-----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, V+uZKdq2QGkkCvVOQDJtcGHD7h/BMU0aHBILQl1F0/ScPCcmPx56tmVFjc5ZB16e WcoTzXflC/1IGLvErSZG4w== 0000020520-98-000004.txt : 19980317 0000020520-98-000004.hdr.sgml : 19980317 ACCESSION NUMBER: 0000020520-98-000004 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971231 ITEM INFORMATION: FILED AS OF DATE: 19980313 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: SEC FILE NUMBER: 001-11001 FILM NUMBER: 98564751 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: March 11, 1998 (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) 614-8800 (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 March 11, 1998. 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: March 12, 1998 EX-99 2 PRESS RELEASE Exhibit 99.1 FOR IMMEDIATE RELEASE Contact: Alice Catalano (203)614-5185 acatalan@czn.com CITIZENS UTILITIES ANNOUNCES 1997 FOURTH-QUARTER AND YEAR-END RESULTS Stamford, Connecticut, March 11, 1998 -Citizens Utilities' chief financial officer, Robert J. DeSantis, announced today 1997 fourth quarter and year ended December 31, 1997 financial results. For the fourth quarter, revenues grew 12% to $379 million over the $339 million reported for the corresponding 1996 quarter. Net income of $80 million increased 67% compared to net income of $48 million for the fourth quarter of 1996. Earnings per share of 32 cents for the fourth quarter of 1997 increased 69% from 19 cents for the fourth quarter of 1996 . Results for the fourth quarter 1997 included a one time after-tax gain of $51 million from the sale of a minority interest in the company's competitive local exchange subsidiary, Electric Lightwave, Inc. Full year 1997 revenues grew 8% to $1.4 billion from $1.3 billion in 1996. 1997 reported net income was $10 million and earnings per share was 4 cents, as compared to net income of $179 million and earnings per share of 70 cents in 1996. 1997 results were affected by two special items: a $135 million after-tax charge primarily related to the restructuring of the company's communications business and the $51 million after-tax gain from the sale of subsidiary stock. Absent these special items, 1997 earnings and earnings per share were $94 million and 37 cents, respectively. 1997 earnings and earnings per share also reflect the absorption of $34 million, or 9 cents per share, for Electric Lightwave's operating losses. Mr. DeSantis stated that, "Citizens Communications revenues increased 9% to $817 million in 1997 while annual revenue per access line grew 4% to $935, well above the industry average . All three major revenue components-- network access services, local network services and long distance services--showed positive gains. Annual access line growth of 5% continues to exceed the industry average while in territory toll minutes of use grew 6% and Citizens Long Distance toll minutes of use increased 120% over 1996." "Citizens Public Services 1997 revenues were $540 million, up 4% over 1996. 1997 operating income of $104 million increased 17% over the prior year. Citizens Public Services productivity measurements continue to top the industry with 475 customers per employee and $171,300 of net revenue per employee," Mr. DeSantis noted. Commenting on Electric Lightwave Mr. DeSantis stated, "the November 1997 initial public offering of Electric Lightwave common securities established a public market enterprise value for the subsidiary of approximately $1 billion. Citizens' 83% interest in this enterprise translates into approximately $830 million of value, or over $3.25 per share, for Citizens' shareholders. This value creation validates the $130 million of Electric Lightwave's aggregate operating losses which have impacted Citizens' earnings over the past several years. The initial public offering also provided funding for Electric Lightwave's expansion at the lowest cost of capital to Citizens shareholders and bondholders." Citizens Utilities (NYSE: CZN, CZNPr) provides Communications Services and Public Services including, natural gas distribution, electric distribution, water distribution and wastewater treatment services to approximately 1.8 million customers in 20 states. Citizens owns a controlling interest in Electric Lightwave, Inc.,(NASDAQ:ELIX), a leading full-service, facilities-based integrated communications services provider and has investments in Centennial Cellular Corp. (NASDAQ:CYCL), a cellular telephone company, and Hungarian Telephone and Cable Corp. (ASE: HTC).
Citizens Utilities Company and Subsidiaries Consolidated Financial Data For the year ended December 31, -------------------------------- % 1997 1996 Change (Dollars in thousands, except per share data) --------------------------------------------- Income Statement Data Revenues $ 1,414,386 $ 1,306,517 8% Cost of services 333,561 285,749 17% Sales and marketing expenses 46,073 42,823 8% Network expenses 98,935 64,645 53% Depreciation 235,812 193,733 22% Other operating expenses 592,008 488,526 21% Operating income 206,932 295,686 -30% Charges to earnings (1) 191,090 - n/a Operating income including charges to earnings 15,842 295,686 n/a Non operating gain on sale of subsidiary stock (1) 78,734 - n/a Investment and other income 42,706 66,455 -36% Interest expense 107,585 92,695 16% Charges to earnings (1) 6,230 - n/a Income taxes 7,157 84,937 -92% Convertible preferred dividends 6,210 5,849 6% Net income 10,100 178,660 -94% Net income excluding special items (1) 94,087 178,660 -47% Per-Share Data (2) Basic net income per share of common stock $ .04 $ .70 -94% Basic net income per share of common stock excluding special items $ .37 $ .70 -47% Basic net income per share of common stock excluding special items and ELI $ .46 $ .77 -40% Weighted average shares 252,563 253,592 0%
(1) Special items impacting the 1997 income statement include charges to earnings of $197.3 million ($135.2 million after tax) and a non operating gain on sale of subsidiary stock of $78.7 million ($51.2 million after tax). (2) Adjusted for subsequent stock dividends and stock splits and used in the calculation of all per share data. No adjustment has been made for the Company's .75% first quarter 1998 stock dividend because the effect is immaterial. (3) ELI is Electric Lightwave, Inc., the Company's competitive local exchange subsidiary. 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 Year Ended December 31, December 31, ---------------------- ---------------------- % % (Dollars in thousands) 1997 (1) 1996 Change 1997 1996 Change -------------------------------------------------------------------- Income Statement Data Revenues $ 378,868 $ 339,292 12% $1,414,386 $ 1,306,517 8% Cost of services 89,770 81,637 10% 333,561 285,749 17% Sales and marketing expenses 9,774 11,400 -14% 46,073 42,823 8% Depreciation 63,122 53,258 19% 235,812 193,733 22% Other operating expenses 155,757 116,606 34% 592,008 488,526 21% Operating income 60,445 76,391 -21% 206,932 295,686 -30% Charges to earnings (2) - - 191,090 - Operating income including charges to earnings 60,445 76,391 -21% 15,842 295,686 -95% Non operating gain on sale of subsidiary stock (2) 78,734 - 78,734 - Investment and other income 8,175 20,211 -60% 42,706 66,455 -36% Interest expense 27,972 25,682 9% 107,585 92,695 16% Charges to earnings (2) - - 6,230 - Income taxes 37,370 21,746 72% 7,157 84,937 -92% Convertible preferred dividends 1,553 1,653 -6% 6,210 5,849 6% Net income 80,459 47,521 69% 10,100 178,660 -94% Net income excluding special items (2) 29,284 47,521 -38% 94,087 178,660 -47% Cash Flow and Capital Expenditure Data EBITDA excluding ELI (3) $ 138,424 $ 157,668 -12% $ 507,958 $ 574,292 -12% Capital expenditures excluding ELI 150,345 121,062 24% 399,940 276,156 45% EBITDA 131,742 149,860 -12% 485,450 555,874 -13% Cash flow from operations 55,259 156,542 -65% 230,432 375,181 -39% Capital expenditures 206,253 132,523 56% 524,489 317,763 65% Free cash flow (150,994) 24,019 -729% (294,057) 57,418 -612% Select Balance Sheet Data Cash and investments $ 433,662 $ 563,382 -23% Total assets 4,872,852 4,523,148 8% Net plant 3,667,793 3,138,052 17% Long-term debt 1,706,532 1,509,697 13% Equity (4) 1,880,461 1,879,433 0% Shares of common stock outstanding 250,994 239,148 5% Weighted average shares outstanding (5) 251,245 251,234 0% 252,563 253,592 0% Per-Share Data (5) Basic net income per share of common stock $ .32 $ .19 69% $ .04 $ .70 -94% Basic net income per share of common stock excluding special items $ .12 $ .19 -38% $ .37 $ .70 -47% Basic net income per share of common stock excluding special items and ELI $ .16 $ .23 -30% $ .46 $ .77 -40% Operating cash flow per share $ .22 $ .62 -65% $ .91 $ 1.48 -38% Operating cash flow per share excluding ELI $ .25 $ .65 -62% $ 1.00 $ 1.55 -35% Book value per share $ 6.68 $ 6.68 0% $ 6.65 $ 6.62 0% Other Financial Data Long-term debt to long-term debt and equity 48% 45% Interest coverage (6) 4.7x 5.8x 4.5x 6.0x Interest coverage excluding ELI (6) 4.9x 6.1x 4.8x 6.2x Common equity market capitalization (in billions) $ 2.4 $ 2.6 Equity market capitalization (in billions) (7) $ 2.6 $ 2.8 Market capitalization (in billions) (8) $ 4.4 $ 4.4 ELI public enterprise value (in billions) (9) $ .8 n/a
(1) 1997 income statement data includes the full year's impact of Ogden, an acquisition accounted for under the pooling of interests method of accounting. (2) Special items impacting the 1997 income statement include charges to earnings of $197.3 million ($135.2 million after tax) and a non operating gain on sale of subsidiary stock of $78.7 million ($51.2 million after tax). (3) Earnings before interest, income taxes, depreciation and amortization, excludes special items. ELI is Electric Lightwave Inc., the Company's competitive local exchange subsidiary. (4) Includes convertible preferred securities. (5) Adjusted for subsequent stock dividends and stock splits and used in the calculation of all per share data. No adjustment has been made for the Company's .75% first quarter 1998 stock dividend because the effect is immaterial. (6) EBITDA divided by interest expense, excludes special items. (7) Includes market value of convertible preferred securities. (8) Equity market capitalization plus market value of long-term debt. (9) Includes common equity market capitalization plus net debt. Note: Quarter ended information is not presented where it is the same as year to date. 1 Citizens Utilities Company and Subsidiaries Financial and Operating Data by Service For the quarter ended For the Year Ended December 31, December 31, --------------------- --------------------- % % (Dollars in thousands, except operating data) 1997 1996 Change 1997 1996 Change -------------------------------------------------------------- Citizens Communications Select Income Statement Data Revenues Network access services $ 103,972 $ 95,709 9% $ 405,202 $ 391,151 4% Local network services 65,367 60,606 8% 250,521 232,904 8% Long distance services 27,706 17,065 62% 103,702 59,072 76% Directory services 7,693 7,987 -4% 31,982 30,248 6% Other 13,056 9,130 43% 48,922 50,084 -2% Eliminations (1) (6,242) (5,156) (23,573) (11,250) Total revenues 211,552 185,341 14% 816,756 752,209 9% Cost of services (network expenses) 19,387 17,525 11% 96,303 61,432 57% Sales and marketing expenses 5,270 9,103 -42% 32,168 33,173 -3% Depreciation 47,034 40,136 17% 175,363 148,022 18% Other operating expenses 105,565 66,105 60% 399,693 290,328 38% Eliminations (1) (6,242) (5,156) (23,573) (11,250) Operating income 40,538 57,628 -30% 136,802 230,504 -41% Charges to earnings - - 142,723 - Operating income/(loss) including charges to earnings 40,538 57,628 -30% (5,921) 230,504 -103% Operating margin excluding charges to earnings 19% 31% 17% 31% Cash Flow and Capital Expenditure Data Operating cash flow (2) $ 87,572 $ 97,764 -10% $ 312,165 $ 378,526 -18% Capital expenditures 90,851 83,760 8% 263,011 184,041 43% Free cash flow (3) (3,279) 14,004 -123% 49,154 194,485 -75% Select Balance Sheet Data Total assets $ 2,379,936 $ 2,206,092 8% Net plant 2,024,220 1,843,298 10% Operating Data Access lines 873,800 834,180 5% Long distance customers-in territory 236,000 179,133 32% - out of territory 22,000 40,003 -45% - total 258,000 219,136 18% Employees 3,520 3,290 7% Revenue per access line $ 242 $ 228 6% $ 935 $ 902 4% Revenue per employee (in thousands) $ 60 $ 58 4% $ 232 $ 229 1% In-territory toll minutes of use (in millions) 1,147 1,100 4% 4,496 4,251 6% Citizens' long distance minutes of use (in millions) - in territory 121 83 46% 435 212 105% - out of territory 99 65 52% 414 174 138% - total long distance 220 148 49% 849 386 120% Citizens long distance in territory market share 20% 16%
(1) Eliminations represent network access revenues received by the Company's local exchange operations from its long-distance operations. (2) Operating income plus depreciation. This is the equivalent of sector EBITDA. (3) Operating cash flow less capital expenditures. Note: Quarter ended information is not presented where it is the same as year to date. 2 Citizens Utilities Company and Subsidiaries Financial and Operating Data by Service For the quarter ended For the Year Ended December 31, December 31, --------------------- ------------------ % % (Dollars in thousands, except operating data) 1997 1996 Change 1997 1996 Change -------------------------------------------------------------- CLEC (1) Select Income Statement Data Revenues Dedicated services $ 7,712 $ 4,971 55% $ 33,522 $ 19,947 68% Local dial tone services 6,155 753 717% 10,565 2,533 317% Long distance service 2,051 1,363 50% 8,140 7,232 13% Enhanced services 3,042 2,492 22% 8,857 5,705 55% Eliminations (2) (726) (438) (3,341) (1,319) Total revenues 18,234 9,141 99% 57,743 34,098 69% Cost of services (network expenses) 10,259 1,333 670% 29,546 15,782 87% Sales and marketing expenses 4,504 2,891 56% 13,905 9,650 44% Depreciation 4,515 2,269 99% 11,167 5,549 101% Other operating expenses 10,879 13,163 -17% 40,561 28,403 43% Eliminations (2) (726) (438) (3,341) (1,319) Operating loss (11,197) (10,077) 11% (34,095) (23,967) 42% Charges to earnings - - 10,765 - Operating loss including charges to earnings (11,197) (10,077) 11% (44,860) (23,967) 87% Cash Flow and Capital Expenditure Data Operating cash flow (3) $ (6,682) $ (7,808) 14% $ (22,928) $ (18,418) -24% Capital expenditures 55,908 11,461 163% 124,549 41,607 199% Free cash flow (4) (62,590) (19,269) -225% (147,477) (60,025) -146% Select Balance Sheet Data Total assets $ 359,962 $ 206,290 74% Gross plant- owned 316,109 156,738 102% - leased 87,426 62,485 40% - total 403,535 219,223 84% Operating Data Access line equivalents 34,328 8,779 291% Route miles 2,494 1,428 75% Fiber miles 140,812 97,665 44% Customers 1,165 763 53% Buildings connected 610 438 39% Employees 573 402 43% Revenue per employee $ 100,773 $ 84,821 19%
(1) The Company's Competitive Local Exchange Carrier ("CLEC") subsidiary, Electric Lightwave, Inc. (2) Eliminations reflect intercompany activity between the Company's CLEC and communications operations. (3) Operating loss plus depreciation. This is the equivalent of sector EBITDA. (4) Operating cash flow less capital expenditures. Note: Quarter ended information is not presented where it is the same as year to date. -3- Citizens Utilities Company and Subsidiaries Sector Financial and Operating Data For the quarter ended For the Year Ended December 31, December 31, --------------------- ------------------- % % (Dollars in thousands, except operating data) 1997 1996 Change 1997 1996 Change --------------------------------------------------------------- Citizens Public Services Select Income Statement Data Revenues Residential distribution $ 80,695 $ 77,905 4% $ 298,866 $ 285,626 5% Commercial distribution 43,565 32,833 33% 135,671 119,260 14% Industrial distribution 19,574 25,253 -22% 74,856 85,238 -12% Total distribution 143,834 135,991 6% 509,393 490,124 4% Transportation / transmission 1,475 3,349 -56% 5,314 7,858 -32% Other 3,773 5,470 -31% 25,180 22,228 13% Total revenues 149,082 144,810 3% 539,887 520,210 4% Cost of services (1) 67,092 68,373 -2% 234,626 221,104 6% Depreciation 11,573 10,853 7% 49,282 40,162 23% Other operating expenses 39,313 36,744 7% 151,754 169,795 -11% Operating income 31,104 28,840 8% 104,225 89,149 17% Charges to earnings - - 37,602 - Operating income including charges to earnings 31,104 28,840 8% 66,623 89,149 -25% Cash Flow and Capital Expenditure Data Operating cash flow (2) $ 42,677 $ 39,693 8% $ 153,507 $ 129,311 19% Capital expenditures 51,204 26,371 94% 103,595 73,330 41% Free cash flow (3) (8,527) 13,322 -164% 49,912 55,981 -11% Select Balance Sheet Data Total assets $ 1,580,181 $ 1,375,562 15% Net plant 1,269,271 1,096,928 16% Operating Data Customers 845,600 765,452 10% Employees 1,781 1,519 17% Customers per employee 475 504 -6%
(1) Natural gas, electric energy and fuel oil purchased. (2) Operating income plus depreciation. This is the equivalent of sector EBITDA. (3) Operating cash flow less capital expenditures. Note: Quarter ended information is not presented where it is the same as year to date. -4- Citizens Utilities Company and Subsidiaries Financial and Operating Data by Service For the quarter ended For the Year Ended December 31, December 31, ------------------- ------------------- % % (Dollars in thousands, except operating data) 1997 1996 Change 1997 1996 Change -------------------------------------------------------------- Citizens Public Services Natural Gas Select Income Statement Data Revenues Residential distribution $ 43,341 $ 40,305 8% $ 145,016 $ 134,888 8% Commercial distribution 25,801 14,745 75% 64,004 49,633 29% Industrial distribution 8,495 12,960 -34% 30,366 40,230 -25% Total distribution 77,637 68,010 14% 239,386 224,751 7% Transportation 803 2,841 -72% 2,622 5,519 -52% Other 808 2,283 -65% 10,090 9,349 8% Total revenues 79,248 73,134 8% 252,098 239,619 5% Cost of services (natural gas purchased) 45,302 45,456 0% 139,900 127,913 9% Gross margin 33,946 27,678 23% 112,198 111,706 0% Depreciation 3,672 3,271 12% 15,587 10,953 42% Other operating expenses 16,258 14,306 14% 54,704 66,997 -18% Operating income 14,016 10,101 39% 41,907 33,756 24% Charges to earnings - - 12,707 - Operating income/(loss) including charges to earnings 14,016 10,101 39% 29,200 33,756 -13% Operating margin excluding charges to earnings (1) 41% 36% 37% 30% Cash Flow and Capital Expenditure Data Operating cash flow (2) $ 17,688 $ 13,372 32% $ 57,494 $ 44,709 29% Capital expenditures 23,684 11,164 112% 47,880 27,691 73% Free cash flow (3) (5,996) 2,208 -372% 9,614 17,018 -44% Select Balance Sheet Data Total assets $ 530,696 $ 381,740 39% Net plant 423,533 281,220 51% Operating Data Customers 446,100 371,244 20% Employees 1,099 799 38% Customers per employee 406 465 -13% Billion Cubic Feet of gas throughput (BCF) 29.6 22.1 34% 80.3 73.9 9%
(1) Operating income divided by net revenues (i.e. gross margin). (2) Operating income plus depreciation. This is the equivalent of sector EBITDA. (3) Operating cash flow less capital expenditures. Note: Quarter ended information is not presented where it is the same as year to date. -5- Citizens Utilities Company and Subsidiaries Financial and Operating Data by Service For the quarter ended For the Year Ended December 31, December 31, --------------------- ------------------ % % (Dollars in thousands, except operating data) 1997 1996 Change 1997 1996 Change --------------------------------------------------------------- Citizens Public Services Electric Select Income Statement Data Revenues Residential distribution $ 19,544 $ 19,536 0% $ 83,108 $ 79,893 4% Commercial distribution 13,909 14,305 -3% 57,455 55,826 3% Industrial distribution 10,847 12,059 -10% 43,529 44,165 -1% Total distribution 44,300 45,900 -3% 184,092 179,884 2% Transmission 672 508 32% 2,692 2,339 15% Other 1,684 2,421 -30% 11,286 10,074 12% Total revenues 46,656 48,829 -4% 198,070 192,297 3% Cost of services (electric energy and fuel oil purchased) 21,790 22,917 -5% 94,726 93,191 2% Gross margin 24,866 25,912 -4% 103,344 99,106 4% Depreciation 5,428 5,509 -1% 22,195 18,718 19% Other operating expenses 8,796 9,164 -4% 45,372 55,583 -18% Operating income 10,642 11,239 -5% 35,777 24,805 44% Charges to earnings - - 22,054 - Operating income/(loss) including charges to earnings 10,642 11,239 -5% 13,723 24,805 -45% Operating margin excluding charges to earnings (1) 43% 43% 35% 25% Cash Flow and Capital Expenditure Data Operating cash flow (2) $ 16,070 $ 16,748 -4% $ 57,972 $ 43,523 33% Capital expenditures 12,095 6,670 81% 23,544 24,591 -4% Free cash flow (3) 3,975 10,078 -61% 34,428 18,932 82% Select Balance Sheet Data Total assets $ 492,926 $ 482,194 2% Net plant 388,162 393,475 -1% Operating Data Customers 111,800 109,802 2% Employees 302 345 -12% Customers per employee 370 318 16% Megawatt hours sold 397,349 401,286 -1% 1,655,121 1,691,384 -2% Megawatt hours generated 93,744 90,855 3% 353,390 352,261 0% Megawatt hours purchased 364,638 312,121 17% 1,533,584 1,395,073 10%
(1) Operating income divided by net revenues (i.e. gross margin). (2) Operating income plus depreciation. (3) Operating cash flow less capital expenditures. Note: Quarter ended information is not presented where it is the same as year to date. -6- Citizens Utilities Company and Subsidiaries Financial and Operating Data by Service For the quarter ended For the Year Ended December 31, December 31, --------------------- ------------------------ % % (Dollars in thousands, except operating data) 1997 1996 Change 1997 1996 Change Citizens Public Service ------------------------------------------------------------- Water/Wastewater Select Income Statement Data Revenues Residential distribution $ 17,810 $ 18,064 -1% $ 70,742 $ 70,845 0% Commercial distribution 3,855 3,783 2% 14,212 13,801 3% Industrial distribution 232 234 -1% 961 843 14% Other 1,281 766 67% 3,804 2,805 36% Total revenues 23,178 22,847 1% 89,719 88,294 2% Depreciation 2,473 2,073 19% 11,500 10,491 10% Other operating expenses 14,259 13,274 7% 51,678 47,215 9% Operating income 6,446 7,500 -14% 26,541 30,588 -13% Charges to earnings - - 2,841 - Operating income including charges to earnings 6,446 7,500 -14% 23,700 30,588 -23% Operating margin excluding charges to earnings (1) 28% 33% 29% 35% Cash Flow and Capital Expenditure Data Operating cash flow (2) $ 8,919 $ 9,573 -7% $ 38,041 $ 41,079 -7% Capital expenditures 15,425 8,537 81% 32,171 21,048 53% Free cash flow (3) (6,506) 1,036 -728% 5,870 20,031 -71% Select Balance Sheet Data Total assets $ 556,559 $ 511,628 9% Net plant 457,576 422,233 8% Operating Data Customers 287,700 284,406 1% Employees 380 375 1% Customers per employee 757 758 0% Billions of gallons of water delivered 6.9 7.4 -7% 31.4 32.5 -3% Billions of gallons of wastewater treated 1.1 1.4 -21% 5.0 5.6 -11%
(1) Operating income divided by net revenues (i.e. gross margin). (2) Operating income plus depreciation. This is the equivalent of sector EBITDA. (3) 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, 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. -7- -----END PRIVACY-ENHANCED MESSAGE-----