ALLTEL REPORTS STRONG SECOND-QUARTER EARNINGS
For additional information contact:
George Smith 501-905-8117
Vice President - Media Services
george.s.smith @alltel.com
Kerry Brooks 501-905-8991
Vice President - Investor Relations
[email protected]
Release date: July 19, 2000
LITTLE ROCK, Ark. - ALLTEL today announced strong second-quarter results from
current businesses, which exclude one-time adjustments. The results reflect the
impact of the first phase of a wireless property exchange with Bell Atlantic and
GTE.
"The integration of the new markets is going extremely well," said Joe T. Ford,
ALLTEL chairman and chief executive officer. "We are pleased to report strong
financial results for the quarter that are in line with our targets."
Among the highlights from current businesses in the second quarter:
Communications revenue grew 13 percent to $1.4 billion, driven by wireless
growth of 14 percent.
Revenues and earnings per share grew 9 percent to $1.8 billion and 74 cents
per share.
Wireless operations added 81,000 customers. Combined with the nearly
690,000 customers acquired in the quarter, ALLTEL's wireless subscriber
base totals 5.9 million.
Wireless operating cash flow and operating income margins were 42 percent
and 31 percent, respectively.
Operating income from ALLTEL's wireline business grew 13 percent to $168
million on revenue growth of 5 percent.
Wireline operating cash flow and operating income margins were 58 percent
and 38 percent, respectively.
Revenues from emerging businesses grew 46 percent as ALLTEL surpassed 1
million long-distance customers.
Revenues at ALLTEL Information Services grew by 2 percent to $319 million
and operating cash flow grew by 5 percent to $83 million.
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On June 30, ALLTEL completed the remaining wireless property exchanges with Bell
Atlantic and GTE involving properties in 13 states, giving the company a strong
position in the key markets of Phoenix, Cleveland and Tampa.
ALLTEL now has cost-effective access to a wireless footprint covering nearly 95
percent of the U.S. population.
ALLTEL netted about 690,000 customers in the exchange, increasing ALLTEL's
customer base to 5.9 million and making ALLTEL the fifth-largest wireless
carrier in the nation.
"ALLTEL is offering profitable national wireless rate plans that eliminate
long-distance and roaming charges for our customers," Ford said. "Our Total
Freedom plans, combined with our bundling strategy, will help us capture an
increasing share of the $46 billion in addressable communications spending that
is up for grabs in our markets."
ALLTEL also took steps to enhance wireless Internet services for its customers.
The company signed major agreements with InfoSpace, Phone.com and Software.com.
"ALLTEL is committed to providing our customers with access to the Internet
through wireless handsets," Ford said. "We now offer wireless Internet in eight
markets and will roll out the service in the majority of our digital markets by
the end of the third quarter."
In addition, ALLTEL began deploying equipment for a fixed wireless local loop
trial for residential customers. "We are very excited about the opportunity this
technology presents, as it could substantially improve the way we deploy
competitive local telephone service in our wireless markets," Ford said. "We
remain on course to reach 43 cities with our competitive local phone service by
the end of 2000."
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ALLTEL Information Services finalized plans to open a mortgage-processing and
support office in Bingley, West Yorkshire, England. The office is a joint
venture with the Bradford & Bingley Group, a top 10 United Kingdom mortgage
lender.
"The joint venture will use ALLTEL's leading-edge technology to further advance
our competitive position in the European market," Ford said.
ALLTEL's results for the quarter included several one-time items, related
primarily to the Bell Atlantic/GTE property exchanges. ALLTEL reported a $1.4
billion gain from the transaction and $6.8 million in name-change expenses and
restructuring charges. ALLTEL also had a write-off of $15 million relating to
its investment in an Internet circuit provider.
ALLTEL, with more than 9 million communications customers, $6.7 billion in
annual revenues and 26,000 employees, is a leader in the communications and
information services industries. ALLTEL has communications customers in 23
states and provides information services to telecommunications, financial and
mortgage clients in 55 countries and territories.
-end-
ALLTEL, NYSE: AT
www.alltel.com
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<TABLE>
<CAPTION>
ALLTEL CORPORATION
CONSOLIDATED HIGHLIGHTS
(Dollars in thousands, except per share amounts)
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
Increase Increase
(Decrease) (Decrease)
FROM CURRENT BUSINESSES 2000 1999 Amount % 2000 1999 Amount %
---- ---- ------ -- ---- ---- ------ --
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REVENUES AND SALES:
Wireless $ 837,065 $ 736,170 $ 100,895 14 $ 1,573,504 $ 1,402,237 $ 171,267 12
Wireline 438,731 416,142 22,589 5 875,362 824,136 51,226 6
Emerging businesses 96,517 66,033 30,484 46 185,484 125,533 59,951 48
----------- ----------- --------- ----------- ----------- ---------
Total communications 1,372,313 1,218,345 153,968 13 2,634,350 2,351,906 282,444 12
Information services 318,690 313,850 4,840 2 629,520 619,248 10,272 2
Other operations 168,311 143,997 24,314 17 306,342 261,061 45,281 17
----------- ----------- --------- ----------- ----------- ---------
Total business segments 1,859,314 1,676,192 183,122 11 3,570,212 3,232,215 337,997 10
Less: intercompany eliminations 84,292 45,549 38,743 85 150,227 86,280 63,947 74
----------- ----------- --------- ----------- ----------- ---------
Total revenues and sales $ 1,775,022 $ 1,630,643 $ 144,379 9 $ 3,419,985 $ 3,145,935 $ 274,050 9
=========== =========== ========= =========== =========== =========
EBITDA:
Wireless $ 348,080 $ 330,983 $ 17,097 5 $ 660,969 $ 614,671 $ 46,298 8
Wireline 252,804 227,841 24,963 11 507,656 455,015 52,641 12
Emerging businesses (4,206) (2,472) (1,734) (70) (9,099) (7,263) (1,836) 25)
--------- --------- -------- ----------- ----------- ---------
Total communications 596,678 556,352 40,326 7 1,159,526 1,062,423 97,103 9
Information services 82,894 78,959 3,935 5 162,914 153,522 9,392 6
Other operations 4,975 6,332 (1,357) (21) 9,667 10,847 (1,180) (11)
--------- --------- -------- ----------- ----------- ---------
Total business segments 684,547 641,643 42,904 7 1,332,107 1,226,792 105,315 9
Corporate expenses 5,835 6,398 (563) (9) 10,357 8,666 1,691 20
--------- --------- -------- ----------- ----------- ---------
Total EBITDA $ 678,712 $ 635,245 $ 43,467 7 $ 1,321,750 $ 1,218,126 $ 103,624 9
========= ========= ======== =========== =========== =========
OPERATING INCOME:
Wireless $ 258,562 $ 243,815 $ 14,747 6 $ 479,251 $ 440,531 $ 38,720 9
Wireline 167,632 148,348 19,284 13 338,256 295,715 42,541 14
Emerging businesses (12,400) (8,893) (3,507) (39) (25,823) (18,539) (7,284) (39)
--------- --------- -------- --------- --------- --------
Total communications 413,794 383,270 30,524 8 791,684 717,707 73,977 10
Information services 44,058 43,286 772 2 86,131 83,738 2,393 3
Other operations 4,578 6,064 (1,486) (25) 8,953 10,314 (1,361) (13)
--------- --------- -------- --------- --------- --------
Total business segments 462,430 432,620 29,810 7 886,768 811,759 75,009 9
Corporate expenses 9,937 9,851 86 1 18,694 15,588 3,106 20
--------- --------- -------- --------- --------- --------
Total operating income 452,493 422,769 29,724 7 868,074 796,171 71,903 9
Other income, net 18,747 9,291 9,456 102 44,389 22,825 21,564 94
Interest expense (76,708) (69,878) 6,830 10 (144,937) (138,616) 6,321 5
--------- --------- -------- --------- --------- --------
Income before income taxes 394,532 362,182 32,350 9 767,526 680,380 87,146 13
Income taxes 162,066 148,913 13,153 9 313,139 280,567 32,572 12
--------- --------- -------- --------- --------- --------
Net income 232,466 213,269 19,197 9 454,387 399,813 54,574 14
Preferred dividends 40 227 (187) (82) 81 459 (378) (82)
--------- --------- -------- --------- --------- --------
Net income applicable to
common shares $ 232,426 $ 213,042 $ 19,384 9 $ 454,306 $ 399,354 $ 54,952 14
========= ========= ======== ========= ========= ========
EARNINGS PER SHARE:
Basic $.74 $.68 $.06 9 $1.44 $1.28 $.16 13
Diluted $.73 $.67 $.06 9 $1.43 $1.26 $.17 13
</TABLE>
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<TABLE>
<CAPTION>
ALLTEL CORPORATION
CONSOLIDATED HIGHLIGHTS - Continued
(Dollars in thousands, except per share amounts)
TWELVE MONTHS ENDED JUNE 30,
Increase
(Decrease)
FROM CURRENT BUSINESSES 2000 1999 Amount %
---- ---- ----- --
<S> <C> <C> <C> <C>
REVENUES AND SALES:
Wireless $ 3,073,434 $ 2,715,043 $ 358,391 13
Wireline 1,728,683 1,585,727 142,956 9
Emerging businesses 340,385 221,791 118,594 53
----------- ----------- ---------
Total communications 5,142,502 4,522,561 619,941 14
Information services 1,255,775 1,216,964 38,811 3
Other operations 625,099 615,849 9,250 2
----------- ----------- ---------
Total business segments 7,023,376 6,355,374 668,002 11
Less: intercompany eliminations 287,955 188,990 98,965 52
----------- ----------- ---------
Total revenues and sales $ 6,735,421 $ 6,166,384 $ 569,037 9
=========== =========== =========
EBITDA:
Wireless $ 1,284,078 $ 1,142,744 $ 141,334 12
Wireline 995,440 871,314 124,126 14
Emerging businesses (21,679) (22,102) 423 2
----------- ----------- ---------
Total communications 2,257,839 1,991,956 265,883 13
Information services 328,826 310,347 18,479 6
Other operations 21,590 25,301 (3,711) (15)
----------- ----------- ---------
Total business segments 2,608,255 2,327,604 280,651 12
Corporate expenses 26,832 19,727 7,105 36
----------- ----------- ---------
Total EBITDA $ 2,581,423 $ 2,307,877 $ 273,546 12
=========== =========== =========
OPERATING INCOME:
Wireless $ 925,198 $ 805,142 $ 120,056 15
Wireline 661,605 565,000 96,605 17
Emerging businesses (54,525) (41,569) (12,956) (31)
--------- --------- ---------
Total communications 1,532,278 1,328,573 203,705 15
Information services 177,709 170,197 7,512 4
Other operations 20,200 23,973 (3,773) (16)
--------- --------- ---------
Total business segments 1,730,187 1,522,743 207,444 14
Corporate expenses 42,657 32,474 10,183 31
--------- --------- ---------
Total operating income 1,687,530 1,490,269 197,261 13
Other income, net 64,413 75,241 (10,828) (14)
Interest expense (286,496) (276,824) 9,672 3
--------- --------- ---------
Income before income taxes 1,465,447 1,288,686 176,761 14
Income taxes 588,380 536,829 51,551 10
--------- --------- ---------
Net income 877,067 751,857 125,210 17
Preferred dividends 511 926 (415) (45)
--------- --------- ---------
Net income applicable to
common shares $ 876,556 $ 750,931 $ 125,625 17
========= ========= =========
EARNINGS PER SHARE:
Basic $2.79 $2.43 $.36 15
Diluted $2.76 $2.40 $.36 15
<FN>
Current businesses excludes merger and integration expenses and other charges,
provision to reduce carrying value of certain assets, and gain on disposal of
assets. Emerging businesses includes the long-distance, local competitive
access, Internet access, network management and PCS operations.
</FN>
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ALLTEL CORPORATION
HIGHLIGHTS-Page 2
(Dollars in thousands, except per share amounts)
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30, TWELVE MONTHS ENDED JUNE 30,
-------------------------- ------------------------ ---------------------------
2000 1999 2000 1999 2000 1999
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
AS REPORTED:
Revenues and sales $ 1,775,022 $ 1,630,643 $ 3,419,985 $ 3,145,935 $ 6,735,421 $ 6,166,384
Costs and expenses:
Operations 1,322,529 1,207,874 2,551,911 2,349,764 5,047,891 4,676,115
Merger and integration expenses and other
charges and provision to reduce carrying
value of certain assets 6,770 - 16,906 - 107,426 307,000
----------- ----------- ----------- ----------- ----------- ----------
Total costs and expenses 1,329,299 1,207,874 2,568,817 2,349,764 5,155,317 4,983,115
----------- ----------- ----------- ----------- ----------- ----------
Operating income 445,723 422,769 851,168 796,171 1,580,104 1,183,269
Other income, net 18,747 9,291 44,389 22,825 64,413 75,241
Interest expense (76,708) (69,878) (144,937) (138,616) (286,496) (276,824)
Gain on disposal of assets and other 1,338,085 - 1,338,085 - 1,381,156 80,901
----------- ----------- ----------- ----------- ----------- ----------
Income before income taxes 1,725,847 362,182 2,088,705 680,380 2,739,177 1,062,587
Income taxes 722,327 148,913 869,143 280,567 1,135,794 496,097
----------- ----------- ----------- ----------- ----------- ----------
Net income 1,003,520 213,269 1,219,562 399,813 1,603,383 566,490
Preferred dividends 40 227 81 459 511 926
----------- --------- ----------- ----------- ----------- -----------
Net income applicable to common shares $ 1,003,480 $ 213,042 $ 1,219,481 $ 399,354 $ 1,602,872 $ 565,564
=========== =========== =========== =========== =========== =======
EARNINGS PER SHARE:
Basic $3.18 $.68 $3.87 $1.28 $5.10 $1.83
Diluted $3.15 $.67 $3.84 $1.26 $5.04 $1.81
</TABLE>
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<CAPTION>
ALLTEL CORPORATION
SUPPLEMENTAL OPERATING INFORMATION FROM CURRENT BUSINESSES
(Dollars in thousands, except per customer and per share amounts)
THREE MONTHS ENDED SIX MONTHS ENDED TWELVE MONTHS ENDED
JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2000 1999 2000 1999 2000 1999
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Wireless:
Controlled POPs 47,785,794 39,302,695
Customers 5,893,445 4,767,453
Penetration rate 12.3% 12.1%
Gross customer additions:
Internal 462,604 369,734 944,896 785,142 1,909,060 1,653,417
Acquired, net of divested 689,055 54,488 689,055 143,328 689,055 169,466
Total 1,151,659 424,222 1,633,951 928,470 2,598,115 1,822,883
Net customer additions:
Internal 80,933 73,794 185,776 172,076 436,937 445,471
Acquired, net of divested 689,055 54,488 689,055 143,328 689,055 169,466
Total 769,988 128,282 874,831 315,404 1,125,992 614,937
Average customers 5,370,445 4,721,074 5,232,190 4,717,654 5,051,470 4,509,368
Churn 2.19% 1.97% 2.27% 2.06% 2.28% 2.14%
Average revenue per customer per month $52.25 $52.14 $50.41 $49.67 $50.96 $50.25
Cost to acquire a new customer $318 $344 $301 $322 $300 $293
Operating margin 30.9% 33.1% 30.5% 31.4% 30.1% 29.7%
Cash flow (EBITDA) margin 41.6% 45.0% 42.0% 43.8% 41.8% 42.1%
Wireline:
Customers 2,519,952 2,362,502
Operating margin 38.2% 35.6% 38.6% 35.9% 38.3% 35.6%
Cash flow (EBITDA) margin 57.6% 54.8% 58.0% 55.2% 57.6% 54.9%
Emerging businesses:
Long-distance customers 1,040,740 726,348
Cash flow (EBITDA) margin (4.4%) (3.7%) (4.9%) (5.8%) (6.4%) (10.0%)
Information services:
Operating margin 13.8% 13.8% 13.7% 13.5% 14.2% 14.0%
Cash flow (EBITDA) margin 26.0% 25.2% 25.9% 24.8% 26.2% 25.5%
Consolidated:
Cash flow (EBITDA) margin 38.2% 39.0% 38.6% 38.7% 38.3% 37.4%
Weighted average common shares:
Basic 315,413,000 312,481,000 315,194,000 312,040,000 314,419,000 309,345,000
Fully diluted 318,248,000 316,497,000 317,843,000 316,042,000 317,955,000 312,863,000
Capital expenditures $249,325 $231,966 $407,555 $434,657 $979,373 $1,028,861
Annual dividend per common share $1.28 $1.22
Total assets $12,266,447 $10,775,393
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<CAPTION>
ALLTEL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
ASSETS
JUNE 30, DEC. 31, JUNE 30,
2000 1999 1999
-------------- ------------- -------------
<S>
CURRENT ASSETS: <C> <C> <C>
Cash and short-term investments $ 5,408 $ 17,595 $ $ 50,253
Accounts receivable (less allowance for
doubtful accounts of $42,538, $35,017
and $30,207 respectively) 1,045,822 922,159 906,588
Materials and supplies 12,869 15,130 22,022
Inventories 171,023 148,292 115,104
Prepaid expenses and other 295,475 64,003 63,737
------------ ------------ ------------
Total current assets 1,530,597 1,167,179 1,157,704
------------ ------------ ------------
Investments 1,208,508 1,594,029 1,847,223
Goodwill and other intangibles 3,077,196 1,997,315 1,919,164
PROPERTY, PLANT AND EQUIPMENT:
Wireline 5,406,241 5,194,546 5,002,921
Wireless 4,274,664 3,545,778 3,251,402
Information services 875,364 775,532 739,850
Other 236,373 241,297 178,700
Under construction 471,534 533,854 613,063
------------ ------------ ------------
Total property, plant and equipment 11,264,176 10,291,007 9,785,936
Less accumulated depreciation 5,135,040 4,556,462 4,253,626
------------ ------------ ------------
Net property, plant and equipment 6,129,136 5,734,545 5,532,310
------------ ------------ ------------
Other assets 321,010 281,135 318,992
------------ ------------ ------------
TOTAL ASSETS $ 12,266,447 $ 10,774,203 $ 10,775,393
============ ============ ============
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<CAPTION>
ALLTEL CORPORATION
CONSOLIDATED BALANCE SHEETS - Continued
(Dollars in thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
JUNE 30, DEC. 31, JUNE 30,
2000 1999 1999
------------- ------------- -------------
<S> <C> <C> <C>
CURRENT LIABILITIES:
Current maturities of long-term debt $ 64,012 $ 71,222 $ 80,125
Accounts and notes payable 419,196 508,045 465,848
Advance payments and customer deposits 130,215 117,915 127,027
Accrued taxes 242,428 88,723 115,301
Accrued dividends 101,789 101,607 93,129
Other current liabilities 265,973 306,455 286,588
------------ ------------ ------------
Total current liabilities 1,223,613 1,193,967 1,168,018
------------ ------------ ------------
Long-term debt 4,441,106 3,750,413 3,856,207
Deferred income taxes 818,336 1,056,921 1,094,759
Other liabilities 528,137 567,165 588,773
SHAREHOLDERS' EQUITY:
Preferred stock 512 562 9,105
Common stock 315,519 314,258 312,630
Additional capital 1,080,353 973,356 960,792
Unrealized holding gain on investments 521,027 594,130 647,895
Retained earnings 3,337,844 2,323,431 2,137,214
------------ ------------ ------------
Total shareholders' equity 5,255,255 4,205,737 4,067,636
------------ ------------ ------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 12,266,447 $ 10,774,203 $ 10,775,393
============ ============ ============
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