<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM __________ TO __________
COMMISSION FILE NUMBER 1-06590
[COX COMMUNICATIONS LOGO APPEARS HERE]
COX COMMUNICATIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 58-2112281
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
1400 LAKE HEARN DRIVE, N.E., 30319
ATLANTA, GEORGIA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
Registrant's telephone number, including area code: (404) 843-5000
_______________
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ____
_______________
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
There were 256,542,395 shares of Class A Common Stock outstanding as of May
1, 1997.
There were 13,798,896 shares of Class C Common Stock outstanding as of May
1, 1997.
<PAGE>
COX COMMUNICATIONS, INC.
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1997
TABLE OF CONTENTS
PAGE
----
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.................................... 2
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS..................... 9
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K........................ 11
SIGNATURES....................................................... 12
<PAGE>
<TABLE>
<CAPTION>
Part I - Financial Information
Item 1. Financial Statements
Cox Communications, Inc.
Consolidated Balance Sheets
<S> <C> <C>
MARCH 31 DECEMBER 31
1997 1996
------------ -----------
(UNAUDITED)
(THOUSANDS OF DOLLARS)
ASSETS
Cash................................................................ $ 71,203 $ 42,349
Accounts and notes receivable, less allowance for doubtful
accounts of $8,339 and $7,778..................................... 119,519 122,574
Net plant and equipment............................................. 1,694,513 1,531,811
Investments......................................................... 1,197,528 1,219,082
Intangible assets................................................... 2,578,860 2,728,955
Other assets........................................................ 120,940 139,819
----------- -----------
Total assets................................................... $ 5,782,563 $ 5,784,590
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued expenses............................... $ 224,534 $ 220,859
Deferred income..................................................... 33,157 29,440
Deferred income taxes............................................... 367,618 294,453
Other liabilities................................................... 61,547 97,526
Debt................................................................ 2,816,658 2,823,853
Amounts due to Cox Enterprises, Inc ("CEI")......................... 74,069 57,147
----------- -----------
Total liabilities.............................................. 3,577,583 3,523,278
----------- -----------
Commitments and Contingencies (Note 8)
Shareholders' equity
Preferred Stock, $1 par value; 5,000,000 shares authorized;
none issued.................................................... -- --
Class A Common Stock, $1 par value; 286,000,000 shares
authorized; shares issued and outstanding: 256,521,365
and 256,463,651................................................ 256,521 256,464
Class C Common Stock, $1 par value; 14,000,000 shares
authorized; shares issued and outstanding: 13,798,896.......... 13,799 13,799
Additional paid-in capital........................................ 1,781,649 1,742,121
Retained earnings................................................. 178,275 216,097
Foreign currency translation adjustment........................... 10,405 23,424
Net unrealized gain (loss) on securities.......................... (35,669) 9,407
---------- -----------
Total shareholders' equity..................................... 2,204,980 2,261,312
---------- -----------
Total liabilities and shareholders' equity..................... $ 5,782,563 $ 5,784,590
=========== ===========
</TABLE>
See notes to consolidated financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
Cox Communications, Inc.
Consolidated Statements of Income
Three Months
Ended March 31
-----------------------------
1997 1996
------------- -------------
(UNAUDITED)
(THOUSANDS OF DOLLARS)
<S> <C> <C>
REVENUES
Complete basic................................................. $ 263,077 $ 247,631
New product tier............................................... 4,748 3,204
Premium service................................................ 45,756 47,631
Pay-per-view................................................... 10,972 12,920
Advertising.................................................... 21,273 20,517
Satellite...................................................... 25,866 17,649
Other.......................................................... 11,418 7,946
------------ ------------
Total revenues............................................... 383,110 357,498
COSTS AND EXPENSES
Programming costs.............................................. 95,685 89,016
Plant operations............................................... 38,111 34,811
Marketing...................................................... 15,511 16,657
General and administrative..................................... 69,893 65,028
Satellite operating and administrative......................... 24,348 15,655
Depreciation................................................... 72,847 55,862
Amortization................................................... 17,050 18,500
------------ ------------
OPERATING INCOME.................................................. 49,665 61,969
Interest expense.................................................. (46,816) (34,505)
Equity in net losses of affiliated companies...................... (81,281) (19,257)
Gain on exchanges of cable systems 24,642 --
Gain on sale of affiliated companies.............................. 2,936 4,640
Other, net........................................................ 4,000 4,757
------------ ------------
INCOME (LOSS) BEFORE INCOME TAXES................................. (46,854) 17,604
Income Taxes...................................................... (9,032) 10,247
------------ ------------
NET INCOME (LOSS)................................................. $ (37,822) $ 7,357
============ ============
PER SHARE DATA
Net income (loss) per share..................................... (0.14) 0.03
Weighted-average number of common
shares outstanding......................................... 270,312,756 270,164,090
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
Cox Communications, Inc.
Consolidated Statements of Shareholders' Equity
Net
Foreign unrealied
Common Stock Additional currency gain
--------------------- paid-in Retained translation (loss) on
Class A Class C capital earnings adjustment securities Total
--------------------- ---------- --------- ---------- ----------- --------
(unaudited)
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1996............ $ 256,464 $ 13,799 $1,742,121 $216,097 $ 23,424 $ 9,407 $2,261,312
Net loss.............................. (37,822) (37,822)
Issuance of stock related to
stock compensation plans........... 57 954 1,011
Capital contribution by CEI........... 38,574 38,574
Foreign currency translation
adjustment.......................... (13,019) (13,019)
Change in net unrealized gain (loss)
on securities....................... (45,076) (45,076)
--------- --------- ---------- -------- -------- --------- ----------
Balance at March 31, 1997............... $ 256,521 $ 13,799 $1,781,649 $178,275 $ 10,405 $ (35,669) $2,204,980
========= ========= ========== ======== ======== ========= ==========
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
Cox Communications, Inc.
Consolidated Statements of Cash Flows
Three Months
Ended March 31
----------- -----------
1997 1996
----------- -----------
(unaudited)
(Thousands of Dollars)
<S> <C> <C>
Cash flows from operating activities
Net income (loss).................................................... $ (37,822) $ 7,357
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
Depreciation....................................................... 72,847 55,862
Amortization....................................................... 17,050 18,500
Equity in net losses of affiliated companies....................... 81,281 19,257
Deferred income taxes.............................................. 910 (27,108)
Gain on exchange of cable systems.................................. (24,642) --
Gain on sale of affiliated companies............................... (2,936) (4,640)
Increase in accounts and notes receivable............................ 583 12,660
Increase (decrease) in accounts payable and accrued expenses......... (13,247) 12,578
Increase (decrease) in taxes payable................................. (15,474) 5,760
Other, net........................................................... (7,392) (7,517)
--------- ---------
Net cash provided by operating activities..................... 71,158 92,709
--------- ---------
Cash flows from investing activities
Capital expenditures................................................. (181,404) (109,068)
Investments in affiliated companies.................................. (129,393) (57,984)
Proceeds from sale of affiliated companies........................... 6,983 --
Payments for exchanges of cable systems.............................. (53,442) --
Proceeds from sale of businesses..................................... -- 52,730
Other, net........................................................... (324) 178
--------- ---------
Net cash used in investing activities......................... (357,580) (114,144)
--------- ---------
Cash flows from financing activities
Revolving credit borrowings, net..................................... 300,000 189,010
Commercial paper repayments, net..................................... (55,739) --
Repayment of debt.................................................... (4,305) (1,703)
Proceeds from exercise of stock options.............................. 1,012 829
Increase (decrease) in amounts due to Cox Enterprises, Inc.......... 49,914 (136,662)
Increase (decrease) in book overdrafts............................... 24,394 (3,423)
--------- ---------
Net cash provided by financing activities..................... 315,276 48,051
--------- ---------
Net increase in cash................................................. 28,854 26,616
Cash at beginning of period.......................................... 42,349 39,166
--------- ---------
Cash at end of period................................................ $ 71,203 $ 65,782
========= =========
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
Cox Communications, Inc.
Consolidated Statements of Cash Flows
(Continued)
Three Months
Ended March 31
--------- ---------
1997 1996
--------- ---------
(unaudited)
(Thousands of Dollars)
Significant noncash transactions
Transfer of PCS license............................$ 251,918 -
Additional cash flow information
Interest...........................................$ 28,565 $ 17,361
Income taxes....................................... 5,532 31,579
See notes to consolidated financial statements
6
<PAGE>
COX COMMUNICATIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 1997
1. BASIS OF PRESENTATION AND OTHER INFORMATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnote disclosures required by generally accepted accounting principles for
complete financial statements. In the opinion of management, the financial
statements reflect all adjustments considered necessary for a fair statement of
the results of operations and financial position for the interim periods
presented. All such adjustments are of a normal recurring nature. These
unaudited interim financial statements should be read in conjunction with the
audited consolidated financial statements and notes thereto contained in Cox
Communication, Inc.'s ("Cox") Annual Report on Form 10-K for the year ended
December 31, 1996.
The results of operations for the three months ended March 31, 1997 are not
necessarily indicative of the results to be expected for the year ended December
31, 1997 or any interim period.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Recently Issued Accounting Pronouncements
In February 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings per
Share." This statement establishes standards for computing and presenting
earnings per share ("EPS"). It replaces the presentation of primary EPS with a
presentation of basic EPS. It also requires dual presentation of basic and
diluted EPS on the face of the income statement for all entities with complex
capital structures. Basic EPS excludes dilution and is computed by dividing
income available to common stockholders by the weighted-average number of common
shares outstanding for the period. Diluted EPS is computed similarly to fully
diluted EPS pursuant to APB Opinion No. 15, "Earnings per Share," which is
superseded by this Statement. This Statement requires restatement of all prior-
period EPS data presented. Upon adoption of this Statement in December 1997, the
EPS amounts presented will not be materially different than those previously
presented in accordance with Opinion 15.
Reclassifications
Certain amounts in the 1996 financial statements have been reclassified for
comparative purposes.
7
<PAGE>
COX COMMUNICATIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
3. EXCHANGES OF BUSINESSES
In March 1997, Cox exchanged its Myrtle Beach, South Carolina cable
television system serving approximately 42,230 customers for Time Warner
Entertainment/Advance-Newhouse's ("Time Warner") Hampton and Williamsburg,
Virginia cable television systems serving approximately 45,300 customers. The
transaction included a Texas cable television system serving approximately 7,000
customers which was purchased by Cox and then immediately traded to Time Warner.
Cox recognized a book gain of $27.8 million in conjunction with the exchange.
4. INVESTMENTS
The summarized unaudited financial information presented below for
significant equity method investments served as the basis for which Cox recorded
its share of equity in net losses:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
- ----------------------
(THOUSANDS OF DOLLARS)
SPRINT PIONEER OUTDOOR GEMS
PCS CO TCGI LIFE SPEEDVISION TELEVISION
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MARCH 31, 1997
- --------------
REVENUES $ 9,467 $ 1,079 $ 96,800 $ 2,517 $ 1,480 $ 2,459
OPERATING LOSS (190,814) (41,271) (23,600) (4,712) (7,073) (1,869)
NET LOSS (215,503) (55,645) (45,000) (4,863) (7,278) (2,880)
MARCH 31, 1996
- --------------
REVENUES - - $ 58,100 $ 577 $ 124 $ 2,261
OPERATING LOSS $ (30,978) $ (5,420) (20,300) (3,862) (3,981) (1,545)
NET LOSS (67,358) (5,631) (24,300) (3,883) (4,002) (2,386)
</TABLE>
In April 1997, Cox exchanged its 37.9% interest in UK Gold and 49.6%
interest in UK Living for 20,701,084 shares, or a 12.6% interest, in Flextech
plc, a United Kingdom publicly held programming company. Cox will recognize a
gain related to this transaction during the second quarter of 1997.
In December 1996, pursuant to previous agreements, Cox, CEI, Tele-
Communications, Inc. ("TCI"), Comcast Corporation ("Comcast") and Sprint
Corporation ("Sprint") formed Cox Communications PCS, L.P. ("Cox PCS") to
operate the PCS system in the Los Angeles-San Diego Major Trading Area ("MTA").
Cox PCS is owned 49% by Sprint Spectrum Holding Company L.P. ("Sprint PCS") as
limited partner and 51% by Cox Pioneer Partnership ("CPP") as general partner.
CPP is a jointly controlled partnership owned approximately 78% by Cox and
approximately 22% by CEI. In March 1997, upon approval from the Federal
Communication Commission ("FCC"), Cox transferred the PCS license for the Los
Angeles-San Diego MTA and the related obligation to the FCC of $251.9 million to
Cox PCS. The December 1996 formation of Cox PCS and the March 1997 transfer of
the license and obligation resulted in Cox recording $38.6 million as a capital
contribution from CEI.
<PAGE>
5. DEBT
<TABLE>
<CAPTION>
MARCH 31 DECEMBER 31
1997 1996
---------- -----------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Revolving credit facilities................. $ 749,999 $ 449,999
Commercial paper, net of unamortized
discount of 3,900 and $3,296.............. 662,361 718,704
Medium-term notes, net of unamortized
discount of $697 and $721................. 163,849 166,082
6.375% Notes, due June 15, 2000, net of
unamortized discount of $762 and
and $821.................................. 424,238 424,179
6.5% Notes, due November 15, 2002, net
of unamortized discount of $495 and
$517...................................... 199,505 199,483
6.875% Notes, due June 15, 2005, net of
unamortized discount and hedging of
$13,373 and $13,661....................... 361,627 361,339
7.25% Debentures, due November 15,
2015, net of unamortized discount of
$869 and $880............................. 99,131 99,120
7.625% Debentures, due June 15, 2025,
net of unamortized discount and
hedging of $18,086 and $18,128............ 131,914 131,872
Obligation to the FCC....................... -- 251,918
Capitalized lease obligations............... 24,034 21,157
---------- ----------
Total debt.............................. $2,816,658 $2,823,853
========== ==========
</TABLE>
8
<PAGE>
COX COMMUNICATIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
6. TRANSACTIONS WITH AFFILIATED COMPANIES
Cash requirements are funded by internally generated funds, by various
external financing transactions and, as needed, through intercompany loans from
CEI. CEI performs day-to-day cash management services for Cox, with settlements
of credit or debit balances between Cox and CEI occurring periodically with
interest at market rates (6.1% at March 31, 1997). Included in the amounts due
to CEI are the following transactions:
(THOUSANDS OF DOLLARS)
Balance, December 31, 1996.............................. $ 57,147
Cash transferred from CEI............................... 26,954
Capital contribution by CEI............................. 38,574
Net operating expense allocations
and reimbursement..................................... (48,606)
--------
Balance, March 31, 1997................................. $ 74,069
========
7. SHAREHOLDERS' EQUITY
In April 1997, Cox amended its Certificate of Incorporation thereby
increasing authorized Class A Common Stock from 286,000,000 shares to
316,000,000 shares.
8. COMMITMENTS AND CONTINGENCIES
Cox is a party to various legal proceedings that are ordinary and
incidental to its business. Management does not expect that any legal
proceedings currently pending will have a material adverse impact on Cox's
consolidated financial position or consolidated results of operations.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
accompanying historical Consolidated Statements of Income for the three-month
period ended March 31, 1997 and 1996.
RECENT ACQUISITIONS, DISPOSITIONS, EXCHANGES AND INVESTMENTS
In March 1997, Cox exchanged its Myrtle Beach, South Carolina cable
television system serving approximately 42,230 customers for Time Warner's
Hampton and Williamsburg, Virginia cable television systems serving
approximately 45,300 customers. The transaction included a Texas cable
television system serving approximately 7,000 customers which was purchased by
Cox and then immediately traded to Time Warner. Cox recognized a book gain of
$27.8 million in conjunction with the exchange.
THREE MONTHS ENDED MARCH 31, 1997 COMPARED WITH THREE MONTHS ENDED MARCH 31,
1996
Revenues for the three months ended March 31, 1997 were $383.1 million, a
7% increase over revenues of $357.5 million for the three months ended March 31,
1996. Basic customers were 3,275,267 at March 31, 1997, a decrease from
3,299,983 at March 31, 1996 due to the sales and trades of cable systems during
1996 and 1997. Adjusting for these sales and trades, total revenues increased 9%
over the same quarter in 1996 and basic customers grew 2.4% over customers at
March 31, 1996.
Complete basic revenues for the first quarter of 1997 increased 6% over the
same period in 1996 to $263.1 million due to customer growth and average rate
increases of 6-7% in the fourth quarter of 1996. These rate increases are the
9
<PAGE>
COX COMMUNICATIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
result of new channel additions and the pass-through of inflation adjustments.
New product tier revenues grew 48% to $4.7 million as a result of increased
penetration of these channel offerings.
Premium service revenues for the current quarter were $45.8 million, down
4% from the first quarter of 1996. Although premium units increased to 1,999,568
at March 31, 1997 from 1,900,279 at March 31, 1996, the average rate per unit
was lower in the current quarter due to the continuation of the premium channel
promotion launched in spring 1996.
Pay-per-view revenues for the first quarter of 1997 decreased 15% to $11.0
million; however, excluding revenue of $3.2 million from the March 1996
Tyson/Bruno boxing event, pay-per-view revenues increased 13%. Advertising
revenues increased modestly to $21.3 million; however, excluding non-recurring
revenues of $1.1 million from a 1996 Sprint campaign, advertising revenues
increased 10%.
Revenues from satellite operations were $25.9 million for the current
quarter, a 47% increase over revenues of $17.6 million for the same quarter in
1996 as PrimeStar customers increased to 145,040 at March 31, 1997 from 79,190
at March 31, 1996.
Programming costs were $95.7 million for the first quarter of 1997, an
increase of 7% over the same period in 1996 due to customer growth, January 1997
programming rate increases and new channel additions. Plant operations expenses
increased 9% to $38.1 million due to 1997 annual salary increases and additional
repair and maintenance costs related to systems acquired in the trades during
the current quarter. Marketing costs decreased 7% to $15.5 million for the
current quarter due primarily to costs associated with the February 1996 premium
channel promotion. General and administrative expenses for the first quarter of
1997 increased 7% to $69.9 million due to annual salary increases, the costs
associated with developing and providing high-speed data and telephony services
and bad debt expense.
Operating income before depreciation and amortization ("EBITDA") is a
commonly used financial analysis tool for measuring and comparing cable
television companies in several areas, such as liquidity, operating performance
and leverage. EBITDA increased 2% to $139.6 million for the first quarter of
1997. EBITDA for the core video business, which excludes satellite and Fibernet
operations and $3.2 million of direct costs associated with new services, grew
6% to $140.3 million compared to the first quarter of 1996 after adjusting for
the trades and sales of cable systems.
The EBITDA margin (EBITDA as a percentage of revenues) for the current
quarter was 36.4%, a decrease from 38.1% for the first quarter of 1996 due to
the increase in the direct costs of developing and providing data and telephony
services and the up-front marketing and selling costs associated with new
PrimeStar customers. The core video business EBITDA margin was 39.6% for the
current quarter, a slight decrease from 39.9% in the first quarter of 1996.
Depreciation was $72.8 million for the first quarter of 1997, a 30%
increase compared to the same period in 1996 resulting from the continued
upgrade and rebuild of the broadband network. Operating income for the first
quarter of 1997 was $49.7 million, a decrease of 20% compared to the same period
in 1996.
Interest expense increased $12.3 million to $46.8 million for the first
quarter of 1997 due to the elimination of capitalized interest expense as a
result of Sprint PCS commencing operations. Equity in net losses of affiliated
companies was $81.3 million, a $62.0 million increase over the prior year due to
the losses associated with Sprint PCS, Cox PCS and Teleport. Gain on exchanges
of cable systems includes $27.8 million related to the trade of the Myrtle Beach
system for the Hampton, Virginia systems.
10
<PAGE>
COX COMMUNICATIONS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
Net loss for the current quarter was $37.8 million as compared to net
income of $7.4 million for the first quarter of 1996.
LIQUIDITY AND CAPITAL RESOURCES
Uses of Cash
As part of Cox's ongoing strategic plan, Cox has invested, and will
continue to invest, significant amounts of capital to enhance the reliability
and capacity of its broadband cable network in preparation for the offering of
new services and to make investments in affiliated companies primarily focused
on telephony, programming and communications-related activities.
Capital expenditures are primarily directed at upgrading and rebuilding
broadband cable networks in preparation for the delivery of additional services.
Capital expenditures for 1997 are expected to range between $600 million and
$650 million. During the three months ended March 31, 1997, Cox made capital
expenditures of $181.4 million.
Funding requirements in 1997 for investments in affiliated companies are
expected to be approximately $173 million for Sprint PCS and PhillieCo, $165
million for Cox PCS and $33 million for programming, PrimeStar and other
investments. During the three months ended March 31, 1997, Cox funded
approximately $11.4 million for Sprint PCS, PhillieCo and other telephony
ventures, $107.4 million for Cox PCS and $10.6 million for programming,
PrimeStar and other investments.
During the first three months of 1997, repayments of $55.7 million were
made for the commercial paper program. In addition, payments for exchanges of
cable systems of $53.4 million were made for the trades which closed during the
first quarter of 1997.
Sources of Cash
Cox generated $71.1 million from operating activities during the first
quarter of 1997. In addition, Cox borrowed $300 million of short term debt
during the three months ended March 31, 1997.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.3 -- Certificate of Amendment of Certificate of Incorporation of
Cox Communications, Inc.
27 -- Financial Data Schedule
(b) Reports on Form 8-K filed during the quarter ended March 31, 1997:
Cox filed a Form 8-K on January 23, 1997 reporting that Cox, through
Cox Pioneer Partnership, and Sprint Spectrum Holding Company, L.P.
("Sprint PCS") formed a new limited partnership on December 31, 1996
named Cox Communications PCS, L.P. to operate a personal communication
services system in the Los Angeles-San Diego major trading area.
11
<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 thereunto duly authorized.
COX COMMUNICATIONS, INC.
Date: May 14, 1997 /s/ Jimmy W. Hayes
----------------------------------
Jimmy W. Hayes
Senior Vice President, Finance and
Chief Financial Officer
(Principal Financial Officer)
12
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
COX COMMUNICATIONS, INC.
COX COMMUNICATIONS, INC., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the
"Corporation"),
DOES HEREBY CERTIFY:
FIRST: That, by unanimous written consent in lieu of a meeting of the Board of
Directors of COX COMMUNICATIONS, INC. pursuant to Section 141 (f) of the General
Corporation Law, resolutions were duly adopted setting forth a proposed
amendment to the Certificate of Incorporation of said Corporation, declaring
said amendment to be advisable and submitting the proposed amendment to the
stockholders of the Corporation for consideration thereof. The resolutions
setting forth the proposed amendments are as follows:
RESOLVED, that the Certificate of Incorporation of the Corporation be
amended by changing subsection A of Article V thereof so that, as amended, said
subsection A of Article V shall read as follows: "A. Authorized Shares. The
total number of shares of all classes of capital stock that the Corporation
shall have authority to issue is three hundred thirty-five million (335,000,000)
shares of which (i) three hundred thirty million (330,000,000) shares of a par
value of $1.00 per share shall be Common Stock (the "Common Stock"), and (ii)
five million (5,000,000) shares of a par value of $1.00 per share shall be
Preferred Stock (the "Preferred Stock"). The Common Stock shall be divided into
classes as follows: three hundred sixteen million (316,000,000) shares of Class
A Common Stock ("Class A Stock") and fourteen million (14,000,000) shares of
Class C Common Stock ("Class C Stock")";
FURTHER RESOLVED, that the foregoing amendment to the Certificate of
Incorporation of the Corporation be submitted to the stockholders of the
Corporation for their approval at the next Annual Meeting of Stockholders and
that the Board of Directors recommends that the stockholders of the Corporation
vote in favor of such amendment;
FURTHER RESOLVED, that the foregoing amendment to the Certificate of
Incorporation of the Corporation, subject to approval by the stockholders of the
Corporation, shall be effective upon the effective date of the filing of a
Certificate of Amendment to the Certificate of Incorporation of the Corporation,
substantially in the form attached hereto as Exhibit A, setting forth the
foregoing amendment with the Secretary of State of the State of Delaware.
SECOND: That said amendment was approved by the requisite vote of the
stockholders of the Corporation at the Annual Meeting of Stockholders of the
Corporation.
<PAGE>
THIRD: That said amendment was duly adopted in accordance with the provisions
of Section 242 of the General Corporation Law of the State of Delaware.
FOURTH: That the capital of said Corporation shall not be reduced under or by
reason of said amendment.
<PAGE>
IN WITNESS WHEREOF, said COX COMMUNICATIONS, INC. has caused this
certificate to be signed by James O. Robbins, its President and Chief Executive
Officer, and Andrew A. Merdek, its Secretary, this 21st day of April, 1997.
By: /s/ James O. Robbins
------------------------------
James O. Robbins
President and Chief
Executive Officer
ATTEST: /s/ Andrew A. Merdek
----------------------------
Andrew A. Merdek
Secretary
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
QUARTER ENDED 3/31/97 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 71,203
<SECURITIES> 0
<RECEIVABLES> 127,858
<ALLOWANCES> (8,339)
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 2,410,885
<DEPRECIATION> (716,372)
<TOTAL-ASSETS> 5,782,563
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 0
0
0
<COMMON> (270,320)
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> (5,782,563)
<SALES> 0
<TOTAL-REVENUES> (383,110)
<CGS> 0
<TOTAL-COSTS> 158,144
<OTHER-EXPENSES> 89,897
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 46,816
<INCOME-PRETAX> 46,854
<INCOME-TAX> (9,032)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 37,822
<EPS-PRIMARY> .14
<EPS-DILUTED> 0
<FN>
<F1>Non-classified balance sheet.
</FN>
</TABLE>
