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- 1996 HIGHLIGHTS* -
Net income up 12.7 percent.
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.
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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.
Consolidated annual 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. 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
Telecommunications 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.
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- NYNEX CORPORATION
- Financial Results
- (Unaudited)
- FOURTH QUARTER 1996
___________________________________________________________________
- Reported Adjusted(a)
- (in millions, except EPS 3 Months Ended 3 Months Ended
- and percentages) 12/31/96 12/31/95 12/31/96 2/31/95
- ------ ------ ------ ------
- Operating revenues $ 3,330.3 $ 3,304.3 $ 3,330.3 $ 3,300.8
- Operating expenses 2,615.5 2,809.7 2,556.6 2,579.8
- Operating income 714.8 494.6 773.7 721.0
- Operating margin 21.5% 15.0% 23.2% 21.8%
- EBITDA (operating cash flow)* 1,322.7 1,125.8 1,381.6 1,352.2
- EBITDA margin 39.7% 34.1% 41.5% 41.0%
- Net income 379.7 235.6 416.5 378.7
- Earnings per share $0.86 $0.55 $0.95 $0.88
- Wghtd. avg. shares
- outstanding 439.9 431.0 439.9 431.0
- *EBITDA refers to operating 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.
- NYNEX CORPORATION
- Financial Results
- (Unaudited)
- 12 MONTHS 1996
___________________________________________________________________
- Reported Adjusted (a)
- (in millions, except 12 Months Ended 12 Months Ended
- EPS and percentages) 12/31/96 12/31/95 12/31/96 12/31/95
- ------ ------ ------ ------
- Operating revenues $13,453.8 $13,406.9 $13,522.8 $12,993.1
- Operating expenses 10,840.9 11,314.7 10,509.1 10,212.4
- Operating income 2,612.9 2,092.2 3,013.7 2,780.7
- Operating margin 19.4% 15.6% 22.3% 21.4%
- EBITDA (operating cash flow)* 5,112.2 4,659.0 5,513.0 5,296.3
- EBITDA margin 38.0% 34.8% 40.8% 40.8%
- Earnings before extraordinary
- item and cumulative effect
- of change in accounting
- principle 1,346.0 1,069.5 1,574.5 1,396.5
- Extraordinary item ----- (2,919.4) ----- -----
- Cumulative effect of change
- in accounting principle 131.0 -- -- --
- Net income (loss) 1,477.0 (1,849.9) 1,574.5 1,396.5
- Earnings per share before
- extraordinary item and
- cumulative effect of change
- in accounting principle $3.08 $ 2.50 $3.60 $3.27
- Earnings (loss) per share $3.38 $(4.34) $3.60 $3.27
- Wghtd. avg. shares outstanding 436.9 426.5 436.9 426.5
- *EBITDA refers to operating income plus depreciation and amortization.
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(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 with 1996.
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