% 1,642 1,281 28% Total revenues 22,092 21,663 2% 42,034 41,388 2% Depreciation and amortization 2,966 2,833 5% 6,061 5,646 7% Operating and maintenance expenses 12,466 10,097 23% 23,760 22,016 8% Operating income 6,660 8,733 -24% 12,213 13,726 -11% Nonrecurring charges 3,430 - 3,430 - Operating income including nonrecurring charges 3,230 8,733 -63% 8,783 13,726 -36% Operating margin excluding nonrecurring charges 30% 40% 29% 33% Cash Flow and Capital Expenditure Data Operating cash flow (1) $ 9,626 $ 11,566 -17% $ 18,274 $ 19,372 -6% Capital expenditures 6,476 6,414 1% 10,440 8,713 20% Free cash flow (2) 3,150 5,152 -39% 7,834 10,659 -27% Select Balance Sheet Data - ------------------------- Total assets $517,950 $ 495,972 4% Net plant $429,122 $ 408,464 5% Operating Data - -------------- Customers 291,372 287,753 1% Billions of gallons of water delivered 8.7 8.2 7% 14.2 14.2 - Billions of gallons of wastewater 1.3 1.6 -19% 2.8 3.1 -10%
(1) Operating income plus depreciation. (2) Operating cash flow less capital expenditures. Note: Quarter ended information is not presented where it is the same as year to date. The foregoing information is unaudited and should be read in conjunction with the financial statements and footnotes included in the Company's Form 10-K for the three years ended December 31, 1996 and Form 10-Q for the six months ended June 30, 1997 filed with the Securities and Exchange Commission. Allocations of expense and other items among services and sources of revenues are derived from the Company's books with certain adjustments. The information is not necessarily that which would be presented for a single service on a stand-alone basis. The Company believes its primary risk factors include, but are not limited to: changes in the local and overall economy, the nature and pace of technological change, the number and effectiveness of competitors in the Company's markets, success in marketing and selling expenditures and efforts, weather conditions, changes in legal and regulatory policy, name recognition, and the mix of products and services offered in the Company's target markets. Any and all Company information should be evaluated in light of these important risk factors. PAGE 8 -----END PRIVACY-ENHANCED MESSAGE-----