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EXHIBIT 99.1
CT COMMUNICATIONS, INC. AND SUBSIDIARIES
Consolidated Statements of Income
Years ended December 31, 1998, 1997, and 1996
1998 1997 1996
---- ---- ----
Operating revenues $ 91,725,394 $ 78,483,514 $ 67,054,006
Operating expenses 70,272,414 58,390,372 51,349,967
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Operating income 21,452,980 20,093,142 15,704,039
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Other income (expenses):
Equity in income of affiliates, net 431,088 130,637 1,801,952
Interest, dividend income and gain on
sale of investments 1,916,446 261,459 244,213
Other expenses, principally interest (1,491,635) (985,275) (705,112)
------------ ------------ ------------
Total other income (expense) 855,899 (593,179) 1,341,053
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Income before income taxes and
extraordinary item 22,308,879 19,499,963 17,045,092
Income taxes 8,926,469 7,898,159 6,583,671
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Net income before extraordinary item 13,382,410 11,601,804 10,461,421
Extraordinary item - discontinuance of SFAS 71,
net of income taxes of $1,493,312 -- 2,239,045 --
------------ ------------ ------------
Net income after extraordinary item 13,382,410 13,840,849 10,461,421
Dividends on preferred stock 28,457 73,073 92,535
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Earnings for common stock $ 13,353,953 $ 13,767,776 $ 10,368,886
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Basics earnings per common share:
Earnings before extraordinary item $ 1.45 $ 1.27 $ 1.15
Extraordinary item -- 0.25 --
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Earnings per common share $ 1.45 $ 1.52 $ 1.15
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Diluted earnings per common share:
Earnings before extraordinary item $ 1.44 $ 1.26 $ 1.14
Extraordinary item -- 0.25 --
------------ ------------ ------------
Earnings per common share $ 1.44 $ 1.51 $ 1.14
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Basic weighted average shares outstanding 9,227,016 9,076,211 9,051,731
============ ============ ============
Diluted weighted average shares outstanding 9,276,504 9,111,439 9,078,385
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See accompanying notes to consolidated financial statements.
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(1)(n) RECENT ACCOUNTING PRONOUNCEMENTS
On January 1, 1998, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 130 "Reporting Comprehensive Income."
SFAS No. 130 requires companies to display, with the same prominence as
other financial statements, the components of comprehensive income.
Items considered to be other comprehensive income include adjustments
made for unrealized holding gains and losses on available-for-sale
securities.
During 1998, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 131 "Disclosures about Segments of an Enterprise
and Related Information." SFAS No. 131 establishes standards for the
way public business enterprises are to report information about
operating segments in annual financial statements and requires those
enterprises to report selected financial information about operating
segments in interim financial reports issued to shareholders.
During 1998, the Company adopted Statement of Financial Accounting
Standards (SFAS) No. 132, "Employers' Disclosures About Pension and
Other Postretirement Benefits" and has revised its disclosures for its
pension and postretirement plans accordingly.
(15) SEGMENT INFORMATION
Effective December 31, 1998, the Company adopted FAS 131, "Disclosures
about Segments of an Enterprise and Related Information." In early 1999
the Company reorganized internal reporting to better manage business
segments. As a result, the Company has four reportable segments, the
incumbent local exchange carrier (ILEC), the competitive local exchange
carrier and long distance services (CLEC/LD), Internet and data
services (ISP), and the digital wireless group (DCS). Results for 1998
and prior years have been reclassified to be comparative to 1999
presentation. Accounting policies of the segments are the same as those
described in the summary of significant accounting policies. The
Company evaluates performance based on operating profit before other
income (expenses) and income taxes. Intersegment sales are accounted
for as if the transactions were to third parties.
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December 31, 1998:
ILEC CLEC/LD ISP DCS OTHER TOTAL
External revenues $ 70,646,748 $13,883,555 $3,369,305 $ 3,150,786 $ 675,000 $ 91,725,394
Intersegment revenues 5,017,641 -- -- -- -- 5,017,641
Depreciation and amortization 11,530,611 643,970 553,765 55,196 57,019 12,840,561
Segment operating profit 25,534,663 (2,354,985) (388,906) (1,250,329) (87,463) 21,452,980
Segment assets 127,179,588 2,644,738 6,735,650 (2,086,098) 49,160,480 183,634,358
December 31, 1997:
CTC CLEC/LD ISP DCS OTHER TOTAL
External revenues $ 64,417,269 $11,881,063 $ 580,217 $ 1,604,965 $ -- $ 78,483,514
Intersegment revenues 3,629,556 -- -- -- -- 3,629,556
Depreciation and amortization 9,130,090 411,732 32,088 38,175 -- 9,612,085
Segment operating profit 22,583,696 957,312 (93,090) (2,220,351) (1,134,425) 20,093,142
Segment assets 107,059,374 4,331,091 206,629 163,262 35,579,073 147,339,429
December 31, 1996:
CTC CLEC/LD ISP DCS OTHER TOTAL
External revenues $ 57,981,521 $ 8,584,187 $ 192,056 $ 296,242 $ -- $ 67,054,006
Intersegment revenues 2,387,185 -- -- -- -- 2,387,185
Depreciation and amortization 10,050,369 47,776 -- 6,657 -- 10,104,802
Segment operating profit 17,679,860 (963,269) 96,028 (960,981) (147,599) 15,704,039
Segment assets 90,752,228 4,172,155 103,315 617,947 19,418,318 115,063,963