-----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, IErBdH8d2XJBu7VTsHOQoMFB0Ih+yUrbZz1i2/9vw1VKEJVqWc9Mkwu1dV2o2K5b zTQrW9C4gkHyFabvmSi9VQ== 0000020520-99-000020.txt : 19991111 0000020520-99-000020.hdr.sgml : 19991111 ACCESSION NUMBER: 0000020520-99-000020 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990930 ITEM INFORMATION: FILED AS OF DATE: 19991110 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: 99745581 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: November 9, 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 November 9, 1999 announcing third 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 Vice President and Chief Financial Officer Date: November 10, 1999 EX-99 2 PRESS RELEASE ANNOUNCING THIRD QUARTER RESULTS Company Logo Exhibit 99.1 Citizens Utilities 3 High Ridge Park Stamford, CT 06905 203.614.5600 Web site: www.czn.net - -------------------------------------------------------------------------------- FOR IMMEDIATE RELEASE Contacts: Financial Community: Media: - ------------------- ----- Alan H. Oshiki, Assistant Vice President Brigid M. Smith, Investor Relations Assistant Vice President (203) 614-5629 Corporate Communications aoshiki@czn.com (203) 614-5042 bsmith@czn.com Citizens Utilities Reports Third Quarter 1999 Financial Results STAMFORD, Conn., November 9, 1999 - Citizens Utilities (NYSE: CZN, CZNPr) - ------------------------------------ announced financial results today for the third quarter and nine months ended September 30, 1999. Revenues from continuing operations were $271.5 million in the third quarter, up 15% from the $236.3 million in the third quarter of 1998. Pre-tax income increased to $14.0 million, 3% higher than the $13.6 million for the prior year quarter. Net income for the third quarter of 1999 was $11.9 million, or 5 cents per share, compared to $14.5 million, or 6 cents per share, for the third quarter of 1998. Net income and earnings per share for the current quarter were affected by increased tax expense related to out-of-period gains on the sales of investments. For the nine months ended September 30, 1999, revenues from continuing operations were $810.2 million, up 18% from the $685.4 million for the prior year period. Pre-tax income was $92.9 million, 84% above the $50.6 million for the prior year period. Nine-month net income was $74.3 million, up 33% from the prior year level of $55.7 million. Earnings per share for the nine-month period in 1999 was 29 cents, up 38% compared to 21 cents for the 1998 period. During the third quarter, Citizens adopted a plan to divest its public services businesses. Accordingly, the financial results of those businesses are now presented separately on the company's income statements as income from discontinued operations, net of tax. "Citizens overall financial performance compared to the prior year quarter was very strong," said Robert J. DeSantis, vice president and chief financial officer. "Operating income increased 11% to $21 million, while EBITDA (earnings before interest, taxes, depreciation and amortization) improved 24% to $100 million." Commenting on the performance of Citizens Communications, DeSantis said, "Our local telephone exchange operations continued to generate strong revenue growth. Network access services revenue was up 16%, driven by an 18% increase in switched access minutes of use, and local network services revenue was up 9%, driven by 6% growth in access lines and continued growth in enhanced services. Communications sector EBITDA also improved, growing to about $95 million, up 11% over the prior year." With respect to the company's competitive local exchange operations, DeSantis said, "Electric Lightwave's revenues increased 91% over the prior year quarter to $48 million while gross margins reached 70%. Operating and EBITDA losses declined further and we expect those improvements to continue, with EBITDA turning positive by the second half of 2000." "We have also made significant progress with the divestiture of our public services businesses, with the announced sale in October of our water and wastewater operations for $835 million," DeSantis said. "We now anticipate a spirited auction for our gas and electric properties." 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. Citizens also owns 82% of Electric Lightwave, Inc. (NASDAQ: ELIX), a facilities-based, integrated communications provider that offers a broad range of services to telecommunications-intensive businesses throughout the United States. Earlier this year, Citizens announced that it was acquiring 800,000 telephone access lines in 11 states from GTE and U S WEST, and that it was divesting its public services businesses. Citizens plans to use the proceeds from the divestitures to fund the acquisitions. 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, 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 does not intend to update or revise these forward-looking statements to reflect the occurrence of future events or circumstances. Citizens Utilities Company and Subsidiaries Consolidated Financial Data (unaudited)
For the quarter ended For the nine months ended September 30, September 30, ---------------------- ---------------------- % % (Dollars in thousands) 1999 1998 Change 1999 1998 Change ------------------------------- ------------------------------- Income Statement Data Continuing operations (1) Revenues $ 271,517 $236,324 15% $810,213 $685,375 18% Network expenses 18,648 24,931 -25% 86,937 73,653 18% Depreciation and amortization 64,628 50,004 29% 186,276 148,943 25% Other operating expenses 167,245 142,403 17% 493,901 396,484 25% Operating income 20,996 18,986 11% 43,099 66,295 -35% Investment and other income 14,783 11,818 25% 39,434 35,228 12% Interest expense 21,745 17,181 27% 59,142 48,576 22% Special items (2) - - 69,499 (2,334) Pre-tax income 14,034 13,623 3% 92,890 50,613 84% Income taxes 3,956 1,504 163% 30,812 7,044 337% Convertible preferred dividends 1,553 1,553 0% 4,657 4,657 0% Income from continuing operations 8,525 10,566 -19% 57,421 38,912 48% Income from discontinued operations, net of tax (3) 3,383 3,895 -13% 16,863 16,790 0% Net income 11,908 14,461 -18% 74,284 55,702 33% Per-Share Data (4) Basic net income per share of common stock $ 0.05 $ 0.06 -17% $ 0.29 $ 0.21 38% Weighted average shares outstanding (5) 260,610 260,139 0% 259,985 259,409 0% (1) Continuing operations include the Company's Communications and CLEC businesses. (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) The company is reporting its Public Services businesses as discontinued operations. Interest expense has been imputed to these businesses. (4) Calculated based on weighted average shares outstanding. (5) 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 nine months ended September 30, September 30, ------------------------ ------------------------ % % (Dollars in thousands) 1999 1998 Change 1999 1998 Change ---------------------------------- ---------------------------------- Income Statement Data Continuing operations (1) Revenues $ 271,517 $ 236,324 15% $ 810,213 $ 685,375 18% Network expenses 18,648 24,931 -25% 86,937 73,653 18% Depreciation and amortization 64,628 50,004 29% 186,276 148,943 25% Other operating expenses 167,245 142,403 17% 493,901 396,484 25% Operating income 20,996 18,986 11% 43,099 66,295 -35% Investment and other income 14,783 11,818 25% 39,434 35,228 12% Interest expense 21,745 17,181 27% 59,142 48,576 22% Special items (2) - - 69,499 (2,334) Pre-tax income 14,034 13,623 3% 92,890 50,613 84% Income taxes 3,956 1,504 163% 30,812 7,044 337% Convertible preferred dividends 1,553 1,553 0% 4,657 4,657 0% Income from continuing operations 8,525 10,566 -19% 57,421 38,912 48% Income from discontinued operations, net of tax (3) 3,383 3,895 -13% 16,863 16,790 0% Net income 11,908 14,461 -18% 74,284 55,702 33% Cash Flow and Capital Expenditure Data (4) EBITDA from continuing operations (5) $ 100,407 $ 80,808 24% $ 338,308 $ 250,466 35% EBITDA (5) 133,000 117,271 13% 447,019 366,826 22% Cash flow from operations 125,848 70,814 78% 371,372 227,196 63% Capital expenditures 126,836 138,953 -9% 394,330 340,356 16% Free cash flow (6) (988) (68,139) 99% (22,958) (113,160) 80% Select Balance Sheet Data Cash and investments $ 577,368 $ 548,859 5% Total assets 5,600,258 5,101,908 10% Net plant (7) 2,868,608 2,547,632 13% Long-term debt (8) 2,080,050 1,764,943 18% Equity (9) 2,064,464 1,973,473 5% Shares of common stock outstanding 260,820 258,272 1% Weighted average shares outstanding (10) 260,610 260,139 0% 259,985 259,409 0% Per-Share Data (11) Basic net income per share of common stock $ 0.05 $ 0.06 -17% $ 0.29 $ 0.21 38% Operating cash flow per share $ 0.48 $ 0.27 78% $ 1.43 $ 0.88 63% Book value per share $ 7.17 $ 6.83 5% Other Financial Data Long-term debt to long-term debt and equity 50% 47% Common equity market capitalization (in billions) $ 3.0 $ 2.1 Equity market capitalization (in billions) (12) $ 3.2 $ 2.3 Market capitalization (in billions) (13) $ 5.2 $ 4.0 (1) Continuing operations include the Company's Communications and CLEC businesses. (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) The company is reporting its Public Services businesses as discontinued operations. Interest expense has been imputed to these businesses. (4) Includes continuing and discontinuing operations except as noted. (5) Earnings before interest expense, income taxes, depreciation and amortiza- tion. (6) Cash flow from operations less capital expenditures. (7) Excludes net plant of discontinued operations. (8) Excludes approximately $90 million of debt to be assumed by the purchaser of the Company's Water and Wastewater businesses. (9) Includes convertible preferred securities. (10)Adjusted for subsequent stock dividends and stock splits and used in the calculation of all per share data. (11)Calculated based on weighted average shares outstanding. (12)Includes market value of convertible preferred securities. (13)Equity market capitalization plus market value of long-term debt.
Citizens Utilities Company and Subsidiaries Financial and Operating Data by Service
For the quarter ended For the nine months ended September 30, September 30, ----------------------- ------------------------- % % (Dollars in thousands, except operating data) 1999 1998 Change 1999 1998 Change -------------------------------- ------------------------------- Citizens Communications Select Income Statement Data Revenues Network access services $ 124,137 $ 107,325 16% $ 381,341 $ 315,332 21% Local network services 72,167 66,439 9% 214,159 194,753 10% Long distance and data services 17,480 26,435 -34% 58,413 74,622 -22% Directory services 8,178 7,949 3% 24,950 23,757 5% Other 11,750 10,822 9% 33,724 35,098 -4% Eliminations (1) (10,050) (7,660) (33,072) (23,086) Total revenues 223,662 211,310 6% 679,515 620,476 10% Cost of services (network expenses) 14,726 20,924 -30% 58,579 67,615 -13% Depreciation 54,821 45,914 19% 161,325 137,189 18% Other operating expenses 124,811 114,031 9% 377,404 323,902 17% Eliminations (1) (10,797) (9,050) (35,287) (25,351) Operating income 40,101 39,491 2% 117,494 117,121 0% Operating margin 18% 19% 17% 19% Cash Flow and Capital Expenditure Data Operating cash flow (2) $ 94,922 $ 85,405 11% $ 278,819 $ 254,310 10% Capital expenditures 65,655 50,155 31% 156,264 131,508 19% Free cash flow (3) 29,267 35,250 -17% 122,555 122,802 0% EBITDA margin (4) 42% 40% 41% 41% Select Balance Sheet Data Total assets $ 2,364,737 $2,293,144 3% Net plant 2,120,423 2,003,419 6% Operating Data Access lines 983,222 925,634 6% Revenue per access line $ 227 $ 228 0% $ 691 $ 670 3% Switched access minutes of use (in millions) 1,335 1,136 18% 3,852 3,395 13% Employees 3,629 3,448 5% Access lines per employee 271 268 1% Citizens' long distance minutes of use (in millions) - in territory 136 122 11% 388 364 7% - out of territory 6 43 -86% 47 186 -75% - total 142 165 -14% 435 550 -21% Citizens' long distance customers - in territory 252,264 234,508 8% - out of territory 2,358 13,982 -83% - total 254,622 248,490 2% Citizens' long distance in-territory customer market share 26% 25% (1) Eliminations represent network access revenues received by the Company's local exchange operations from its long-distance and competitive local exchange operations. (2) Operating income plus depreciation. This is the equivalent of sector EBITDA. (3) Operating cash flow less capital expenditures. (4) Operating cash flow divided by total revenues.
Citizens Utilities Company and Subsidiaries Financial and Operating Data by Service
For the quarter ended For the nine months ended September 30, September 30, -------------------------- -------------------------- % % (Dollars in thousands, except operating data) 1999 1998 Change 1999 1998 Change ------------------------------------ ------------------------------------- Electric Lightwave, Inc. (1) Select Income Statement Data Revenues Dedicated services $ 14,024 $ 9,009 56% $ 37,431 $ 26,487 41% Local dial tone services 22,313 9,987 123% 55,221 23,780 132% Long distance service 4,812 2,512 92% 22,587 6,233 262% Enhanced services 7,453 4,156 79% 17,674 10,664 66% Eliminations (1) (747) (650) (2,215) (2,265) Total revenues 47,855 25,014 91% 130,698 64,899 101% Cost of services (network expenses) 14,719 13,057 13% 63,645 31,389 103% Gross margin 33,136 11,957 177% 67,053 33,510 100% Depreciation 9,807 4,090 140% 24,951 11,754 112% Other operating expenses 42,434 28,372 50% 116,497 72,582 61% Operating loss (19,105) (20,505) 7% (74,395) (50,826) -46% Cash Flow and Capital Expenditure Data Operating cash flow (2) $ (9,298) $ (16,415) 43% $ (49,444) $ (39,072) -27% Capital expenditures (3) 30,218 60,731 -50% 147,569 140,528 5% Free cash flow (4) (39,516) (77,146) 49% (197,013) (179,600) -10% Select Balance Sheet Data Total assets $ 726,982 $ 461,821 57% Gross plant - owned 723,141 462,844 56% - leased 108,541 108,541 0% - total 831,682 571,385 46% Operating Data Route miles 4,047 2,782 45% Fiber miles 214,656 156,949 37% Customers 2,102 1,475 43% Buildings connected 808 711 14% Employees 1,172 1,010 16% Revenue per employee $ 40,832 $ 24,766 65% $ 111,517 $ 64,256 74% ELI public enterprise value (in billions) (5) $ 1.2 $ 0.6 (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) Operating loss plus depreciation. This is the equivalent of sector EBITDA. (3) Excludes non-cash capital lease additions of $47,715. (4) Operating cash flow less capital expenditures. (5) Includes common equity market capitalization plus net debt.
-----END PRIVACY-ENHANCED MESSAGE-----