-----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, Npnmr9Zb4hzIO42E7OltdGxuLf9ToHL8FSO7NY3W++OQqtk5up+2Bud8J0ahqYy/ eaD0vuipZiEsOoqEWpNtPA== 0000020520-98-000007.txt : 19980507 0000020520-98-000007.hdr.sgml : 19980507 ACCESSION NUMBER: 0000020520-98-000007 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980331 ITEM INFORMATION: FILED AS OF DATE: 19980506 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: 98611770 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: May 5, 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.) 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 Utilities Company released May 5, 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: May 6, 1998 EX-99 2 PRESS RELEASE EXHIBIT 99.1 Citizens Utilities 3 High Ridge Park Stamford, CT 06905 203.614.5600 Web site: www.czn.net FOR IMMEDIATE RELEASE Contact: Alice Catalano (203)614-5185 acatalan@czn.com CITIZENS UTILITIES REPORTS FINANCIAL RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 1998 Stamford, Connecticut, May 5, 1998 -Citizens Utilities' announced today first quarter 1998 financial results. Robert J. DeSantis, Citizens Utilities' chief financial officer, reported that Citizens' Communications and Public Services revenues for the three months ended March 31, 1998 grew 5% to $384.7 million from the $365 million reported for the corresponding 1997 quarter. In addition, Electric Lightwave Inc., the company's competitive local exchange subsidiary, generated $19.2 million in revenues, a 91% increase over the $10.1 million reported for the first quarter 1997. Citizens' consolidated first quarter 1998 revenues were $403.9 million. Net income for the three months ended March 31, 1998 increased 8% to $39.5 million from $36.5 million for the first quarter 1997, excluding the impact of Electric Lightwave's losses. Electric Lightwave losses impacted Citizens' first quarter 1998 net income by $10.3 million as compared to a $5.9 million impact in the prior year first quarter. Earnings per share for the quarter ended March 31, 1998 increased 14% to 16 cents from 14 cents for the prior year period, excluding the impact of Electric Lightwave's losses. Electric Lightwave's first quarter loss per Citizens share was 4 cents compared to 2 cents for the first quarter of 1997. Citizens consolidated earnings and earnings per share before the cumulative effect of a change in accounting principle for Electric Lightwave were $29.1 million and 12 cents, respectively. Citizens also reported a $2.3 million after-tax charge to reflect a cumulative effect of a change in accounting principle for Electric Lightwave. Mr. DeSantis stated that, "Citizens Communications operating income increased 6% to $38 million for the quarter ended March 31, 1998 from $36 million for the first quarter 1997 despite a reduction in first quarter 1998 operating income due to access charge/price cap and universal service fund reforms." Mr. DeSantis added, "Citizens Communications continues to experience strong year over year internal growth as evidenced by its above industry average access line growth of 5%. Access lines at March 31, 1998 were 883,000 while in territory long distance customers increased to 231,000, a 26% market share." Commenting on Citizens Public Services, Mr. DeSantis stated, "Citizens Public Services revenues and customers both grew 10% over prior year to $179 million and 851,000, respectively. Citizens Public Services operating income decreased to $32.5 million for the quarter ended March 31, 1998 from $35.3 million for the first quarter 1997, reflecting the impact of certain rate reductions." Mr. DeSantis stated that, "Electric Lightwave's 91% revenue growth for the first quarter 1998 was attributable to local dial tone services and enhanced services such as frame relay and internet. Owned and leased gross property plant and equipment at quarter end totaled $457 million as compared to $256 million a year earlier." 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 21 states. Citizens owns 83% of Electric Lightwave, Inc.,(NASDAQ:ELIX), a leading full-service, facilities-based integrated communications services provider and has a significant investment in Centennial Cellular Corp. (NASDAQ:CYCL), a cellular telephone company. (table follows)
Citizens Utilities Company and Subsidiaries Consolidated Financial Data (Unaudited) For the quarter ended March 31, ---------------------------------- % (Dollars in thousands, except per share data) 1998 1997 Change ------------------------------------------------- Income Statement Data Revenues $ 403,863 $ 375,091 8% Cost of services 108,032 105,990 2% Sales and marketing expenses 9,049 15,825 -43% Depreciation and amortization 63,597 57,015 12% Other operating expenses 166,907 133,430 25% Operating income 56,278 62,831 -10% Investment and other income 12,691 12,150 4% Interest expense 26,806 27,009 -1% Income taxes 11,498 15,836 -27% Convertible preferred dividends 1,552 1,552 0% Net income before cumulative effect of change in accounting principle 29,113 30,584 -5% Cumulative effect of change in accounting principle for ELI, net of tax 2,334 - Net income after cumulative effect of change in accounting principle 26,779 30,584 Net income excluding ELI 39,454 36,485 8% Per-Share Data (1) Basic net income per share of common stock (2) $ 0.12 $ 0.12 0% Basic net income per share of common stock excluding ELI $ 0.16 $ 0.14 14% Weighted average shares 253,151 255,677 -1% (1) Adjusted for subsequent stock dividends and stock splits and used in the calculation of all per share data. (2) Excludes cumulative effect of change in ELI's accounting principle.
EX-99 3 FINANCIAL AND OPERATING DATA
EXHIBIT 99.2 Citizens Utilities Company and Subsidiaries Consolidated Financial Data (unaudited) For the quarter ended March 31, ------------------------- % (Dollars in thousands) 1998 1997 Change ------------------------------------- Income Statement Data Revenues $ 403,863 $ 375,091 8% Cost of services 108,032 105,990 2% Sales and marketing expenses 9,049 15,825 -43% Depreciation and amortization 63,597 57,015 12% Other operating expenses 166,907 133,430 25% Operating income 56,278 62,831 -10% Investment and other income 12,691 12,150 4% Interest expense 26,806 27,009 -1% Income taxes 11,498 15,836 -27% Convertible preferred dividends 1,552 1,552 0% Net income before cumulative effect of change in accounting principle 29,113 30,584 -5% Cumulative effect of change in accounting principle for ELI, net of tax 2,334 - Net income after cumulative effect of change in accounting principle 26,779 30,584 Net income excluding ELI 39,454 36,485 8% Cash Flow and Capital Expenditure Data EBITDA (1) $ 132,566 $ 131,996 0% Cash flow from operations 81,438 64,092 27% Capital expenditures 74,334 73,768 1% Free cash flow 7,104 (9,676) 173% EBITDA excluding ELI (1) 142,912 137,889 4% Cash flow from operations excluding ELI 87,979 69,654 26% Capital expenditures excluding ELI 51,152 68,073 -25% Free cash flow excluding ELI 36,827 1,581 2229% Select Balance Sheet Data Cash and investments $ 499,943 $ 543,697 -8% Total assets 4,939,831 4,540,353 9% Net plant 3,675,289 3,161,629 16% Long-term debt 1,789,683 1,554,855 15% Equity (2) 1,919,835 1,896,594 1% Shares of common stock outstanding 253,425 242,300 5% Weighted average shares outstanding (3) 253,151 255,677 -1% Per-Share Data (3) Basic net income per share of common stock (4) $ .12 $ .12 0% Basic net income per share of common stock excluding ELI (4) $ .16 $ .14 14% Operating cash flow per share $ .32 $ .25 28% Operating cash flow per share excluding ELI $ .35 $ .27 30% Book value per share $ 6.79 $ 6.63 2% Other Financial Data Long-term debt to long-term debt and equity 48% 45% Long-term debt to long-term debt and equity excluding ELI 47% 45% Interest coverage (5) 4.9x 4.9x Interest coverage excluding ELI (5) 5.3x 5.1x Common equity market capitalization (in billions) $ 2.7 $ 2.8 Equity market capitalization (in billions) (6) $ 2.9 $ 3.0 Market capitalization (in billions) (7) $ 4.7 $ 4.6 ELI public enterprise value (in billions) (8) $ 1.1 n/a (1) Earnings before interest expense, income taxes, depreciation and amortization. (2) Includes convertible preferred securities. (3) Adjusted for subsequent stock dividends and stock splits and used in the calculation of all per share data. (4) Excludes cumulative effect of change in accounting principle for ELI. (5) EBITDA divided by interest expense. (6) Includes market value of convertible preferred securities. (7) Equity market capitalization plus market value of long-term debt. (8) Includes common equity market capitalization plus net debt. 1 Citizens Utilities Company and Subsidiaries Financial and Operating Data by Service For the quarter ended March 31, ------------------------- % (Dollars in thousands, except operating data) 1998 1997 Change -------------------------------------- Citizens Communications Select Income Statement Data Revenues Network access services $ 103,886 $ 102,070 2% Local network services 63,418 60,794 4% Long distance services 26,778 24,988 7% Directory services 7,783 7,583 3% Other 11,296 12,416 -9% Eliminations (1) (7,803) (5,439) Total revenues 205,358 202,412 1% Cost of services (network expenses) 26,560 26,470 0% Sales and marketing expenses 4,109 12,920 -68% Depreciation 45,155 41,868 8% Other operating expenses 100,164 91,396 10% Eliminations (1) (8,678) (6,235) Operating income 38,048 35,993 6% EBITDA margin 41% 38% Operating margin 19% 18% Cash Flow and Capital Expenditure Data Operating cash flow (2) $ 83,203 $ 77,861 7% Capital expenditures 36,146 50,152 -28% Free cash flow (3) 47,057 27,709 70% Select Balance Sheet Data Total assets $ 2,229,491 $2,201,148 1% Net plant 1,999,457 1,854,542 8% Operating Data Access lines 883,000 844,000 5% Long distance customers - in territory 231,000 190,000 22% - out of territory 22,000 35,000 -37% - total 253,000 225,000 12% Revenue per access line $ 233 $ 240 -3% In-territory toll minutes of use (in millions) 1,191 1,107 8% Citizens' long distance minutes of use (in millions) - in territory 123 93 32% - out of territory 82 103 -20% - total long distance 205 196 5% Citizens' long distance in territory minutes of use market share 18% 18% Citizens' long distance in territory customer market share 26% 23% (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. 2 Citizens Utilities Company and Subsidiaries Financial and Operating Data by Service For the quarter ended March 31, ------------------------- % (Dollars in thousands, except operating data) 1998 1997 Change ------------------------------------- Electric Lightwave, Inc. (1) Select Income Statement Data Revenues Dedicated services $ 9,107 $ 6,082 50% Local dial tone services 6,024 1,245 384% Long distance service 1,822 1,678 9% Enhanced services 3,104 1,843 68% Eliminations (2) (875) (796) Total revenues 19,182 10,052 91% Cost of services (network expenses) 9,212 4,996 84% Gross margin 9,970 5,056 97% Sales and marketing expenses 4,940 2,905 70% Depreciation 3,884 2,522 54% Other operating expenses 15,376 8,044 91% Operating loss (14,230) (8,415) 69% Cash Flow and Capital Expenditure Data Operating cash flow (3) $(10,346) $ (5,893) 76% Capital expenditures 23,182 5,695 307% Free cash flow (4) (33,528) (11,588) 189% Select Balance Sheet Data Total assets $373,374 $175,323 113% Gross plant - owned 352,062 190,818 85% - leased 105,226 65,363 61% - total 457,288 256,181 79% Operating Data Route miles 2,525 1,490 69% Fiber miles 145,350 96,609 50% Customers 1,226 861 42% Buildings connected 631 460 37% Employees 670 463 45% Revenue per employee $ 28,630 $ 21,711 32% (1) The Company's facilities based Competitive Local Exchange Carrier ("CLEC") subsidiary, Electric Lightwave, Inc ("ELI"). (2) Eliminations reflect intercompany activity between the Company's ELI and communications operations. (3) Operating loss plus depreciation. This is the equivalent of sector EBITDA. (4) Operating cash flow less capital expenditures. 3 Citizens Utilities Company and Subsidiaries Sector Financial and Operating Data For the quarter ended March 31, --------------------------- % (Dollars in thousands, except operating data) 1998 1997 Change ----------------------------------- Citizens Public Services Select Income Statement Data Revenues Residential distribution $ 99,295 $ 97,288 2% Commercial distribution 51,850 37,219 39% Industrial distribution 17,719 19,347 -8% Total distribution 168,864 153,854 10% Transportation / transmission 1,523 1,625 -6% Other 8,936 7,148 25% Total revenues 179,323 162,627 10% Cost of services (1) 80,938 80,759 0% Gross margin 98,385 81,868 20% Depreciation 14,558 12,625 15% Other operating expenses 51,367 33,990 51% Operating income 32,460 35,253 -8% Operating margin (2) 33% 43% Cash Flow and Capital Expenditure Data Operating cash flow (3) $ 47,018 $ 47,878 -2% Capital expenditures 9,864 12,610 -22% Free cash flow (4) 37,154 35,268 5% Select Balance Sheet Data Total assets $ 1,627,873 $ 1,383,007 18% Net plant 1,261,850 1,099,915 15% Operating Data Customers 851,230 773,020 10% Employees 1,721 1,458 18% Net revenue (gross margin) per employee 57 56 2% (1) Natural gas, electric energy and fuel oil purchased. (2) Operating income divided by net revenues (i.e. gross margin). (3) Operating income plus depreciation. This is the equivalent of sector EBITDA. (4) Operating cash flow less capital expenditures. 4 Citizens Utilities Company and Subsidiaries Financial and Operating Data by Service For the quarter ended March 31, ------------------------- % (Dollars in thousands, except operating data) 1998 1997 Change ------------------------------------- Citizens Public Services Natural Gas Select Income Statement Data Revenues Residential distribution $ 62,103 $ 60,396 3% Commercial distribution 35,778 21,063 70% Industrial distribution 7,432 8,290 -10% Total distribution 105,313 89,749 17% Transportation 952 1,080 -12% Other 5,318 3,954 34% Total revenues 111,583 94,783 18% Cost of services (natural gas purchased) 59,194 58,569 1% Gross margin 52,389 36,214 45% Depreciation 5,507 3,940 40% Other operating expenses 25,040 11,802 112% Operating income 21,842 20,472 7% Operating margin (1) 42% 57% Cash Flow and Capital Expenditure Data Operating cash flow (2) $ 27,349 $ 24,412 12% Capital expenditures 5,384 5,195 4% Free cash flow (3) 21,965 19,217 14% Select Balance Sheet Data Total assets $ 566,795 $ 381,117 49% Net plant 409,621 282,634 45% Operating Data Customers 448,886 373,879 20% Employees 1,066 792 35% Customers per employee 421 472 -11% Net revenue (gross margin) per employee 49 46 7% Billion Cubic Feet of gas throughput (BCF) 37.2 26.8 39% (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. 5 Citizens Utilities Company and Subsidiaries Financial and Operating Data by Service For the quarter ended March 31, ------------------------- % (Dollars in thousands, except operating data) 1998 1997 Change ------------------------------------- Citizens Public Services Electric Select Income Statement Data Revenues Residential distribution $ 20,779 $ 20,654 1% Commercial distribution 13,164 13,437 -2% Industrial distribution 10,077 10,848 -7% Total distribution 44,020 44,939 -2% Transmission 571 545 5% Other 2,683 2,418 11% Total revenues 47,274 47,902 -1% Cost of services (electric energy and fuel oil purchased) 21,744 22,190 -2% Gross margin 25,530 25,712 -1% Depreciation 5,867 5,590 5% Other operating expenses 13,110 10,894 20% Operating income 6,553 9,228 -29% Operating margin (1) 26% 36% Cash Flow and Capital Expenditure Data Operating cash flow (2) $ 12,420 $ 14,818 -16% Capital expenditures 1,153 3,451 -67% Free cash flow (3) 11,267 11,367 -1% Select Balance Sheet Data Total assets $ 489,883 $ 481,985 2% Net plant 382,479 391,039 -2% Operating Data Customers 112,900 110,330 2% Employees 296 304 -3% Customers per employee 381 363 5% Net revenue (gross margin) per employee 86 85 2% Megawatt hours sold 419,366 399,409 5% Megawatt hours generated 99,260 91,902 8% Megawatt hours purchased 341,374 334,504 2% (1) Operating income divided by net revenues (i.e. gross margin). (2) Operating income plus depreciation. (3) Operating cash flow less capital expenditures. 6 Citizens Utilities Company and Subsidiaries Financial and Operating Data by Service For the quarter ended March 31, ------------------------ % (Dollars in thousands, except operating data) 1998 1997 Change -------------------------------- Citizens Public Services Water/Wastewater Select Income Statement Data Revenues Residential distribution $ 16,413 $ 16,238 1% Commercial distribution 2,908 2,719 7% Industrial distribution 210 209 0% Other 935 776 20% Total revenues 20,466 19,942 3% Depreciation 3,184 3,095 3% Other operating expenses 13,217 11,294 17% Operating income 4,065 5,553 -27% Operating margin (1) 20% 28% Cash Flow and Capital Expenditure Data Operating cash flow (2) $ 7,249 $ 8,648 -16% Capital expenditures 3,327 3,964 -16% Free cash flow (3) 3,922 4,684 -16% Select Balance Sheet Data Total assets $ 571,195 $ 519,905 10% Net plant 469,750 426,242 10% Operating Data Customers 289,444 288,811 0% Employees 359 362 -1% Customers per employee 806 798 1% Revenue per employee 57 55 3% Billions of gallons of water delivered 5.4 5.5 -2% Billions of gallons of wastewater treated 1.5 1.5 0% (1) Operating income divided by revenues. (2) Operating income plus depreciation. This is the equivalent of sector EBITDA. (3) Operating cash flow less capital expenditures. 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 and Form 10-Q for the three months ended March 31, 1998 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-----