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, 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)
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
99.1 Press release of Citizens Utilities Company released
November 9, 1998 announcing third quarter earnings.
99.2 Financial and operating data
<PAGE>
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: November 10, 1998
EXHIBIT 99.1
CITIZENS UTILITIES REPORTS
THIRD QUARTER 1998 FINANCIAL RESULTS
Revenues increased 12%
Citizens Public Services operating income grew 15%
Citizens Communications free cash flow grew 56%
Stamford, Connecticut, November 9, 1998 -- Citizens Utilities (NYSE: CZN, CZNPr)
announced today third quarter 1998 financial results. Revenues for the three
months ended September 30, 1998 grew 12% to $378.3 million from the $338.8
million for the corresponding 1997 quarter.
Net income for the third quarter 1998 decreased to $14.5 million from
$23.5 million for the prior year quarter, primarily due to increased losses from
Citizens' 83% interest in Electric Lightwave, Inc., (NASDAQ: ELIX). Excluding
the impact of Electric Lightwave's losses, net income for the three months ended
September 30, 1998 increased 6% to $30.2 million from $28.4 million for the
third quarter 1997.
Earnings per share for the third quarter 1998 decreased to 6 cents from
9 cents for the prior year quarter. Excluding the impact of Electric Lightwave
losses, earnings per share for the quarter ended September 30, 1998 increased 9%
to 12 cents from 11 cents for the prior year period.
For the nine months ended September 30, 1998, net income and earnings
per share were $55.7 million and 22 cents, respectively, as compared to $66.1
million and 26 cents, respectively, for the prior year period excluding 1997
special items. Absent Electric Lightwave losses, net income for the nine
months ended September 30, 1998 increased 16% to $95.0 million from $81.9
million for the prior year period. Earnings per share for the nine months ended
September 30, 1998, absent Electric Lightwave losses, increased 16% to 37 cents
from 32 cents for the prior year period.
Robert J. DeSantis, Citizens' Chief Financial Officer, stated that
"Citizens Public Services revenues grew 24% over the prior year quarter to $142
million, driven primarily by increases in gas revenues. Citizens Public Services
third quarter operating income increased by 15% to $21.3 million."
Commenting on Citizens Communications, Mr. DeSantis noted that
"operating income for the third quarter decreased slightly to $39.5 million from
the prior year period primarily due to the continuing unfavorable impact of
universal service fund reform as well as Year 2000 and other information systems
upgrade expenses. For the nine months ended September 30, 1998 operating income
grew 16% to $117.1 million and the sector's EBITDA margin was 41% versus 38% for
the prior year period. Year to date free cash flow improved 109% to $122.8
million."
"Electric Lightwave's 55% revenue growth over the prior year quarter
was primarily due to increases in local dial tone services and enhanced services
revenue. Electric Lightwave's owned and leased gross property plant and
equipment at quarter end totaled $571.4 million as compared to $336.9 million a
year earlier."
"The Company's previously announced separation is proceeding on
schedule," DeSantis said. Progress made to date includes:
- an order from the Federal Energy Regulatory Commission (which
became final in September) that granted an approval necessary to
proceed with the separation plan.
- petitions filed with five state regulatory agencies, representing
more than half of the company's local access lines, for approval
to proceed with the separation plan.
- a request to the Internal Revenue Service for a private letter
ruling that the separation is not subject to federal income tax.
Citizens Utilities provides Telecommunications Services and Public
Services including 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., 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. Citizens announced on May 18, 1998 that it intends to
separate its telecommunications businesses and public services businesses into
two stand-alone, publicly traded companies.
<PAGE>
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 on 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)
<PAGE>
Citizens Utilities Company and Subsidiaries
Consolidated Financial Data
(unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
For the quarter ended For the nine months ended
September 30, September 30,
--------------------- -------------------------
% %
(Dollars in thousands, except per share data) 1998 1997 Change 1998 1997 Change
------------------------------- -------------------------------
Income Statement Data
Revenues $ 378,279 $ 338,803 12% $1,148,489 $ 1,043,518 10%
Cost of services 79,934 68,174 17% 268,661 248,721 8%
Sales and marketing expenses 14,194 8,088 75% 33,796 38,772 -13%
Depreciation and amortization 65,117 58,827 11% 193,479 174,347 11%
Other operating expenses 178,698 151,466 18% 514,434 432,905 19%
Operating income 40,336 52,248 -23% 138,119 148,773 -7%
Special items (1) - - - (191,090)
Operating income including special items 40,336 52,248 -23% 138,119 (42,317) 426%
Investment and other income 11,489 10,794 6% 35,336 34,142 3%
Interest expense 29,178 25,640 14% 84,573 79,589 6%
Special items (1) - - - (6,230)
Income taxes 6,633 12,342 -46% 26,189 (29,567) 189%
Convertible preferred dividends 1,553 1,553 0% 4,657 4,657 0%
Income excluding cumulative effect of change
in accounting principle and special items (1) 14,461 23,507 -38% 58,036 66,080 -12%
Cumulative effect of change in accounting principle
for ELI, net of tax - - 2,334 -
Net income 14,461 23,507 -38% 55,702 (69,084) 181%
Net income excluding ELI 30,177 28,409 6% 94,962 81,898 16%
Per-Share Data (2)
Basic and diluted net income per share of common stock before
cumulative effect of change in accounting principle and
excluding special items (1) $ .06 $ .09 -33% $ .23 $ .26 -12%
Basic and diluted net income per share of common stock
excluding special items (1) $ .06 $ .09 -33% $ .22 $ .26 -15%
Basic net income per share of common stock excluding
ELI and special items (1) $ .12 $ .11 9% $ .37 $ .32 16%
Weighted average shares outstanding 258,202 257,635 0% 257,478 258,545 0%
(1) In the second quarter of 1997, the Company recorded certain charges to earnings totaling approximately $197 million. The charges
relate primarily to certain assets deemed no longer recoverable, the effects of certain regulatory commission orders and the
cutback of certain long distance service operations.
(2) Adjusted for subsequent stock dividends and stock splits and used in the calculation of all per share data.
</TABLE>
<PAGE>
Exhibit 99.2
Citizens Utilities Company and Subsidiaries
Consolidated Financial Data
(unaudited)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
For the quarter ended For the nine months ended
September 30, September 30,
--------------------- % ------------------------- %
(Dollars in thousands) 1998 1997 Change 1998 1997 Change
---------------------------- ------------------------------
Income Statement Data
Revenues $ 378,279 $ 338,803 12% $1,148,489 $ 1,043,518 10%
Cost of services 79,934 68,174 17% 268,661 248,721 8%
Sales and marketing expenses 14,194 8,088 75% 33,796 38,772 -13%
Depreciation and amortization 65,117 58,827 11% 193,479 174,347 11%
Other operating expenses 178,698 151,466 18% 514,434 432,905 19%
Operating income 40,336 52,248 -23% 138,119 148,773 -7%
Special items (1) - - - (191,090)
Operating income including special items 40,336 52,248 -23% 138,119 (42,317) 426%
Investment and other income 11,489 10,794 6% 35,336 34,142 3%
Interest expense 29,178 25,640 14% 84,573 79,589 6%
Special items (1) - - - (6,230)
Income taxes 6,633 12,342 -46% 26,189 (29,567) 189%
Convertible preferred dividends 1,553 1,553 0% 4,657 4,657 0%
Income excluding cumulative effect of change
in accounting principle and special items (1) 14,461 23,507 -38% 58,036 66,080 -12%
Cumulative effect of change in accounting principle
for ELI, net of tax - - 2,334 -
Net income 14,461 23,507 -38% 55,702 (69,084) 181%
Net income excluding ELI 30,177 28,409 6% 94,962 81,898 16%
Cash Flow and Capital Expenditure Data
EBITDA (2) $ 116,942 $ 121,869 -4% $ 366,934 $ 357,262 3%
Cash flow from operations 70,814 73,618 -4% 227,196 175,173 30%
Capital expenditures 138,953 124,704 11% 340,356 318,236 7%
Free cash flow (68,139) (51,086) -33% (113,160) (143,063) 21%
EBITDA excluding ELI (2) 133,357 126,700 5% 406,006 375,882 8%
Cash flow from operations excluding ELI 87,299 86,813 1% 256,703 193,213 33%
Capital expenditures excluding ELI 78,222 91,126 -14% 199,828 249,595 -20%
Free cash flow excluding ELI 9,077 (4,313) 310% 56,875 (56,382) 201%
Select Balance Sheet Data
Cash and investments $ 499,529 $ 449,313 11%
Total assets 5,101,908 4,502,170 13%
Net plant 3,820,035 3,336,766 14%
Long-term debt 1,856,717 1,585,361 17%
Equity (3) 1,973,473 1,797,873 10%
Shares of common stock outstanding (4) 258,272 257,197 0%
Weighted average shares outstanding (4) 258,202 257,635 0% 257,478 258,545 0%
Per-Share Data (4)
Basic and diluted net income per share of common stock
before cumulative effect of change in accounting
principle and excluding special items (1) $ .06 $ .09 -33% $ .23 $ .26 -12%
Basic and diluted net income per share of common stock
before special items (1) $ .06 $ .09 -33% $ .22 $ .26 -15%
Basic net income per share of common stock excluding
ELI and special items (1) $ .12 $ .11 9% $ .37 $ .32 16%
Operating cash flow per share $ .27 $ .29 -7% $ .88 $ .68 29%
Operating cash flow per share excluding ELI $ .34 $ .34 0% $ 1.00 $ .75 33%
Book value per share $ 6.88 $ 6.18 11%
Other Financial Data
Long-term debt to long-term debt and equity 48% 47%
Long-term debt to long-term debt and equity excluding ELI 45% 47%
Interest coverage (5) 4.0x 4.8x 4.3x 4.5x
Interest coverage excluding ELI (5) 4.6x 4.9x 4.8x 4.7x
Common equity market capitalization (in billions) $ 2.1 $ 2.3
Equity market capitalization (in billions) (6) $ 2.3 $ 2.5
Market capitalization (in billions) (7) $ 4.1 $ 4.1
ELI public enterprise value (in billions) (8) $ 0.7 n/a
</TABLE>
(1) In the second quarter of 1997, the Company recorded certain charges to
earnings totaling approximately $197 million. The charges relate primarily
to certain assets deemed no longer recoverable, the effects of certain
regulatory commission orders and the cutback of certain long distance
service operations.
(2) Earnings before interest expense, income taxes, depreciation and
amortization.
(3) Includes convertible preferred securities.
(4) Adjusted for subsequent stock dividends and stock splits and used in the
calculation of all per share data.
(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.
Note: Quarter ended information is not presented where it is the same as year to
date.
<PAGE>
Citizens Utilities Company and Subsidiaries
Financial and Operating Data by Service
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
For the quarter ended For the nine months ended
September 30, September 30,
--------------------------- --------------------------
% %
(Dollars in thousands, except operating data) 1998 1997 Change 1998 1997 Change
-------------------------------------- -------------------------------------
Citizens Communications
Select Income Statement Data
Revenues
Network access services $ 107,325 $ 103,001 4% $ 315,332 $ 303,384 4%
Local network services 66,439 64,756 3% 194,753 189,228 3%
Long distance services 26,435 27,635 -4% 74,622 77,208 -3%
Directory services 7,949 8,720 -9% 23,757 24,289 -2%
Other 10,822 10,687 1% 35,098 36,426 -4%
Eliminations (1) (7,660) (6,938) (23,086) (17,331)
Total revenues 211,310 207,861 2% 620,476 613,204 1%
Cost of services (network expenses) 20,924 20,782 1% 67,615 76,916 -12%
Sales and marketing expenses 6,825 5,967 14% 15,752 30,056 -48%
Depreciation 45,914 43,986 4% 137,189 129,745 6%
Other operating expenses 107,206 105,130 2% 308,150 295,268 4%
Eliminations (1) (9,050) (8,757) (25,351) (19,946)
Operating income 39,491 40,753 -3% 117,121 101,165 16%
Special items - - - (142,723)
Operating income/(loss) including special items 39,491 40,753 -3% 117,121 (41,558) 382%
Operating margin 19% 20% 19% 16%
Cash Flow and Capital Expenditure Data
Operating cash flow (2) $ 85,405 $ 84,739 1% $ 254,310 $ 230,910 10%
Capital expenditures 50,155 62,105 -19% 131,508 172,160 -24%
Free cash flow (3) 35,250 22,634 56% 122,802 58,750 109%
EBITDA margin 40% 41% 41% 38%
Select Balance Sheet Data
Total assets $ 2,293,144 $ 2,160,700 6%
Net plant 2,003,419 1,904,094 5%
Operating Data
Access lines 901,985 868,502 4%
Long distance customers - in territory 234,508 223,000 5%
- out of territory 13,982 21,000 -33%
- total 248,490 244,000 2%
Revenue per access line $ 234 $ 239 -2% $ 688 $ 706 -3%
In-territory access minutes of use (in millions) 1,136 1,105 3% 3,453 3,349 3%
Citizens' long distance minutes of use (in millions)
- in territory 122 115 6% 364 314 16%
- out of territory 43 109 -61% 186 315 -41%
- total 165 224 -26% 550 629 -13%
Citizens' long distance in territory minutes of use market share 18% 19%
Citizens' long distance in territory customer market share 26% 26%
</TABLE>
(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.
<PAGE>
Citizens Utilities Company and Subsidiaries
Financial and Operating Data by Service
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
For the quarter ended For the nine months ended
September 30, September 30,
------------------------- -------------------------
% %
(Dollars in thousands, except operating data) 1998 1997 Change 1998 1997 Change
------------------------------------ -----------------------------------
Electric Lightwave, Inc. (1)
Select Income Statement Data
Revenues
Dedicated services $ 9,009 $ 9,184 -2% $ 26,487 $ 23,300 14%
Local dial tone services 9,987 2,893 245% 23,780 6,136 288%
Long distance service 2,512 2,387 5% 6,233 6,098 2%
Enhanced services 4,156 2,561 62% 10,664 6,590 62%
Eliminations (2) (650) (925) (2,265) (2,615)
Total revenues 25,014 16,100 55% 64,899 39,509 64%
Cost of services (network expenses) 12,317 11,070 11% 31,389 24,217 30%
Gross margin 12,697 5,030 152% 33,510 15,292 119%
Sales and marketing expenses 7,369 2,121 247% 18,044 8,716 107%
Depreciation 4,090 2,280 79% 11,754 6,893 71%
Other operating expenses 21,743 7,740 181% 54,538 25,196 116%
Operating loss (20,505) (7,111) 188% (50,826) (25,513) 99%
Special items - - - (10,765)
Operating loss including special items (20,505) (7,111) 188% (50,826) (36,278) 40%
Cash Flow and Capital Expenditure Data
Operating cash flow (3) $ (16,415) $ (4,831) -240% $ (39,072) $ (18,620) -110%
Capital expenditures 60,731 33,578 81% 140,528 68,641 105%
Free cash flow (4) (77,146) (38,409) -101% (179,600) (87,261) -106%
Select Balance Sheet Data
Total assets $ 477,314 $ 248,570 92%
Gross plant - owned 462,844 249,499 86%
- leased 108,541 87,426 24%
- total 571,385 336,925 70%
Operating Data
Route miles 2,782 2,087 33%
Fiber miles 156,949 123,257 27%
Customers 1,475 1,085 36%
Buildings connected 711 540 32%
Employees 1,010 482 110%
Revenue per employee $ 24,766 $ 33,402 -26% $ 64,256 $ 81,969 -22%
(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 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.
</TABLE>
<PAGE>
Citizens Utilities Company and Subsidiaries
Sector Financial and Operating Data
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
For the quarter ended For the nine months ended
September 30, September 30,
------------------------- -------------------------
% %
(Dollars in thousands, except operating data) 1998 1997 Change 1998 1997 Change
------------------------------------ ------------------------------------
Citizens Public Services
Select Income Statement Data
Revenues
Residential distribution $ 66,284 $ 60,275 10% $ 234,392 $ 218,171 7%
Commercial distribution 42,665 27,536 55% 137,101 92,106 49%
Industrial distribution 25,431 18,945 34% 65,158 55,282 18%
Total distribution 134,380 106,756 26% 436,651 365,559 19%
Transportation / transmission 1,170 1,146 2% 4,050 3,839 5%
Other 6,405 6,940 -8% 22,413 21,407 5%
Total revenues 141,955 114,842 24% 463,114 390,805 19%
Cost of services (1) 55,003 44,185 24% 195,008 167,534 16%
Gross margin 86,952 70,657 23% 268,106 223,271 20%
Depreciation 15,113 12,561 20% 44,536 37,709 18%
Other operating expenses 50,489 39,490 28% 151,746 112,441 35%
Operating income 21,350 18,606 15% 71,824 73,121 -2%
Special items - - - (37,602)
Operating income including special items 21,350 18,606 15% 71,824 35,519 102%
Cash Flow and Capital Expenditure Data
Operating cash flow (2) $ 36,463 $ 31,167 17% $ 116,360 $ 110,830 5%
Capital expenditures 20,630 19,704 5% 50,698 52,391 -3%
Free cash flow (3) 15,833 11,463 38% 65,662 58,439 12%
Select Balance Sheet Data
Total assets $ 1,647,371 $1,409,447 17%
Net plant 1,279,426 1,145,726 12%
Operating Data
Customers 853,165 774,928 10%
Employees 1,735 1,480 17%
Gross margin per employee $ 50,116 $ 40,724 23% $ 154,528 $ 150,859 2%
(1) 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.
</TABLE>
<PAGE>
Citizens Utilities Company and Subsidiaries
Financial and Operating Data by Service
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
For the quarter ended For the nine months ended
September 30, September 30,
-------------------------- --------------------------
% %
(Dollars in thousands, except operating data) 1998 1997 Change 1998 1997 Change
------------------------------------- ------------------------------------
Citizens Public Services
Gas
Select Income Statement Data
Revenues
Residential distribution $ 22,413 $ 17,450 28% $ 117,813 $ 101,675 16%
Commercial distribution 21,721 7,436 192% 83,469 38,203 118%
Industrial distribution 15,022 7,573 98% 34,592 21,871 58%
Total distribution 59,156 32,459 82% 235,874 161,749 46%
Transportation 421 437 -4% 1,813 1,819 0%
Other 3,094 2,457 26% 12,185 9,282 31%
Total revenues 62,671 35,353 77% 249,872 172,850 45%
Cost of services (gas purchased) 29,066 16,419 77% 127,233 94,598 34%
Gross margin 33,605 18,934 77% 122,639 78,252 57%
Depreciation 5,870 4,007 46% 17,129 11,915 44%
Other operating expenses 23,828 13,183 81% 72,992 38,446 90%
Operating income 3,907 1,744 124% 32,518 27,891 17%
Special items - - - (12,707)
Operating income/(loss) including special items 3,907 1,744 124% 32,518 15,184 114%
Cash Flow and Capital Expenditure Data
Operating cash flow (1) $ 9,777 $ 5,751 70% $ 49,647 $ 39,806 25%
Capital expenditures 13,571 9,714 40% 27,493 24,196 14%
Free cash flow (2) (3,794) (3,963) 4% 22,154 15,610 42%
Select Balance Sheet Data
Total assets $ 581,230 $ 376,028 55%
Net plant 426,611 294,947 45%
Operating Data
Customers 447,432 372,469 20%
Employees 1,087 796 37%
Customers per employee 412 468 -12%
Gross margin per employee $ 30,915 $ 23,786 30% $ 112,823 $ 98,307 15%
Billion Cubic Feet of gas throughput (BCF) 31.5 10.2 209% 102.9 50.7 103%
(1) Operating income plus depreciation. This is the equivalent of sector EBITDA.
(2) Operating cash flow less capital expenditures.
Note: Quarter ended information is not presented where it is the same as year to
date.
</TABLE>
<PAGE>
Citizens Utilities Company and Subsidiaries
Financial and Operating Data by Service
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
For the quarter ended For the nine months ended
September 30, September 30,
------------------------- -------------------------
% %
(Dollars in thousands, except operating data) 1998 1997 Change 1998 1997 Change
------------------------------------ -----------------------------------
Citizens Public Services
Electric
Select Income Statement Data
Revenues
Residential distribution $ 24,458 $ 23,754 3% $ 62,969 $ 63,564 -1%
Commercial distribution 16,774 15,841 6% 43,207 43,546 -1%
Industrial distribution 10,085 11,076 -9% 29,795 32,682 -9%
Total distribution 51,317 50,671 1% 135,971 139,792 -3%
Transmission 749 709 6% 2,237 2,020 11%
Other 2,080 3,602 -42% 7,011 9,602 -27%
Total revenues 54,146 54,982 -2% 145,219 151,414 -4%
Cost of services (electric energy and
fuel oil purchased) 25,937 27,766 -7% 67,775 72,936 -7%
Gross margin 28,209 27,216 4% 77,444 78,478 -1%
Depreciation 5,882 5,588 5% 17,629 16,767 5%
Other operating expenses 13,647 12,648 8% 39,626 36,576 8%
Operating income 8,680 8,980 -3% 20,189 25,135 -20%
Special items - - - (22,054)
Operating income/(loss) including special items 8,680 8,980 -3% 20,189 3,081 555%
Cash Flow and Capital Expenditure Data
Operating cash flow (1) $ 14,562 $ 14,568 0% $ 37,818 $ 41,902 -10%
Capital expenditures 5,190 3,684 41% 12,870 11,449 12%
Free cash flow (2) 9,372 10,884 -14% 24,948 30,453 -18%
Select Balance Sheet Data
Total assets $ 494,603 $ 485,806 2%
Net plant 380,778 393,506 -3%
Operating Data
Customers 112,773 110,711 2%
Employees 305 321 -5%
Customers per employee 370 345 7%
Gross margin per employee $ 92,489 $ 84,785 9% $ 253,915 $ 244,480 4%
Megawatt hours sold 515,881 483,010 7% 1,310,575 1,257,772 4%
Megawatt hours generated 87,957 85,418 3% 273,412 259,646 5%
Megawatt hours purchased 480,844 461,134 4% 1,180,911 1,168,946 1%
(1) Operating income plus depreciation.
(2) Operating cash flow less capital expenditures.
Note: Quarter ended information is not presented where it is the same as year to
date.
</TABLE>
<PAGE>
Citizens Utilities Company and Subsidiaries
Financial and Operating Data by Service
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
For the quarter ended For the nine months ended
September 30, September 30,
------------------------ ------------------------
% %
(Dollars in thousands, except operating data) 1998 1997 Change 1998 1997 Change
--------------------------------- ---------------------------------
Citizens Public Services
Water/Wastewater
Select Income Statement Data
Revenues
Residential distribution $ 19,413 $ 19,071 2% $ 53,610 $ 52,932 1%
Commercial distribution 4,170 4,259 -2% 10,425 10,357 1%
Industrial distribution 324 296 9% 771 729 6%
Other 1,231 881 40% 3,217 2,523 28%
Total revenues 25,138 24,507 3% 68,023 66,541 2%
Depreciation 3,361 2,966 13% 9,778 9,027 8%
Other operating expenses 13,014 13,659 -5% 39,128 37,419 5%
Operating income 8,763 7,882 11% 19,117 20,095 -5%
Special items - - - (2,841)
Operating income including special items 8,763 7,882 11% 19,117 17,254 11%
Cash Flow and Capital Expenditure Data
Operating cash flow (1) $ 12,124 $ 10,848 12% $ 28,895 $ 29,122 -1%
Capital expenditures 1,869 6,306 -70% 10,335 16,746 -38%
Free cash flow (2) 10,255 4,542 126% 18,560 12,376 50%
Select Balance Sheet Data
Total assets $ 571,538 $ 547,613 4%
Net plant 472,037 457,273 3%
Operating Data
Customers 292,960 291,748 0%
Employees 343 363 -6%
Customers per employee 854 804 6%
Revenue per employee $ 73,289 $ 67,512 9% $ 198,318 $ 183,309 8%
Billions of gallons of water delivered 10.7 10.3 4% 22.8 24.4 -7%
Billions of gallons of wastewater treated 1.2 1.1 9% 4.0 3.9 3%
(1) Operating income plus depreciation. This is the equivalent of sector EBITDA.
(2) Operating cash flow less capital expenditures.
Note: Quarter ended information is not presented where it is the same as year to
date.
The foregoing information is unaudited and should be read in conjunction with the financial statements and footnotes included in the
Company's Form 10-K for the three years ended December 31, 1997 and Form 10-Q for the nine months ended September 30, 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.
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