SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report:
May 15, 2000
(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
May 15, 2000 announcing earnings for the quarter
ended March 31, 2000.
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/ Robert J. DeSantis
-----------------------------
Robert J. DeSantis
Vice President and
Chief Financial Officer
Date: May 16, 2000
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
Contact:
Alan Oshiki, Assistant Vice President
Investor Relations
(203) 614-5629
[email protected]
CITIZENS UTILITIES REPORTS FINANCIAL RESULTS FOR THE FIRST QUARTER OF 2000
STAMFORD, Conn., May 15, 2000 - Citizens Utilities (NYSE: CZN) today reported
financial results quarter ended March 31, 2000.
First quarter revenue from continuing operations, net of intercompany
eliminations, was $282.5 million, up 7% from $264.8 million in the first quarter
of 1999. Revenue growth was driven by a 49% increase in revenue from the
company's competitive local exchange carrier subsidiary, Electric Lightwave,
Inc. (NASDAQ:ELIX). Electric Lightwave's revenue totaled $56.8 million for the
quarter compared to $38.2 million for the prior year period. Telecommunications
revenue from the company's incumbent local exchange carrier subsidiaries was
$226.3 million, as compared to $227.2 million for the 1999 first quarter, which
contained a $10 million, one-time subsidy settlement. Exclusive of the one-time
subsidy settlement, Telecommunications revenue for the quarter increased by $9.5
million or 4% over the first quarter of 1999.
First quarter 2000 EBITDA (earnings before interest, taxes, depreciation and
amortization) from continuing operations, net of intercompany eliminations,
totaled $95.5 million, a 38% increase over the prior year quarter.
Telecommunications EBITDA for the quarter was $102.0 million, up 11% from $91.5
million in the prior year period. First quarter Telecommunications EBITDA was
impacted by $3.9 million of assimilation expense related to the pending
acquisition of approximately one million telephone access lines. Absent this
expense EBITDA increased to $105.9 million, which equates to an EBITDA margin of
47%. Absent the one-time subsidy settlement in the comparable quarter last year,
EBITDA increased approximately 31% quarter over quarter.
Electric Lightwave's first quarter EBITDA loss was $6.7 million, a 71%
improvement over the $22.8 million loss of the year ago quarter.
Citizens' net income for first quarter was $7.3 million, or 3 cents per share,
compared to net income of $11.7 million, or 5 cents per share excluding the gain
on the sale of investments, in the first quarter of 1999.
Commenting on the results, Citizens' president and chief operating officer Rudy
Graf said, "As we continue Citizens' transition to a communications company, we
are very pleased with the ongoing performance improvements at our
Telecommunications operations and at Electric Lightwave. The improvement in our
Telecommunications EBITDA margin to 47% over the past twelve months demonstrates
management's focus on and commitment to maximizing the operating performance of
our existing telecommunications operations. We anticipate double-digit growth in
Telecommunications EBITDA to continue throughout the rest of the year. At
Electric Lightwave, we expect revenue growth of about 50% in 2000 and positive
EBITDA in the second half of this year."
Citizens Utilities provides telecommunications services to more than one million
customers in 13 states. In 1999, Citizens agreed to purchase approximately one
million additional access lines in transactions that will begin to close in
mid-2000. 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. In May 2000, Citizens Utilities will change its name to Citizens
Communications. More information about Citizens can be found at www.czn.net.
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
(including oral representations) 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, changes in legal or regulatory policy, changes in legislation, the
company's ability to identify future markets and successfully expand existing
ones, the mix of products and services offered in the company's target markets,
the effects of acquisitions and dispositions and the ability to effectively
integrate businesses acquired. 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.
(Table to Follow)
Citizens Utilities Company and Subsidiaries
Consolidated Financial Data
(unaudited)
<TABLE>
<CAPTION>
For the quarter ended
March 31,
--------------------------
%
(Amounts in thousands - except per-share amounts) 2000 1999 Change
---------------------------------------
<S> <C> <C> <C>
Income Statement Data
Revenues from continuing operations (1) $ 282,455 $ 264,750 7%
Operating income from continuing operations (2) 12,792 7,132 79%
Income from discontinued operations, net of tax 12,447 13,235 -6%
Net income (2) 7,326 11,730 -38%
EBITDA and Capital Expenditure Data (3)
EBITDA from continuing operations $ 95,497 $ 69,017 38%
EBITDA from discontinued operations 47,167 42,947 10%
Total Company EBITDA 142,664 111,964 27%
EBITDA from continuing operations before acquisition assimilation expenses 99,471 69,017 44%
Per-Share Data (4)
Basic net income per share of common stock (2) $ 0.03 $ 0.05 -40%
EBITDA per share from continuing operations 0.36 0.27 33%
EBITDA per share from discontinued operations 0.18 0.17 6%
Total Company EBITDA per share 0.54 0.43 26%
EBITDA per share from continuing operations before acquisition assimilation expenses 0.38 0.27 26%
Weighted average shares outstanding 262,718 259,701 1%
(1) Continuing operations are comprised of the Company's Telecommunications and Electric Lightwave, Inc. (ELI), our Competitive
Local Exchange Carrier (CLEC) businesses. The Company is reporting its Public Services businesses as discontinued operations.
(2) Excludes 1999 gain on sale of investment.
(3) Operating income plus depreciation and amortization.
(4) Calculated based on weighted average shares outstanding.
</TABLE>
Exhibit 99.2
<TABLE>
<CAPTION>
Citizens Utilities Company and Subsidiaries
Consolidated Financial Data
(unaudited)
For the quarter ended
March 31,
------------------------------
%
(Amounts in thousands - except per-share amounts) 2000 1999 Change
-------------------------------------------
Income Statement Data
Continuing operations (1)
<S> <C> <C> <C> <C>
Revenue (2) $ 282,455 $ 254,336 11%
Revenue-Universal service fund settlement - 10,414 -
Network access expense (2) 27,003 34,395 -21%
Depreciation and amortization 82,705 61,885 34%
Other operating expenses (3) 155,981 161,338 -3%
Acquisition assimilation expenses 3,974 - -
Operating income (3) 12,792 7,132 79%
Investment and other income, net (3) 5,265 6,022 -13%
Minority interest 6,285 5,993 5%
Interest expense 29,164 19,098 53%
Gain on sale of investments, net of tax (4) - 42,895 -
Income taxes (1,253) 2 -
Convertible preferred dividends 1,552 1,552 -
Income (loss) from continuing operations (5,121) 41,390 -112%
Income from continuing operations excluding gain on sale of investments (5,121) (1,505) -240%
Income from discontinued operations, net of tax 12,447 13,235 -6%
Net income 7,326 54,625 -87%
Net income excluding gain on sale of investments 7,326 11,730 -38%
EBITDA and Capital Expenditure Data (5)
EBITDA from continuing operations $ 95,497 $ 69,017 38%
EBITDA from discontinued operations 47,167 42,947 10%
Total Company EBITDA 142,664 111,964 27%
Capital expenditures from continuing operations 151,161 96,595 56%
Capital expenditures from discontinued operations 20,753 23,501 -12%
Total Company capital expenditures 171,914 120,096 43%
Balance Sheet Data
Cash and investments $ 590,644 $ 501,388 18%
Total assets 5,758,465 5,313,453 8%
Net plant (continuing operations) 2,946,976 2,731,971 8%
Long-term debt (continuing operations) 2,193,494 1,845,290 19%
Equity (6) 2,070,742 2,037,702 2%
Shares of common stock outstanding 263,196 259,886 1%
Weighted average shares outstanding 262,718 259,701 1%
Per-Share Data (7)
Basic net income per share of common stock $ 0.03 $ 0.21 -86%
Basic net income per share of common stock excluding gain on sale of investments 0.03 0.05 -40%
EBITDA per share from continuing operations 0.36 0.27 33%
EBITDA per share from discontinued operations 0.18 0.17 6%
Total Company EBITDA per share 0.54 0.43 26%
Book value per share 7.12 7.07 1%
Other Financial Data
Long-term debt to long-term debt and equity 51% 48%
Common equity market capitalization (in billions) $ 4.31 $ 2.01
Equity market capitalization (in billions) (6) $ 4.56 $ 2.21
Market capitalization (in billions) (8) $ 6.75 $ 4.06
(1) The Company's Telecommunications and Electric Lightwave, Inc.(ELI), our Competitive Local Exchange Carrier (CLEC) businesses.
The Company is reporting its Public Services businesses as discontinued operations.
(2) Includes the elimination of $635 and $698 of revenue and network access expense related to services provided by ELI
to our telecommunications operations for the 2000 and 1999 periods respectively.
(3) Includes the elimination of $192 and $325 of administrative fees charged by the Company to ELI for the 2000 and 1999
periods respectively.
(4) Represents a gain of $69.5 million net of $26.6 million of income taxes on the sale of Centennial Cellular stock.
(5) Operating income plus depreciation and amortization.
(6) Includes convertible preferred securities.
(7) Calculated based on weighted average shares outstanding.
(8) Equity market capitalization plus market value of long-term debt.
</TABLE>
<PAGE>
Citizens Utilities Company and Subsidiaries
Financial and Operating Data by Service
<TABLE>
<CAPTION>
For the quarter ended
March 31,
------------------------------
%
(Dollars in thousands, except operating data) 2000 1999 Change
----------------------------------------
Telecommunications
Income Statement Data
Revenue
<S> <C> <C> <C>
Network access services $ 121,656 $ 118,266 3%
Network access services - USF settlement - 10,414 -
Local network services 73,555 69,913 5%
Long distance and data services 20,066 21,101 -5%
Directory services 8,819 8,397 5%
Other 12,649 9,794 29%
Eliminations (1) (10,433) (10,653) -
Total revenue 226,312 227,232 -
Network access expense 17,375 20,522 -15%
Depreciation and amortization 69,950 54,891 27%
Other operating expenses 113,426 125,862 -10%
Acquisition assimilation expenses (2) 3,974 - -
Eliminations (1) (10,433) (10,653) -
Total expense 194,292 190,622 2%
Operating income 32,020 36,610 -13%
EBITDA and Capital Expenditure Data
EBITDA (3) $ 101,970 $ 91,501 11%
EBITDA margin (4) 45% 40% 13%
Capital expenditures 97,453 38,484 153%
Balance Sheet Data
Total assets $ 2,437,620 $ 2,399,398 2%
Net plant 2,103,506 2,084,400 1%
Operating Data
Access lines 1,007,250 964,634 4%
Revenue per access line $ 225 $ 236 -5%
Switched access minutes of use (in millions) 1,323 1,241 7%
Employees 3,627 3,562 2%
Citizens' long distance minutes of use (in millions) - in territory 139 125 11%
- out of territory 5 28 -82%
- total 144 153 -6%
Citizens' long distance customers - in territory 242,105 235,219 3%
- out of territory 1,627 6,267 -74%
- total 243,732 241,486 1%
Citizens' long distance in-territory customer market share 24% 24%
(1) Eliminations represent network access revenue and network access expense
between the Company's local exchange operations and long-distance operations.
(2) Represents expenses associated with telecommunications properties to be acquired.
(3) Operating income plus depreciation and amortization.
(4) EBITDA divided by total revenue.
</TABLE>
<PAGE>
Citizens Utilities Company and Subsidiaries
Financial and Operating Data by Service
<TABLE>
<CAPTION>
For the quarter ended
March 31,
---------------------------------------
%
(Dollars in thousands, except operating data) 2000 1999 Change
-----------------------------------------------------
Electric Lightwave, Inc.
<S> <C> <C> <C>
Income Statement Data
Revenue
Network services $ 16,004 $ 10,424 54%
Local telephone services 24,274 14,308 70%
Long distance services 4,596 8,530 -46%
Data services 11,904 4,954 140%
Total revenue 56,778 38,216 49%
Network access expense 20,696 25,224 -18%
Gross margin 36,082 12,992 178%
Depreciation and amortization 12,755 6,994 82%
Other operating expenses 42,747 35,801 19%
Total expense 55,502 42,795 30%
Operating loss (19,420) (29,803) 35%
EBITDA and Capital Expenditure Data
EBITDA (1) $ (6,665) $ (22,809) 71%
Capital expenditures 53,693 57,000 -6%
Balance Sheet Data
Total assets $ 809,026 $ 574,418 41%
Gross plant - owned 824,671 585,533 41%
- leased 108,541 108,541 -
- total 933,212 694,074 34%
Other Financial Data
ELI public enterprise value (2) $ 1,933,375 $ 859,157 125%
(1) Operating income plus depreciation and amortization.
(2) Common equity market capitalization plus net debt.
</TABLE>
