Exhibit 99.1
FOR IMMEDIATE RELEASE
Contact: Alice Catalano
(203)614-5185
acatalan@czn.com
CITIZENS UTILITIES ANNOUNCES 1997 FOURTH-QUARTER
AND YEAR-END RESULTS
Stamford, Connecticut, March 11, 1998 -Citizens Utilities' chief financial
officer, Robert J. DeSantis, announced today 1997 fourth quarter and year ended
December 31, 1997 financial results.
For the fourth quarter, revenues grew 12% to $379 million over the $339
million reported for the corresponding 1996 quarter. Net income of $80 million
increased 67% compared to net income of $48 million for the fourth quarter of
1996. Earnings per share of 32 cents for the fourth quarter of 1997 increased
69% from 19 cents for the fourth quarter of 1996 . Results for the fourth
quarter 1997 included a one time after-tax gain of $51 million from the sale of
a minority interest in the company's competitive local exchange subsidiary,
Electric Lightwave, Inc.
Full year 1997 revenues grew 8% to $1.4 billion from $1.3 billion in
1996. 1997 reported net income was $10 million and earnings per share was 4
cents, as compared to net income of $179 million and earnings per share of 70
cents in 1996. 1997 results were affected by two special items: a $135 million
after-tax charge primarily related to the restructuring of the company's
communications business and the $51 million after-tax gain from the sale of
subsidiary stock. Absent these special items, 1997 earnings and earnings per
share were $94 million and 37 cents, respectively. 1997 earnings and earnings
per share also reflect the absorption of $34 million, or 9 cents per share, for
Electric Lightwave's operating losses.
Mr. DeSantis stated that, "Citizens Communications revenues increased
9% to $817 million in 1997 while annual revenue per access line grew 4% to $935,
well above the industry average . All three major revenue components-- network
access services, local network services and long distance services--showed
positive gains. Annual access line growth of 5% continues to exceed the industry
average while in territory toll minutes of use grew 6% and Citizens Long
Distance toll minutes of use increased 120% over 1996."
"Citizens Public Services 1997 revenues were $540 million, up 4% over
1996. 1997 operating income of $104 million increased 17% over the prior year.
Citizens Public Services productivity measurements continue to top the industry
with 475 customers per employee and $171,300 of net revenue per employee," Mr.
DeSantis noted.
Commenting on Electric Lightwave Mr. DeSantis stated, "the November
1997 initial public offering of Electric Lightwave common securities established
a public market enterprise value for the subsidiary of approximately $1 billion.
Citizens' 83% interest in this enterprise translates into approximately $830
million of value, or over $3.25 per share, for Citizens' shareholders. This
value creation validates the $130 million of Electric Lightwave's aggregate
operating losses which have impacted Citizens' earnings over the past several
years. The initial public offering also provided funding for Electric
Lightwave's expansion at the lowest cost of capital to Citizens shareholders and
bondholders."
Citizens Utilities (NYSE: CZN, CZNPr) provides Communications Services
and Public Services including, natural gas distribution, electric distribution,
water distribution and wastewater treatment services to approximately 1.8
million customers in 20 states. Citizens owns a controlling interest in Electric
Lightwave, Inc.,(NASDAQ:ELIX), a leading full-service, facilities-based
integrated communications services provider and has investments in Centennial
Cellular Corp. (NASDAQ:CYCL), a cellular telephone company, and Hungarian
Telephone and Cable Corp. (ASE: HTC).
Citizens Utilities Company and Subsidiaries
Consolidated Financial Data
For the year ended
December 31,
--------------------------------
%
1997 1996 Change
(Dollars in thousands, except per share data) ---------------------------------------------
Income Statement Data
Revenues $ 1,414,386 $ 1,306,517 8%
Cost of services 333,561 285,749 17%
Sales and marketing expenses 46,073 42,823 8%
Network expenses 98,935 64,645 53%
Depreciation 235,812 193,733 22%
Other operating expenses 592,008 488,526 21%
Operating income 206,932 295,686 -30%
Charges to earnings (1) 191,090 - n/a
Operating income including charges to earnings 15,842 295,686 n/a
Non operating gain on sale of subsidiary stock (1) 78,734 - n/a
Investment and other income 42,706 66,455 -36%
Interest expense 107,585 92,695 16%
Charges to earnings (1) 6,230 - n/a
Income taxes 7,157 84,937 -92%
Convertible preferred dividends 6,210 5,849 6%
Net income 10,100 178,660 -94%
Net income excluding special items (1) 94,087 178,660 -47%
Per-Share Data (2)
Basic net income per share of common stock $ .04 $ .70 -94%
Basic net income per share of common stock excluding special items $ .37 $ .70 -47%
Basic net income per share of common stock excluding special items and ELI $ .46 $ .77 -40%
Weighted average shares 252,563 253,592 0%
(1) Special items impacting the 1997 income statement include charges to
earnings of $197.3 million ($135.2 million after tax) and a non operating
gain on sale of subsidiary stock of $78.7 million ($51.2 million after
tax).
(2) Adjusted for subsequent stock dividends and stock splits and used in the
calculation of all per share data. No adjustment has been made for the
Company's .75% first quarter 1998 stock dividend because the effect is
immaterial. (3) ELI is Electric Lightwave, Inc., the Company's
competitive local exchange subsidiary.