-----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, TbAXeU9qic545UBqbMAIPFe81HyhiDH8XhNVp5UIfFVw2BUDJOGadd99jR/9BbbH 2KiJ2td2xBk9dvNVSRpLFQ== 0000020520-99-000016.txt : 19990806 0000020520-99-000016.hdr.sgml : 19990806 ACCESSION NUMBER: 0000020520-99-000016 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990630 ITEM INFORMATION: FILED AS OF DATE: 19990805 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: 99678564 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 4, 1999 (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 August 4, 1999 announcing second quarter earnings. 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/ Robert J. DeSantis ----------------------------- Robert J. DeSantis Chief Financial Officer, Vice President and Treasurer Date: August 5, 1999 EX-99 2 PRESS RELEASE ANNOUNCING SECOND QUARTER RESULTS Exhibit 99.1 CITIZENS UTILITIES REPORTS SECOND QUARTER 1999 FINANCIAL RESULTS
o Revenue Increased 13% o Citizens Communications' Operating Income Grew 17% o Electric Lightwave's Operating And EBITDA Performance Improved Over Prior Quarter
STAMFORD, Conn., August 4, 1999 - Citizens Utilities (NYSE: CZN, CZNPr) - ----------------------------------- announced today financial results for the quarter and six months ended June 30, 1999. Revenues for the quarter grew 13% to $415 million from the $366 million reported for the corresponding 1998 quarter. This increase was driven by strong revenue growth in the company's telecommunications businesses. Net income for the second quarter of 1999 was $7.8 million, compared to $14.5 million for the prior year quarter. These reported figures were impacted by several special items and losses from Electric Lightwave Inc., Citizens' competitive local exchange subsidiary. Absent special items and Electric Lightwave losses, net income was $27 million compared to $21.9 million for the prior year quarter. Earnings per share for the second quarter 1999 were 3 cents compared to 6 cents in the prior year quarter. Excluding special items and Electric Lightwave's losses, earnings per share were 10 cents compared to 8 cents in the prior year quarter. For the six months ended June 30, 1999, net income and earnings per share were $62.4 million and 24 cents respectively, as compared to $41.2 million and 16 cents for the 1998 period. Commenting on second quarter 1999 financial results, Citizens' chief financial officer Robert J. DeSantis said, "We are pleased with the financial performance of our Communications sector. Second quarter Communications revenues increased 12% to $229 million compared to $204 million for the prior year quarter. Communications' operating income excluding one-time expenses related to Y2K and separation was $46.7 million -- a 17% increase over the prior year quarter. In addition, Communications' operating and free cash flow both improved significantly over the prior year quarter, increasing 14% and 13%, to $98.3 million and $46.2 million respectively. "Our Public Services businesses continued to show both operating and cash flow growth despite the adverse impact of warmer weather on revenues. Second quarter revenues totaled $141 million versus $142 million for the prior year quarter. Public Services operating income excluding Y2K and separation expense was $19.2 million or 6% higher than the year ago quarter, while operating cash flow increased 9% to $35.9 million over the second quarter of 1998. "Electric Lightwave's financial results improved significantly during the quarter. Electric Lightwave's operating loss was $24.2 million, an 18% improvement, and its EBITDA loss was $16.0 million, a 29% improvement, as compared to the first quarter of 1999. Electric Lightwave continued its double-digit sequential quarterly revenue growth. Revenues grew 21% to $45 million over the 1999 first quarter, primarily driven by increases in local dial tone services and long distance services revenues. These improvements should continue throughout the year. Electric Lightwave's owned and leased gross property, plant and equipment at quarter end totaled $802 million. "Citizens continues to concentrate on growing its telecommunications businesses. Citizens announced in May and June that it has agreed to purchase approximately 730,000 telephone access lines from GTE and U S WEST. Citizens intends to permanently fund these acquisitions with proceeds from the sale of its Public Services businesses." The company recently appointed the investment banking firm Morgan Stanley Dean Witter as financial advisor for the divestiture of the company's Public Services businesses in gas distribution, electric distribution, water distribution and wastewater treatment. Citizens Utilities provides telecommunications services and public services including gas distribution, electric distribution, water distribution and wastewater treatment services to approximately 1.9 million customers in 22 states. 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 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, the company's ability to obtain the necessary regulatory and tax approvals and complete the separation process, changes in the local and overall economy, changes in market conditions for debt and equity securities, the nature and pace of technological changes, the number and effectiveness of competitors in the company's markets, success in overall strategy, weather conditions, changes in legal or regulatory policy, changes in legislation, the company's ability to identify future markets and successfully expand existing ones and the mix of products and services offered in the company's target 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 has no obligation to update or revise these forward-looking statements to reflect the occurrence of future events or circumstances. (Table follows) 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, except per share data) 1999 1998 Change 1999 1998 Change -------------------------------- ------------------------------- Income Statement Data Revenues $ 414,847 $ 366,347 13% $ 852,361 $ 770,210 11% Cost of services 89,617 80,695 11% 197,299 188,727 5% Depreciation and amortization 76,484 64,765 18% 152,125 128,362 19% Other operating expenses 207,099 178,982 16% 418,548 354,538 18% Operating income 41,647 41,905 -1% 84,389 98,583 -14% Special items (1) (10,226) (400) (16,645) (800) Operating income including special items 31,421 41,505 -24% 67,744 97,783 -31% Investment and other income 12,037 10,736 12% 23,723 23,457 1% Interest expense 30,553 28,589 7% 60,366 55,395 9% Special items (2) - - 69,499 (2,334) Income taxes 3,600 7,638 -53% 35,118 19,166 83% Convertible preferred dividends 1,552 1,552 0% 3,104 3,104 0% Net income as reported 7,753 14,462 -46% 62,378 41,241 51% Net income excluding special items 15,439 14,668 5% 31,634 44,069 -28% Net income excluding special items and ELI 27,265 21,826 25% 56,901 57,070 0% Per-Share Data (3) Basic net income per share of common stock as reported $ 0.03 $ 0.06 -50% $ 0.24 $ 0.16 50% Basic net income per share of common stock excluding special items $ 0.06 $ 0.06 0% $ 0.12 $ 0.17 -29% Basic net income per share of common stock excluding special items and ELI $ 0.10 $ 0.08 25% $ 0.22 $ 0.22 0% Weighted average shares outstanding (3) 260,143 259,619 0% 259,775 259,339 0% (1) Special items consist of Y2K and separation costs. (2) In the first quarter of 1999, the Company recorded a pre-tax gain of $69.5 million ($42.9 million net of tax) on the sale of Centennial Cellular stock. In the first quarter of 1998, Electric Lightwave, Inc. recorded a pre-tax charge to earnings of $2.8 million ($2.3 million net of tax) for the cumulative effect of a change in accounting principle. (3) Adjusted for subsequent stock dividends and stock splits and used in the calculation of all per share data.
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) 1999 1998 Change 1999 1998 Change ------------------------------- ------------------------------- Income Statement Data Revenues $ 414,847 $ 366,347 13% $ 852,361 $ 770,210 11% Cost of services 89,617 80,695 11% 197,299 188,727 5% Depreciation and amortization 76,484 64,765 18% 152,125 128,362 19% Other operating expenses 207,099 178,982 16% 418,548 354,538 18% Operating income 41,647 41,905 -1% 84,389 98,583 -14% Special items (1) (10,226) (400) (16,645) (800) Operating income including special items 31,421 41,505 -24% 67,744 97,783 -31% Investment and other income 12,037 10,736 12% 23,723 23,457 1% Interest expense 30,553 28,589 7% 60,366 55,395 9% Special items (2) - - 69,499 (2,334) Income taxes 3,600 7,638 -53% 35,118 19,166 83% Convertible preferred dividends 1,552 1,552 0% 3,104 3,104 0% Net income as reported 7,753 14,462 -46% 62,378 41,241 51% Net income excluding special items 15,439 14,668 5% 31,634 44,069 -28% Net income excluding special items and ELI 27,265 21,826 25% 56,901 57,070 0% Cash Flow and Capital Expenditure Data (excluding special items) EBITDA (3) $ 130,168 $ 117,405 11% $ 260,237 $ 250,402 4% EBITDA excluding ELI (3) 140,503 126,664 11% 287,130 267,923 7% Cash flow from operations 66,076 75,191 -12% 256,525 156,876 64% Cash flow from operations excluding ELI 94,954 81,672 16% 311,980 169,898 84% Capital expenditures 147,398 127,069 16% 267,494 201,403 33% Capital expenditures excluding ELI 87,047 70,454 24% 150,143 121,606 23% Free cash flow (4) (81,322) (51,878) -57% (10,969) (44,527) 75% Free cash flow excluding ELI (4) 7,907 11,218 -30% 161,837 48,292 235% Select Balance Sheet Data Cash and investments $ 463,358 $ 504,434 -8% Total assets 5,470,489 4,967,067 10% Net plant 4,217,990 3,736,533 13% Long-term debt 2,106,514 1,776,918 19% Equity (5) 2,052,016 1,958,754 5% Shares of common stock outstanding 260,400 256,211 2% Weighted average shares outstanding (6) 260,143 259,619 0% 259,775 259,339 0% Per-Share Data (6) Basic net income per share of common stock as reported $ 0.03 $ 0.06 -50% $ 0.24 $ 0.16 50% Basic net income per share of common stock excluding special items $ 0.06 $ 0.06 0% $ 0.12 $ 0.17 -29% Basic net income per share of common stock excluding special items and ELI $ 0.10 $ 0.08 25% $ 0.22 $ 0.22 0% Operating cash flow per share $ 0.23 $ 0.29 -21% $ 0.95 $ 0.60 58% Operating cash flow per share excluding special items $ 0.25 $ 0.29 -14% $ 0.99 $ 0.60 65% Operating cash flow per share excluding special items and ELI $ 0.37 $ 0.31 19% $ 1.20 $ 0.66 82% Book value per share $ 7.12 $ 6.78 5% Other Financial Data Long-term debt to long-term debt and equity 51% 48% Long-term debt to long-term debt and equity excluding ELI 44% 45% Interest coverage (7) 4.3x 4.1x 4.3x 4.5x Interest coverage excluding ELI (7) 4.6x 4.4x 4.8x 4.8x Common equity market capitalization (in billions) $ 2.9 $ 2.4 Equity market capitalization (in billions) (8) $ 3.1 $ 2.6 Market capitalization (in billions) (9) $ 5.2 $ 4.4 ELI public enterprise value (in billions) (10) $ 1.2 $ 0.7 (1) Special items consist of Y2K and separation costs. (2) In the first quarter of 1999, the Company ecorded a pre-tax gain of $69.5 million ($42.9 million net of tax) on the sale of Centennial Cellular stock. In the first quarter of 1998, Electric Lightwave, Inc. recorded a pre-tax charge to earnings of $2.8 million ($2.3 million net of tax) for the cumulative effect of a change in accounting principle. (3) Earnings before interest expense, income taxes, depreciation and amortization (excludes special items). (4) Cash flow from operations less capital expenditures. (5) Includes convertible preferred securities. (6) Adjusted for subsequent stock dividends and stock splits and used in the calculation of all per share data. (7) EBITDA divided by interest expense excluding special items. (8) Includes market value of convertible preferred securities. (9) Equity market capitalization plus market value of long-term debt. (10) Includes common equity market capitalization plus net debt.
Page 1 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) 1999 1998 Change 1999 1998 Change -------------------------------- ---------------------------------- Citizens Communications - ----------------------- Select Income Statement Data Revenues Network access services $ 128,524 $ 104,121 23% $ 257,204 $ 208,007 24% Local network services 72,079 64,896 11% 141,992 128,314 11% Long distance services 19,832 21,409 -7% 40,933 48,187 -15% Directory services 8,375 8,025 4% 16,772 15,808 6% Other 12,180 12,980 -6% 21,974 24,276 -9% Eliminations (1) (12,369) (7,623) (23,022) (15,426) Total revenues 228,621 203,808 12% 455,853 409,166 11% Cost of services (network expenses) 23,331 20,131 16% 43,853 46,691 -6% Depreciation 51,613 46,120 12% 106,504 91,275 17% Other operating expenses 120,142 110,142 9% 242,234 209,323 16% Eliminations (1) (13,139) (7,623) (24,490) (16,301) Operating income 46,674 39,856 17% 87,752 78,178 12% Special items (2) (6,589) (274) (10,359) (548) Operating income including special items 40,085 39,582 1% 77,393 77,630 0% Operating margin 20% 20% 19% 19% Cash Flow and Capital Expenditure Data Operating cash flow (3) $ 98,287 $ 85,976 14% $ 194,256 $ 169,453 15% Capital expenditures 52,125 45,207 15% 90,609 81,353 11% Free cash flow (4) 46,162 40,769 13% 103,647 88,100 18% EBITDA margin (5) 43% 42% 43% 41% Select Balance Sheet Data Total assets $ 2,404,110 $ 2,266,081 6% Net plant 2,107,008 2,007,050 5% Operating Data Access lines 974,379 918,428 6% Revenue per access line $ 235 $ 222 6% $ 468 $ 446 5% In-territory access minutes of use (in millions) 1,277 1,126 13% 2,517 2,317 9% Citizens' long distance minutes of use (in millions) - in territory 127 119 7% 252 242 4% - out of territory 23 61 -62% 51 143 -64% - total long distance 150 180 -17% 303 385 -21% Citizens' long distance in territory minutes of use market share 17% 22% (1) Eliminations represent network access revenues received by the Company's local exchange operations from its long-distance and competitive local exchange operations. (2) Special items include Y2K and separation costs. (3) Operating income excluding special items plus depreciation. This is the equivalent of sector EBITDA. (4) Operating cash flow less capital expenditures. (5) Operating cash flow divided by total revenues.
Page 2 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 1999 1998 Change 1999 1998 Change operating data) ----------------------------------- ----------------------------------- Electric Lightwave, Inc. (1) Select Income Statement Data Revenues Dedicated services $ 12,983 $ 8,371 55% $ 23,407 $ 17,478 34% Local dial tone services 18,600 7,769 139% 32,908 13,793 139% Long distance service 9,245 1,899 387% 17,775 3,721 378% Enhanced services 5,267 3,404 55% 10,221 6,508 57% Eliminations (1) (770) (740) (1,468) (1,615) Total revenues 45,325 20,703 119% 82,843 39,885 108% Cost of services (network expenses) 23,702 9,120 160% 48,926 18,332 167% Gross margin 21,623 11,583 87% 33,917 21,553 57% Depreciation 8,150 3,780 116% 15,144 7,664 98% Other operating expenses 37,651 23,894 58% 72,496 44,210 64% Operating loss (24,178) (16,091) -50% (53,723) (30,321) -77% Special items (2) (936) - (1,567) - Operating loss including special items (25,114) (16,091) -56% (55,290) (30,321) -82% Cash Flow and Capital Expenditure Data Operating cash flow (3) $ (16,028) $ (12,311) -30% $ (38,579) $ (22,657) -70% Capital expenditures (4) 60,351 56,615 7% 117,351 79,797 47% Free cash flow (5) (76,379) (68,926) -11% (155,930) (102,454) -52% Select Balance Sheet Data Total assets $ 693,494 $ 395,003 76% Gross plant - owned 693,449 396,080 75% - leased 108,541 108,541 0% - total 801,990 504,621 59% Operating Data Route miles 3,128 2,656 18% Fiber miles 192,213 153,002 26% Customers 1,961 1,330 47% Buildings connected 795 682 17% Employees 1,233 841 47% Revenue per employee $ 36,760 $ 24,617 49% $ 67,188 $ 47,426 42% (1) The Company's facilities based Competitive Local Exchange Carrier (CLEC) subsidiary, Electric Lightwave, Inc (ELI). Eliminations reflect intercompany activity between the Company's CLEC and communications operations. (2) Special items include Y2K and separation costs. (3) Operating loss excluding special items plus depreciation. This is the equivalent of sector EBITDA. (4) Excludes non-cash capital lease additions of $47,715. (5) Operating cash flow less capital expenditures.
Page 3 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) 1999 1998 Change 1999 1998 Change --------------------------------------- --------------------------------------- Citizens Public Services Select Income Statement Data Revenues Residential distribution $ 65,749 $ 68,813 -4% $ 155,643 $ 168,108 -7% Commercial distribution 40,612 42,586 -5% 89,033 94,436 -6% Industrial distribution 19,737 22,008 -10% 44,267 39,727 11% Municipal distribution 2,622 2,863 -8% 5,866 6,603 -11% Total distribution 128,720 136,270 -6% 294,809 308,874 -5% Transportation / transmission 4,071 1,357 200% 6,003 2,880 108% Other 8,110 4,209 93% 12,853 9,405 37% Total revenues 140,901 141,836 -1% 313,665 321,159 -2% Cost of services (1) 55,723 59,067 -6% 129,010 140,005 -8% Gross margin 85,178 82,769 3% 184,655 181,154 2% Depreciation 16,721 14,865 12% 30,477 29,423 4% Other operating expenses 49,306 49,764 -1% 103,818 101,005 3% Operating income 19,151 18,140 6% 50,360 50,726 -1% Special items (2) (2,701) (126) (4,719) (252) Operating income including special items 16,450 18,014 -9% 45,641 50,474 -10% Cash Flow and Capital Expenditure Data Operating cash flow (3) $ 35,872 $ 33,005 9% $ 80,837 $ 80,149 1% Capital expenditures 28,837 20,204 43% 52,338 30,068 74% Free cash flow (4) 7,035 12,801 -45% 28,499 50,081 -43% Select Balance Sheet Data Total assets $ 1,628,803 $ 1,600,326 2% Net plant 1,362,013 1,269,837 7% Operating Data Customers 886,034 854,339 4% Employees 1,822 1,709 7% Customers per employee 486 500 -3% Gross margin (net revenue) per employee $ 46,750 $ 48,431 -3% $ 101,347 $ 106,000 -4% (1) Natural gas, electric energy and fuel oil purchased. (2) Special items include Y2K and separation costs. (3) Operating income excluding special items plus depreciation. This is the equivalent of sector EBITDA. (4) Operating cash flow less capital expenditures.
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) 1999 1998 Change 1999 1998 Change ------------------------------------ ------------------------------------ Citizens Public Services Gas - --- Select Income Statement Data Revenues Residential distribution $ 29,164 $ 33,297 -12% $ 81,138 $ 95,400 -15% Commercial distribution 21,550 25,970 -17% 53,236 61,748 -14% Industrial distribution 8,652 12,138 -29% 23,691 19,570 21% Municipal distribution 656 827 -21% 1,922 2,672 -28% Total distribution 60,022 72,232 -17% 159,987 179,390 -11% Transportation 4,023 440 814% 5,050 1,392 263% Other 4,910 2,946 67% 7,874 6,419 23% Total revenues 68,955 75,618 -9% 172,911 187,201 -8% Cost of services (gas purchased) 32,850 38,973 -16% 85,554 98,167 -13% Gross margin 36,105 36,645 -1% 87,357 89,034 -2% Depreciation 6,621 5,752 15% 10,901 11,259 -3% Other operating expenses 23,428 24,062 -3% 50,727 49,040 3% Operating income 6,056 6,831 -11% 25,729 28,735 -10% Special items (1) (762) (62) (1,599) (124) Operating income including special items 5,294 6,769 -22% 24,130 28,611 -16% Cash Flow and Capital Expenditure Data Operating cash flow (2) $ 12,677 $ 12,583 1% $ 36,630 $ 39,994 -8% Capital expenditures 10,415 8,538 22% 26,280 13,922 89% Free cash flow (3) 2,262 4,045 -44% 10,350 26,072 -60% Select Balance Sheet Data Total assets $ 546,431 $ 545,836 0% Net plant 464,122 415,634 12% Operating Data Customers 461,467 449,690 3% Employees 927 923 0% Customers per employee 498 487 2% Gross margin (net revenue) per employee $ 38,948 $ 39,702 -2% $ 94,236 $ 96,462 -2% Billion Cubic Feet of gas throughput (BCF) 13.3 14.1 -6% 37.9 36.8 3% (1) Special items include Y2K and separation costs. (2) Operating income excluding special items plus depreciation. This is the equivalent of sector EBITDA. (3) Operating cash flow less capital expenditures.
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) 1999 1998 Change 1999 1998 Change ----------------------------------- ---------------------------------- Citizens Public Services Electric - -------- Select Income Statement Data Revenues Residential distribution $ 18,359 $ 17,732 4% $ 38,685 $ 38,511 0% Commercial distribution 14,405 13,269 9% 27,998 26,433 6% Industrial distribution 10,794 9,633 12% 20,053 19,710 2% Municipal distribution 1,966 2,036 -3% 3,944 3,931 0% Total distribution 45,524 42,670 7% 90,680 88,585 2% Transmission 48 917 -95% 953 1,488 -36% Other 1,590 212 650% 1,603 1,000 60% Total revenues 47,162 43,799 8% 93,236 91,073 2% Cost of services (electric energy and fuel oil purchased) 22,873 20,094 14% 43,456 41,838 4% Gross margin 24,289 23,705 2% 49,780 49,235 1% Depreciation 6,061 5,880 3% 12,042 11,747 3% Other operating expenses 11,927 12,842 -7% 25,180 25,926 -3% Operating income 6,301 4,983 26% 12,558 11,562 9% Special items (1) (379) (27) (382) (53) Operating income including special items 5,922 4,956 19% 12,176 11,509 6% Cash Flow and Capital Expenditure Data Operating cash flow (2) $ 12,362 $ 10,863 14% $ 24,600 $ 23,309 6% Capital expenditures 12,900 6,527 98% 18,496 7,680 141% Free cash flow (3) (538) 4,336 -112% 6,104 15,629 -61% Select Balance Sheet Data Total assets $ 478,809 $ 489,769 -2% Net plant 382,149 383,413 0% Operating Data Customers 119,168 113,532 5% Employees 308 302 2% Customers per employee 387 376 3% Gross margin (net revenue) per employee $ 78,860 $ 78,493 0% $ 161,623 $ 163,030 -1% Megawatt hours sold 420,472 375,328 12% 844,310 794,694 6% Megawatt hours generated 104,985 86,195 22% 199,335 185,455 7% Megawatt hours purchased 331,853 358,693 -7% 747,050 700,067 7% (1) Special items include Y2K and separation costs. (2) Operating income excluding special items plus depreciation. This is the equivalent of sector EBITDA. (3) Operating cash flow less capital expenditures.
Page 6
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) 1999 1998 Change 1999 1998 Change -------------------------------- --------------------------------- Citizens Public Services Water/Wastewater - ---------------- Select Income Statement Data Revenues Residential distribution $ 18,226 $ 17,784 2% $ 35,820 $ 34,197 5% Commercial distribution 4,657 3,347 39% 7,799 6,255 25% Industrial distribution 291 237 23% 523 447 17% Other 1,610 1,051 53% 3,376 1,986 70% Total revenues 24,784 22,419 11% 47,518 42,885 11% Depreciation 4,039 3,233 25% 7,534 6,417 17% Other operating expenses 13,951 12,860 8% 27,911 26,039 7% Operating income 6,794 6,326 7% 12,073 10,429 16% Special items (1) (1,560) (37) (2,738) (75) Operating income including special items 5,234 6,289 -17% 9,335 10,354 -10% Cash Flow and Capital Expenditure Data Operating cash flow (2) $ 10,833 $ 9,559 13% $ 19,607 $ 16,846 16% Capital expenditures 5,522 5,139 7% 7,562 8,466 -11% Free cash flow (3) 5,311 4,420 20% 12,045 8,380 44% Select Balance Sheet Data Total assets $ 603,563 $ 564,721 7% Net plant 515,742 470,790 10% Operating Data Customers 305,399 291,117 5% Employees 359 340 6% Customers per employee 851 856 -1% Revenue per employee $ 69,036 $ 65,938 5% $ 132,362 $ 126,132 5% Billions of gallons of water delivered 8.7 6.7 30% 14.5 12.1 20% Billions of gallons of wastewater treated 1.5 1.3 15% 3.0 2.8 7% (1) Special items include Y2K and separation costs. (2) Operating income excluding special items 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, 1998 and Form 10-Q for the six months ended June 30, 1999 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 7 -----END PRIVACY-ENHANCED MESSAGE-----