SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report:
March 10, 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)
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
99.1 Press release of Citizens Utilities Company released
March 10, 1998 announcing earnings for the year and
quarter ended December 31, 1998.
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: March 11, 1999
<PAGE>
EXHIBIT 99.1
CITIZENS UTILITIES REPORTS
1998 YEAR-END AND FOURTH-QUARTER
FINANCIAL RESULTS
Revenues Increased 9% in 1998
1998 EPS of 33 Cents, Excluding Special Items
Citizens Communications 1998 Operating Income Grew 18%
STAMFORD, Conn., March 10, 1999 -- Citizens Utilities (NYSE: CZN, CZNPr)
- ---------------------------------
today reported results for the year and quarter ended December 31, 1998.
Full year 1998 consolidated revenues were $1.54 billion, up 9% from
last year's level, driven by the continued strong growth of the company's
facilities-based integrated communications provider subsidiary, Electric
Lightwave Inc. (NASDAQ: ELIX) and increased natural gas revenues. Revenues for
the fourth quarter were $393.9 million, a 6% increase over the 1997 level
despite warmer than normal weather affecting Citizens Public Services'
operations.
Reported net income for the year was $57.1 million, or $.22 per share,
compared to $10.1 million, or $.04 per share, in 1997. These reported figures
were impacted by several special items in both years. Excluding special items,
net income decreased to $85.7 million or $.33 per share, in 1998 from $94.1
million, or $.36 per share, in 1997 primarily due to increased losses of
Electric Lightwave, which were expected. Absent Electric Lightwave's losses, net
income increased to $120.4 million, or $.47 per share, from $117.9 million, or
$.45 per share, for 1997.
Reported net income for the fourth quarter 1998 was $1.4 million, or
$.01 per share. Excluding special items, net income was $23.7 million, or $.09
per share, and absent Electric Lightwave's losses, net income was $31.9 million,
or $.12 per share for the quarter.
Reported results for 1998 include the following special items: $6.6
million of after-tax Year 2000 and separation costs; a $2.3 million after-tax
charge related to a change in accounting principle at Electric Lightwave; and a
$19.7 million after-tax write-down of the company's investment in Hungarian
Telephone and Cable Corp. (AMEX: HTC). Reported results for 1997 included the
following special items: an after-tax gain of $51.2 million from the sale of
subsidiary stock and a $135.2 million after-tax charge primarily related to the
restructuring of the company's communications business.
Commenting on the 1998 results, Citizens' chief financial officer
Robert J. DeSantis said, "We met our objective of near double-digit operating
income growth for Citizens Communications and Citizens Public Services combined.
Excluding special items, the combined operating income of these sectors
increased to $264 million, up 8% in 1998.
"Citizens Communications performed to plan with 18% operating income
growth despite the unfavorable impact of Price Cap, Access Charge and Universal
Service Fund reforms. Excluding special items, Citizens Communications operating
income was $164.8 million.
"Results for Citizens Public Services also were within expectations,"
DeSantis continued. "Sector revenues, led by strong growth in our gas
distribution businesses, surged 13% to $610 million in 1998. Excluding special
items, the operating income of our Public Services sector totaled $99.6
million."
Regarding Electric Lightwave's impact on Citizens' results, Mr.
DeSantis said, "Electric Lightwave's growth continues to accelerate and Citizens
remains steadfast in its support of that growth. Revenues in 1998 were $97.8
million, or 69% above 1997 levels. Electric Lightwave's owned and leased gross
property, plant and equipment at year-end 1998 totaled $637 million, up 53% from
one year ago." Electric Lightwave reported its 1998 fourth quarter and year-end
results on March 4.
DeSantis said that 1999 reported results would also be affected by
special items. "This year we can expect to incur Year 2000 expenses of
approximately $28 million as our program to address this issue proceeds on
schedule. In addition, the company will incur expenses related to its previously
announced separation plan. In January 1999, we recorded a pre-tax gain of
about $70 million on the sale of Citizens' 16% stake in Centennial Cellular
Corp. (NASDAQ:CYCL). This represented a 15% annualized return on Citizens
initial investment. In addition, the recently-announced merger between Century
Communications Corp. (NASDAQ:CTYA) and Adelphia Communications should result
in substantial gains in the third quarter relating to Citizens' holdings in
Century and in a cable television joint venture with Century," DeSantis
continued.
Commenting on the Company's previously announced separation plan,
DeSantis said, "the separation is proceeding on schedule toward completion
during the second half of 1999. 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;
approval to proceed with the separation plan from state
regulatory agencies representing approximately 24% of the
Company's local access lines; and
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 22
states. Citizens owns 83% of Electric Lightwave, Inc., a leading full-service,
facilities-based integrated communications services provider. 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.
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, Y2K issues and the effects of the separation. 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>
For the quarter ended For the year ended
December 31, December 31,
---------------------- -----------------------
(Dollars in thousands) % %
Income Statement Data 1998 1997 Change 1998 1997 Change
----------------------------------------------------------------
Revenues $ 393,883 $ 370,868 6% $ 1,542,372 $1,414,386 9%
Cost of services 91,101 84,840 7% 359,762 333,561 8%
Sales and marketing expenses 13,529 7,301 85% 47,325 46,073 3%
Depreciation and amortization 64,365 61,465 5% 257,844 235,812 9%
Other operating expenses 180,495 159,103 13% 688,624 592,008 16%
Operating income 44,393 58,159 -24% 188,817 206,932 -9%
Special items (1) (4,343) - (10,648) (191,090)
Operating income including special items 40,050 58,159 -31% 178,169 15,842 1025%
Investment and other income 18,580 8,789 111% 53,916 42,931 26%
Interest expense 27,666 27,995 -1% 112,239 107,584 4%
Special items (2) (31,905) 78,734 (34,239) 72,504
Income taxes (3,852) 36,950 -110% 22,337 7,383 203%
Convertible preferred dividends 1,553 1,553 - 6,210 6,210 -
Net income as reported 1,358 79,184 -98% 57,060 10,100 465%
Net income excluding special items 23,730 28,007 -15% 85,658 94,087 -9%
Net income excluding special items and ELI 31,926 36,014 -11% 120,376 117,912 2%
Per-Share Data (3)
Basic and diluted net income per share of common stock
as reported $ .01 $ .31 -97% $ .22 $ .04 450%
Basic net income per share of common stock
excluding special items $ .09 $ .11 -18% $ .33 $ .36 -8%
Basic net income per share of common stock
excluding special items and ELI $ .12 $ .14 -14% $ .47 $ .45 4%
Weighted average shares outstanding 259,679 258,868 258,879 260,226
(1) For 1998, special items include Y2K and separation costs. For 1997, special
items include the charges to earnings for certain assets deemed no longer
recoverable, the effects of certain regulatory commission orders and the
cutback of certain long distance service operations.
(2) For 1998, special items include the write down of the Company's investment
in HTCC and the cumulative effect in accounting principle at ELI. For 1997,
special items include the nonoperating gain on sale of subsidiary stock
offset by charges to earnings for certain regulatory commission orders.
(3) 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>
For the quarter ended For the year ended
December 31, December 31,
--------------------- ------------------
(Dollars in thousands) % %
Income Statement Data 1998 1997 Change 1998 1997 Change
-----------------------------------------------------------
Revenues $ 393,883 $370,868 6% $1,542,372 $ 1,414,386 9%
Cost of services 91,101 84,840 7% 359,762 333,561 8%
Sales and marketing expenses 13,529 7,301 85% 47,325 46,073 3%
Depreciation and amortization 64,365 61,465 5% 257,844 235,812 9%
Other operating expenses 180,495 159,103 13% 688,624 592,008 16%
Operating income 44,393 58,159 -24% 188,817 206,932 -9%
Special items (1) (4,343) - (10,648) (191,090)
Operating income including special items 40,050 58,159 -31% 178,169 15,842 1025%
Investment and other income 18,580 8,789 111% 53,916 42,931 26%
Interest expense 27,666 27,995 -1% 112,239 107,584 4%
Special items (2) (31,905) 78,734 (34,239) 72,504
Income taxes (3,852) 36,950 -110% 22,337 7,383 203%
Convertible preferred dividends 1,553 1,553 0% 6,210 6,210 0%
Net income as reported 1,358 79,184 -98% 57,060 10,100 465%
Net income excluding special items 23,730 28,007 -15% 85,658 94,087 -9%
Net income excluding special items and ELI 31,926 36,014 -11% 120,376 117,912 2%
Cash Flow and Capital Expenditure Data (excludes special items)
EBITDA (3) 127,337 132,414 -4% 500,577 485,676 3%
EBITDA excluding ELI (3) 142,199 136,063 5% 545,190 511,945 6%
Cash flow from operations 37,852 54,443 -30% 268,940 260,553 3%
Cash flow from operations excluding ELI 45,121 53,592 -16% 305,716 277,742 10%
Capital expenditures 181,676 206,253 -12% 522,032 524,489 0%
Capital expenditures excluding ELI 122,204 150,345 -19% 322,032 399,940 -19%
Free cash flow (4) (143,824) (151,810) 5% (253,092) (263,936) 4%
Free cash flow excluding ELI (4) (77,083) (96,753) 20% (16,316) (122,198) 87%
Select Balance Sheet Data
Cash and investments $ 446,683 $ 433,662 3%
Total assets 5,292,932 4,872,852 9%
Net plant 4,048,623 3,667,793 10%
Long-term debt 1,900,246 1,706,532 11%
Equity (5) 1,994,021 1,880,461 6%
Shares of common stock outstanding 259,149 258,609 0%
Weighted average shares outstanding (6) 259,679 258,868 0% 258,879 260,226 -1%
Per-Share Data (6)
Basic and diluted net income per share of
common stock as reported $ .01 $ .31 -97% $ .22 $ .04 450%
Basic net income per share of common stock
excluding special items $ .09 $ .11 -18% $ .33 $ .36 -8%
Basic net income per share of common stock
excluding special items and ELI $ .12 $ .14 -14% $ .47 $ .45 4%
Operating cash flow per share $ .14 $ .21 -33% $ 1.01 $ .89 13%
Operating cash flow per share excluding special items $ .15 $ .21 -29% $ 1.04 $ 1.00 4%
Operating cash flow per share excluding special items
and ELI $ .17 $ .21 -19% $ 1.18 $ 1.07 10%
Book value per share $ 6.93 $ 6.45 7%
Other Financial Data
Long-term debt to long-term debt and equity 49% 48%
Long-term debt to long-term debt and equity excluding ELI 44% 47%
Interest coverage (7) 3.3x 7.4x 4.1x 3.4x
Interest coverage excluding special items (7) 4.6x 4.7x 4.5x 4.5x
Interest coverage excluding special items and ELI (7) 5.1x 4.9x 4.9x 4.8x
Common equity market capitalization (in billions) $ 2.1 $ 2.4
Equity market capitalization (in billions) (8) $ 2.2 $ 2.6
Market capitalization (in billions) (9) $ 4.1 $ 4.4
ELI public enterprise value (in billions) (10) $ 0.7 $ 0.8
(1) For 1998, special items include Y2K and separation costs. For 1997, special
items include the charges to earnings for certain assets deemed no longer
recoverable, the effects of certain regulatory commission orders and the
cutback of certain long distance service operations.
(2) For 1998, special items include the write down of the Company's investment
in HTCC and the cumulative effect in accounting principle at ELI. For 1997,
special items include the nonoperating gain on sale of subsidiary stock
offset by charges to earnings for certain regulatory commission orders.
(3) Earnings before interest expense, income taxes, depreciation and
amortization.
(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.
(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.
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>
For the quarter ended For the year ended
December 31, December 31,
--------------------- -----------------------
% %
(Dollars in thousands, except operating data) 1998 1997 Change 1998 1997 Change
------------------------------ ---------------------------------
Citizens Communications
Select Income Statement Data
Revenues
Network access services $ 116,686 $ 100,606 16% $ 432,018 $ 403,990 7%
Local network services 67,486 61,293 10% 262,239 250,521 5%
Long distance services 21,962 27,706 -21% 96,584 104,914 -8%
Directory services 7,934 7,693 3% 31,691 31,982 -1%
Other 9,816 12,496 -21% 44,914 48,922 -8%
Eliminations (1) (9,321) (6,242) 49% (32,407) (23,573) 37%
Total revenues 214,563 203,552 5% 835,039 816,756 2%
Cost of services (network expenses) 21,899 19,387 13% 89,514 96,303 -7%
Sales and marketing expenses 3,992 5,265 -24% 19,744 32,168 -39%
Depreciation 44,467 45,618 -3% 181,656 175,363 4%
Other operating expenses 110,962 101,272 10% 414,772 399,693 4%
Eliminations (1) (10,117) (6,968) 45% (35,468) (26,914) 32%
Operating income 43,360 38,978 11% 164,821 140,143 18%
Special items (2) (2,914) - (7,254) (142,723)
Operating income/(loss) including special items 40,446 38,978 4% 157,567 (2,580) 6207%
Operating margin 20% 19% 20% 17%
Cash Flow and Capital Expenditure Data
Operating cash flow (3) $ 87,827 $ 84,596 4% $ 346,477 $ 315,506 10%
Capital expenditures 69,945 90,851 -23% 201,453 263,011 -23%
Free cash flow (4) 17,882 (6,255) 386% 145,024 52,495 176%
EBITDA margin (5) 41% 42% 41% 39%
Select Balance Sheet Data
Total assets $2,434,183 $2,379,936 2%
Net plant 2,122,794 2,024,220 5%
Operating Data
Access lines 951,513 895,880 6%
Long distance customers- in territory 230,871 236,000 -2%
- out of territory 8,101 22,000 -63%
- total 238,972 258,000 -7%
Revenue per access line $ 225 $ 227 -1% $ 878 $ 912 -4%
In-territory access minutes of use (in millions) 1,073 1,147 -6% 4,526 4,496 1%
Citizens' long distance minutes of use (in millions)
-in territory 119 121 -2% 483 435 11%
-out of territory 35 99 -65% 221 414 -47%
-total 154 220 -30% 704 849 -17%
Citizens' long distance in territory minutes of use market share 19% 20%
Citizens' long distance in territory customer market share 24% 26%
(1) Eliminations represent network access revenues received by the Company's
local exchange operations from its long-distance and competitive local
exchange operations.
(2) For 1998, special items include Y2K and separation costs. For 1997, special
items include the charge to earnings.
(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.
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>
For the quarter ended For the year ended
December 31, December 31,
---------------------- -------------------------
% %
(Dollars in thousands, except operating data) 1998 1997 Change 1998 1997 Change
--------------------------------- ------------------------------------
Electric Lightwave, Inc. (1)
Select Income Statement Data
Revenues
Network services $ 10,102 $ 10,222 -1% $ 36,589 $ 33,522 9%
Local telephone services 14,389 4,429 225% 38,169 10,565 261%
Long distance services 6,076 2,042 198% 12,309 8,140 51%
Data services 3,149 2,267 39% 13,813 8,857 56%
Eliminations (1) (796) (726) 10% (3,061) (3,341) -8%
Total revenues 32,920 18,234 81% 97,819 57,743 69%
Cost of services (network expenses) 19,568 5,329 267% 50,957 29,546 72%
Gross margin 13,352 12,905 3% 46,862 28,197 66%
Sales and marketing expenses 9,537 5,189 84% 27,581 13,905 98%
Depreciation 5,248 4,274 23% 17,002 11,167 52%
Other operating expenses 23,388 15,365 52% 77,926 40,561 92%
Operating loss (24,821) (11,923) -108% (75,647) (37,436) -102%
Special items (2) (276) - (276) (10,765)
Operating loss including special items (25,097) (11,923) -110% (75,923) (48,201) -58%
Cash Flow and Capital Expenditure Data
Operating cash flow (3) $ (19,573) $ (7,649) -156% $ (58,645) $ (26,269) -123%
Capital expenditures 59,472 55,908 6% 200,000 124,549 61%
Free cash flow (4) (79,045) (63,557) -24% (258,645) (150,818) -71%
Select Balance Sheet Data
Total assets $ 532,309 $ 359,962 48%
Gross plant - owned 528,582 328,664 61%
- leased 108,541 87,426 24%
- total 637,123 416,090 53%
Operating Data
Route miles 3,091 2,494 24%
Fiber miles 181,368 140,812 29%
Customers 1,644 1,165 41%
Buildings connected 766 610 26%
Employees 1,090 573 90%
Revenue per employee $ 30,202 $ 31,822 -5% $ 89,742 $ 100,773 -11%
(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) For 1998, special items include Y2K and separation costs. For 1997, special
items include the charge to earnings.
(3) Operating loss excluding special items 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>
For the quarter ended For the year ended
December 31, December 31,
------------------------ -------------------------
% %
(Dollars in thousands, except operating data) 1998 1997 Change 1998 1997 Change
---------------------------------- -----------------------------------
Citizens Public Services
Select Income Statement Data
Revenues
Residential distribution $ 73,048 $ 80,695 -9% $ 307,440 $ 298,866 3%
Commercial distribution 44,568 43,565 2% 181,669 135,671 34%
Industrial distribution 22,766 19,574 16% 87,924 74,856 17%
Municipal distribution 2,722 3,450 -21% 11,922 12,136 -2%
Total distribution 143,104 147,284 -3% 588,955 521,529 13%
Transportation / transmission 1,212 1,477 -18% 5,262 5,316 -1%
Other 2,084 321 549% 15,297 13,042 17%
Total revenues 146,400 149,082 -2% 609,514 539,887 13%
Cost of services (1) 59,751 67,092 -11% 254,759 234,626 9%
Gross margin 86,649 81,990 6% 354,755 305,261 16%
Depreciation 14,650 11,573 27% 59,186 49,282 20%
Other operating expenses 46,144 39,313 17% 195,926 151,754 29%
Operating income 25,855 31,104 -17% 99,643 104,225 -4%
Special items (2) (1,153) - (3,118) (37,602)
Operating income including special items 24,701 31,104 -21% 96,525 66,623 45%
Cash Flow and Capital Expenditure Data
Operating cash flow (3) $ 40,505 $ 42,677 -5% $ 158,829 $ 153,507 3%
Capital expenditures 44,758 51,204 -13% 95,456 103,595 -8%
Free cash flow (4) (4,253) (8,527) 50% 63,373 49,912 27%
Select Balance Sheet Data
Total assets $ 1,631,635 $1,580,181 3%
Net plant 1,344,643 1,269,271 6%
Operating Data
Customers 867,300 845,600 3%
Employees 1,787 1,719 4%
Customers per employee 485 492 -1%
Gross margin (net revenue) per employee $ 48,489 $ 47,696 2% $ 198,520 $ 177,581 12%
(1) Natural gas, electric energy and fuel oil purchased.
(2) For 1998, special items include Y2K and separation costs. For 1997, special
items include the charge to earnings.
(3) Operating income excluding special items 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
Financial and Operating Data by Service
<TABLE>
<CAPTION>
<S> <C> <C>
For the quarter ended For the year ended
December 31, December 31,
------------------------- ------------------------
% %
(Dollars in thousands, except operating data) 1998 1997 Change 1998 1997 Change
----------------------------------- ----------------------------------
Citizens Public Services
Gas
Select Income Statement Data
Revenues
Residential distribution $ 32,573 $ 43,341 -25% $ 150,386 $ 145,016 4%
Commercial distribution 25,790 25,801 0% 109,259 64,004 71%
Industrial distribution 12,905 8,495 52% 47,497 30,366 56%
Municipal distribution 703 935 -25% 3,657 3,251 12%
Total distribution 71,971 78,572 -8% 310,799 242,637 28%
Transportation 622 803 -23% 2,435 2,622 -7%
Other 2,958 (127) 2429% 12,189 6,839 78%
Total revenues 75,551 79,248 -5% 325,423 252,098 29%
Cost of services (gas purchased) 39,596 45,302 -13% 166,829 139,900 19%
Gross margin 35,955 33,946 6% 158,594 112,198 41%
Depreciation 6,955 3,672 89% 24,084 15,587 55%
Other operating expenses 18,726 16,258 15% 90,753 54,704 66%
Operating income 10,274 14,016 -27% 43,757 41,907 4%
Special items (1) (567) - (1,532) (12,707)
Operating income including special items 9,707 14,016 -31% 42,225 29,200 45%
Cash Flow and Capital Expenditure Data
Operating cash flow (2) $ 17,229 $ 17,688 -3% $ 67,841 $ 57,494 18%
Capital expenditures 18,275 23,684 -23% 45,768 47,880 -4%
Free cash flow (3) (1,046) (5,996) 83% 22,073 9,614 130%
Select Balance Sheet Data
Total assets $ 554,028 $ 530,696 4%
Net plant 444,126 423,533 5%
Operating Data
Customers 457,200 446,100 2%
Employees 958 923 4%
Customers per employee 477 483 -1%
Gross margin (net revenue) per employee $ 37,531 $ 36,778 2% $ 165,547 $ 121,558 36%
Billion Cubic Feet of gas throughput (BCF) 29.0 25.0 16% 108.8 80.3 35%
(1) For 1998, special items include Y2K and separation costs. For 1997, special
items include the charge to earnings.
(2) Operating income excluding special items 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>
For the quarter ended For the year ended
December 31, December 31,
------------------------ ------------------------
% %
(Dollars in thousands, except operating data) 1998 1997 Change 1998 1997 Change
---------------------------------- ----------------------------------
Citizens Public Services
Electric
Select Income Statement Data
Revenues
Residential distribution $ 17,918 $ 19,544 -8% $ 80,887 $ 83,108 -3%
Commercial distribution 14,410 13,909 4% 57,617 57,455 0%
Industrial distribution 9,598 10,847 -12% 39,393 43,529 -10%
Municipal distribution 2,019 2,515 -20% 8,265 8,885 -7%
Total distribution 43,945 46,815 -6% 186,162 192,977 -4%
Transmission 590 674 -12% 2,827 2,694 5%
Other 553 (833) 166% 1,318 2,399 -45%
Total revenues 45,088 46,656 -3% 190,307 198,070 -4%
Cost of services (electric energy and fuel oil purchased) 20,155 21,790 -8% 87,930 94,726 -7%
Gross margin 24,933 24,866 0% 102,377 103,344 -1%
Depreciation 5,104 5,428 -6% 22,733 22,195 2%
Other operating expenses 12,683 8,796 44% 51,898 45,372 14%
Operating income 7,146 10,642 -33% 27,746 35,777 -22%
Special items (1) (242) - (653) (22,054)
Operating income including special items 6,904 10,642 -35% 27,093 13,723 97%
Cash Flow and Capital Expenditure Data
Operating cash flow (2) $ 12,250 $ 16,070 -24% $ 50,479 $ 57,972 -13%
Capital expenditures 6,025 12,095 -50% 18,895 23,544 -20%
Free cash flow (3) 6,225 3,975 57% 31,584 34,428 -8%
Select Balance Sheet Data
Total assets $ 479,210 $ 492,926 -3%
Net plant 386,299 388,162 0%
Operating Data
Customers 115,400 111,800 3%
Employees 300 303 -1%
Customers per employee 385 369 4%
Gross margin(net revenue) per employee $ 83,110 $ 82,066 1% $ 341,257 $ 341,069 0%
Megawatt hours sold 434,844 397,349 9% 1,745,419 1,655,121 5%
Megawatt hours generated 93,873 93,744 0% 367,285 353,390 4%
Megawatt hours purchased 352,252 364,638 -3% 1,533,163 1,533,584 0%
(1) For 1998, special items include Y2K and separation costs. For 1997, special
items include the charge to earnings.
(2) Operating income excluding special items 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>
For the quarter ended For the year ended
December 31, December 31,
----------------------- -----------------------
% %
(Dollars in thousands, except operating data) 1998 1997 Change 1998 1997 Change
-------------------------------- --------------------------------
Citizens Public Services
Water/Wastewater
Select Income Statement Data
Revenues
Residential distribution $ 22,557 $ 17,810 27% $ 76,167 $ 70,742 8%
Commercial distribution 4,368 3,855 13% 14,793 14,212 4%
Industrial distribution 263 232 13% 1,034 961 8%
Other (1,427) 1,281 -211% 1,790 3,804 -53%
Total revenues 25,761 23,178 11% 93,784 89,719 5%
Depreciation 2,591 2,473 5% 12,369 11,500 8%
Other operating expenses 14,736 14,259 3% 53,275 51,678 3%
Operating income 8,434 6,446 31% 28,140 26,541 6%
Special items (1) (344) - (933) (2,841)
Operating income including special items 8,090 6,446 26% 27,207 23,700 15%
Cash Flow and Capital Expenditure Data
Operating cash flow (2) $ 11,025 $ 8,919 24% $ 40,509 $ 38,041 6%
Capital expenditures 20,458 15,425 33% 30,793 32,171 -4%
Free cash flow (3) (9,433) (6,506) -45% 9,716 5,870 66%
Select Balance Sheet Data
Total assets $ 598,397 $ 556,559 8%
Net plant 514,218 457,576 12%
Operating Data
Customers 294,700 287,700 2%
Employees 352 364 -3%
Customers per employee 837 790 6%
Revenue per employee $ 73,185 $ 63,676 15% $ 266,432 $ 246,481 8%
Billions of gallons of water delivered 6.8 6.9 -1% 29.6 31.4 -6%
Billions of gallons of wastewater treated 1.1 1.1 0% 5.1 5.0 2%
(1) For 1998, special items include Y2K and separation costs. For 1997, special
items include the charge to earnings.
(2) Operating income excluding special items 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>
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 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>
