CONTACT: David Frail (212) 395-0500
FOR IMMEDIATE RELEASE
ACHIEVES RECORD EARNINGS GROWTH
SECOND CONSECUTIVE YEAR
- First Back-to-Back Years With
Double-Digit EPS Growth -
- 1996 HIGHLIGHTS*
- Net income up 12.7
- Earnings per share
up 10.1 percent to $3.60.
- Total revenues,
including NYNEX's share of unconsolidated ventures, grow 5.8 percent.
- Access line demand
grows at record pace -- 3.5 percent in the Northeast and 4.7 percent NYNEX-wide;
cellular partnerships add more than 1 million customers; strong growth
continues in cable customers and information service users.
- Strong sales of
competitive services, including private line, Centrex and calling plans;
access usage increases 10.2 percent.
- Operating margin
expands 0.9 percentage points.
- Aggressive initiatives
put service back on track.
(*) Financial results
discussed in this release are adjusted for the effects of the corporation's
enhanced pension offer and for various special gains and charges. Year-to-year
comparisons reflect adjustments due to the reporting of NYNEX's participation
in the NYNEX-Bell Atlantic cellular partnership on an equity basis begun
in the third quarter of 1995.
NEW YORK, N.Y., January 21, 1997 -- NYNEX
Corporation (NYSE:NYN) today announced its second consecutive year of double-digit
earnings growth, with net income for 1996 increasing 12.7 percent to $1.6
billion. Earnings per share for the year of $3.60 were up 10.1 percent compared
to $3.27 per share in 1995.
revenues increased 4.1 percent to $13.5 billion, as access lines grew at
the strongest pace in the company's history and other business volumes increased
at unprecedented rates. In addition, Bell Atlantic NYNEX Mobile (BANM) revenues,
which are not consolidated, grew 29.2 percent. Total corporate revenues
(which include NYNEX's share of revenues from BANM and other unconsolidated
businesses) grew 5.8 percent for the year.
Operating margin for
the year expanded 0.9 percentage points to 22.3 percent, and operating income
grew to $3.0 billion, up 8.4 percent over 1995.
"NYNEX had another outstanding year,
with our second consecutive double-digit increase in earnings per share
-- a first in our corporation's 12-year history," said NYNEX Chairman
and Chief Executive Officer Ivan Seidenberg.
"1996 was an historic year for our
progress and our growth. The framework of the local exchange business was
changed forever by the Telecommunications Act, which opened long distance
and cable television markets to us as well. To take full advantage of these
opportunities, we announced one of the largest mergers in U.S. history.
"Throughout these extraordinary changes,
we drove top-line growth, met our goals for productivity improvement and
sustained our double-digit performance of the previous year. At the same
time, by taking aggressive actions, we finished 1996 with significantly
improved service results and positioned ourselves to resume the marketing
of value-added services and accelerate revenue growth per access line.
"We also made
solid progress in new business ventures. BANM had its second year of million-plus
customer growth, and PrimeCo PCS got off to a rapid start. COLOR="#000000">And we will soon begin the regulatory process for approval
to offer long distance service in New York.
"Our major overseas
investments all passed major milestones. With TelecomAsia and BayanTel completing
their initial network projects and Excelcomindo launching cellular services,
all three are now aggressively adding customers. FLAG completed nearly 40
percent of its undersea cable project. In the UK, NYNEX CableComms turned
cash-flow positive in the second half of the year, and we reached agreement
with Cable & Wireless and Bell Canada International to create what will
be the UK's first provider of fully integrated communications, entertainment
and information services, Cable & Wireless Communications.
"We made excellent
progress in 1996 toward meeting all of our long-term targets, and we're
looking forward to completing reviews and closing our merger with Bell Atlantic
in the first quarter. NYNEX has generated real momentum, and by bringing
that momentum into the new Bell Atlantic we will accelerate the delivery
of value to our customers, our shareholders, and our employees."
Fourth quarter net income increased 10.0
percent to $416.5 million, compared to $378.7 million in the fourth quarter
of 1995. The quarter was NYNEX's seventh consecutive quarter of double-digit
net income growth. Earnings per share were $0.95, up 8.0 percent over the
fourth quarter of 1995. Consolidated revenue growth of 0.9 percent was affected
by the one-time effects of a change in accounting for directory revenues,
the assessment of prior-period service rebates, and the decision not to
stimulate certain markets while service improvement efforts were under way.
Other Results Of Operations
annual revenue growth of 3.1 percent over 1995 was driven by strong sales
of business and value-added services and increasing network use. Private
line revenues grew 11.3 percent for the year, and have now increased for
ten consecutive quarters in one of telecommunications' most competitive
market segments. Value-added service revenues were up 31.2 percent over
1995. Total access minutes of use grew 10.2 percent, and NYNEX sold more
than two and a half million new calling plans in New York and Massachusetts.
- Worldwide, NYNEX
access lines (including NYNEX's share of its unconsolidated ventures) grew
4.7 percent over 1995. In the northeastern U.S., NYNEX enjoyed its second
consecutive year of record-breaking growth, as the number of lines in service
increased 3.5 percent to 17.7 million. At NYNEX's overseas operations in
the United Kingdom, Thailand and the Philippines, access lines grew by
more than 62 percent.
- Worldwide cellular
operations sustained their rapid growth. BANM added more than a million
customers in 1996 and ended the year with more than 4.4 million, a 31.4
percent increase over 1995. In Greece and Indonesia, NYNEX'S cellular partnerships
nearly doubled the number of customers.
- Cable television
subscriber growth at NYNEX CableComms was up more than 36 percent over
1995, as new marketing programs increased the number of customers to 268,500
and drove penetration above 20 percent for the first time.
- In information services,
NYNEX Information Resources Company (NIRC) increased the number of Yellow
Pages advertisers 2.8 percent over 1995. By year's end, sm,
NIRC's leading on-line shopping directory, had quadrupled the number of
visitors to 800,000 per month and doubled the number of advertisers to
8,000 since its introduction in March.
* * *
NYNEX is a global communications and media
corporation that provides a full range of services in the northeastern United
States and high-growth markets around the world, including the United Kingdom,
Thailand, Gibraltar, Greece, Indonesia, the Philippines, Poland, Slovakia
and the Czech Republic. The corporation is a leader in
telecommunications, wireless communications, directory publishing and video
entertainment and information services.
NYNEX news releases
are now available on the Internet at http://www.nynex.com. You can also
receive fax copies of recent NYNEX news releases, free of charge, 24 hours
a day. Call 1-800-331-1214. An automated system will provide you with instructions.
millions, except EPS
3 Months Ended 3 Months
12/31/96 12/31/95 12/31/96
$ 3,330.3 $ 3,304.3 $ 3,330.3 $ 3,300.8
2,615.5 2,809.7 2,556.6
(operating cash flow)* 1,322.7
1,125.8 1,381.6 1,352.2
income plus depreciation and amortization.
(a) Results for both
quarters adjusted for the effects of the corporation's enhanced pension
offer, which was initiated in 1994 as part of a force reduction plan. Fourth
quarter 1996 charges, for approximately 900 employees who accepted the pension
offer, totaled $36.8 million after taxes, or $0.09 per share. Charges for
the fourth quarter of 1995 were $143.1 million after taxes, or $0.33 per
share, for approximately 1,800 employees who accepted the pension offer.
millions, except 12 Months Ended
12 Months Ended
and percentages) 12/31/96
12/31/95 12/31/96 12/31/95
$13,406.9 $13,522.8 $12,993.1
10,840.9 11,314.7 10,509.1
2,612.9 2,092.2 3,013.7
(operating cash flow)* 5,112.2 4,659.0
and cumulative effect
1,477.0 (1,849.9) 1,574.5
$3.08 $ 2.50
avg. shares outstanding 436.9 426.5
refers to operating income plus depreciation and amortization.
(a) 1996 results have been adjusted for
the effects of the corporation's enhanced pension
offer, which was initiated in 1994 as part of a force reduction plan. The
total number of employees leaving NYNEX under the terms of the offer through
1998 is expected to be in the range of 19,000 to 20,000. After-tax charges
in the range of $1.4 billion are to be recorded as employees accept the
offer. Pension charges for 1996 totaled $147.3 million after taxes,
or $0.34 per share, for approximately 3,000 employees who accepted the pension
offer. 1996 results have also been adjusted for a
gain from the cumulative effect of a change in accounting for directory
advertising revenues and expenses to reflect revenues and expenses upon
publication rather than over the life of the directory; a change
in presentation of certain taxes other than income; special
charges to meet various legal, regulatory and other obligations and contingencies;
and an after-tax gain of $45.8 million, or $0.11 per share, from the sale
of NYNEX's interest in Vanstar Corporation. The net effect of these items
was a gain of $49.8 million, or $0.12 per share, which when combined
with the effects of the enhanced pension offer result in a net charge of
$97.5 million or $0.22 per share.
1995 results have been adjusted for pension
charges totaling $326.8 million after taxes, or $0.77 per share, for approximately
4,700 employees who accepted the pension offer. 1995 results have also been
adjusted for an extraordinary charge resulting from discontinuance of accounting
under SFAS 71; net gains resulting from the sale of certain NYNEX Mobile
Communications assets and actuarial changes associated with the NYNEX-Bell
Atlantic cellular partnership; a gain related to an initial public offering
of equity in NYNEX CableComms; a change in presentation of certain taxes
other than income, and special charges to meet various tax, benefit and
legal obligations and contingencies. The net effect of these items was a
charge of $2.9 billion, or $6.84 per share, which when combined with the
effects of the enhanced pension offer result in a net charge of $3.2 billion,
or $7.61 per share.
In addition, since NYNEX's participation
in the NYNEX-Bell Atlantic cellular partnership is reported on an equity
basis, 1995 revenues and expenses have been adjusted to permit comparison
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