Exhibit 99.2
Contacts:
Financial Community: Media:
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Alan H. Oshiki, Assistant Vice President Brigid M. Smith,
President and Assistant Treasurer Assistant Vice President
(203) 614-5629 Corporate Communications
aoshiki@czn.com (203) 614-5042
bsmith@czn.com
CITIZENS UTILITIES DESCRIBES STRUCTURE AND STRATEGY OF NEW
TELECOMMUNICATIONS COMPANY
Stamford, Connecticut, August 13, 1998 - Citizens Utilities (NYSE: CZN, CZNPr)
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President and Chief Operating Officer Daryl A. Ferguson made the following
statement today during a conference call with the financial community. The
statement pertained to the new telecommunications company to be created as a
result of the separation plan announced May 18, its structure and strategy, and
the impact of these on Electric Lightwave, Inc., (NASDAQ: ELIX) in which
Citizens has an 83% ownership stake.
"In May, during its teleconference with investors the day after the separation
announcement, Citizens indicated that - in anticipation of the formation of the
new telecommunications company -- it was studying the possible integration of
Electric Lightwave with its incumbent local exchange carrier (ILEC) businesses.
I am here today to report the results of that study."
"Citizens' telecommunications businesses, which include over 900,000 rural
access lines and an 83% interest in Electric Lightwave, will reside under a
holding company as yet unnamed. For planning purposes, we refer to this holding
company as "NewCo.""
"While there are synergistic opportunities in purchasing, engineering and
financing, we have determined that the best strategy is to operate Electric
Lightwave and the ILEC businesses as separate and independent entities."
"NewCo's strategy will therefore be two-pronged: to grow both its ILEC and
competitive local exchange carrier (CLEC) businesses to their fullest potential.
The logic behind this strategy is very compelling."
"The existing ILEC businesses have the critical mass -- and will have the
financial resources -- to become one of the nation's largest rural and suburban
ILECs through aggressive internal and external growth. NewCo's ILEC businesses
will serve primarily residential and small business customers."
"Electric Lightwave will continue to expand its regional network and market its
data services nationally to medium and large businesses in urban areas. At this
early stage in the company's history, it is our view that there is a great deal
of value yet to be gained by further developing Electric Lightwave."
"At this time we see the ILEC businesses and Electric Lightwave as separate and
distinct entities with different cultures, business strategies, markets and
opportunities."
"As we have stated before, we believe that the separation will be a positive for
Electric Lightwave because it transfers ownership from a diversified, heavily
regulated utility company to a new company focused solely on telecommunications.
The separation distances Electric Lightwave from the restrictive strategies
historically imposed upon it."
"In fact - far from limiting Electric Lightwave in any way - the separation
actually enlarges its range of value-enhancing opportunities. The company will
be able to fully pursue its growth strategies and is in position to eventually
participate in the consolidating CLEC industry."
"Electric Lightwave is clearly undervalued by the market. For example, on an
enterprise value to revenue basis, the CLEC average is 5.6 times; the company is
trading at 3.3 times. On enterprise value to property, plant and equipment
(PP&E), the CLEC average is 6.9 times and the company is trading at 1.4 times.
If Electric Lightwave was traded at CLEC averages, it would be trading at $28 or
more, not $8.75."
"Electric Lightwave has all of the same options for achieving value as every
other developing CLEC. It is our view that there is no strategic limitation
whatsoever that should prevent the company from achieving a value comparable to
the best of its peers."
Citizens Utilities provides Telecommunications Services and Public Services
including natural gas distribution, electric distribution, water distribution
and wastewater treatment services to approximately 1.8 million customers in 21
states. Citizens owns 83% of Electric Lightwave, Inc., a leading full-service,
facilities-based integrated communications services provider, and has a
significant investment in Centennial Cellular Corp. (NASDAQ:CYCL), a cellular
telephone company. 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 news release 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, changes in the local
and overall economy, 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, 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. 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 10K and 10Q. The company has no obligation to update or revise
these forward-looking statements to reflect the occurrence of future events or
circumstances.