Fourth quarter results; dividend declared
GOOD NEWS
Telus Corp T
Shares issued 141,718,080 Feb 10 close $20.30
Mon 10 Feb 97 News Release
Mr George Petty reports
Net income of $59.9 million for the quarter ended December 31 1996 was 89%
higher than a year ago. Earnings per share were $0.42 in the fourth quarter
compared to $0.22 in the same period in 1995.
Telus Communications and the Telus Mobility companies have contributed
higher operating income this quarter compared to last year.
For the full year net income was $242.6 million, a 27% increase over 1995.
Earnings per share were $1.70 in 1996 compared to $1.36 in 1995.
During 1996 the company created a new way of doing business. It launched a
single Telus brand, became price competitive and halted its market share
slide in the residential long distance market, made significant
improvements in customer service and centralized support functions. This
year will be no less challenging, but the company enters it with a real
sense of momentum and confidence.
Operating revenues for the fourth quarter were $513.8 million, up 13% from
a year ago. Local service revenue was up $53.0 million. Increased revenue
of $17.7 million in mobility operations came from strong customer growth
and at Telus Communications local rate increases added $19.5 million. The
cellular customer base has grown to over 328,000, up 38% from a year ago.
Increased sales of enhanced and Internet services has added $3.8 million to
quarterly revenues and higher contributions by competitors for access to
its local network added $7.8 million. Long distance revenue was down $5.8
million or 3% this quarter. Competitive long distance losses at Telus
Communications were offset by both reduced payments to the revenue
settlement plans and increased long distance usage by Telus Mobility
cellular customers. Other revenue was $10.7 million higher than last year
primarily due to the growing customer bases at the ISM Alberta and
Telecential partnerships.
Operations expense for the fourth quarter was up 10% to $297.9 million, as
compared to the same period a year ago. Of the $26.6 million increase, $7.8
million was from mobility operations - primarily from higher costs of
serving a larger customer base. The larger ISM Alberta and Telecential
partnerships incurred $11.3 million of increased expenses. The Telus
Communications operations expense increase included $6.3 million from
higher compensation related to achieving performance targets and the cost
of replacing all long distance calling cards. Reorganization costs of $10.0
million were largely offset by lower expenses at Telus Advertising.
Depreciation and amortization expense also increased $7.7 million or 7%
this quarter to $117.1 million. This was due to higher asset bases at the
Telus Communications companies, Telus Mobility and Telecential.
Interest expense increased slightly this quarter to $40.4 million, due to a
$4.9 million write down of previously deferred bank facility financing
costs at the Telecential partnership.
Other income of $3.7 million this quarter was caused by another quarter of
reduced contributions to certain benefit plans.
Cash provided by operating activities before working capital changes was
$184.5 million for the fourth quarter, a 23% increase compared to a year
ago.
Consolidated capital expenditures of $163.7 million in the fourth quarter
increased by $6.8 million over 1995.
The Telus 1996 annual report is to be mailed in mid-March along with the
information circular for the annual meeting. The annual meeting is to be
held in Edmonton in April 1997.
With respect to 1997, earnings are expected to be influenced by two
non-cash expenses. Higher depreciation rates were recently approved by the
federal regulator for 1997 and TELUS will begin to record deferred income
tax for the first time. However, as these expenses are non-cash, the growth
in operating cash flow should continue.
STATEMENT OF EARNINGS
Three months ended December 31
($ million)
1996 1995
Operating revenues
Local service $ 277.7 $ 224.7
Long distance service 177.8 183.6
Other 58.3 47.6
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513.8 455.9
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Operating expenses
Operations 297.9 271.3
Depreciation and
amortization 117.1 109.4
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415.0 380.7
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Income from
operations 98.8 75.2
Interest expense, net 40.4 39.5
Other (3.7) 2.0
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Income before
income taxes 62.1 33.7
Income taxes 2.2 2.0
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Net income (loss) $ 59.9 $ 31.7
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Earnings (loss)
per share $ 0.42 $ 0.22
Twelve months ended December 31
($ million)
1996 1995
Operating revenues
Local service $ 1,027.1 $ 795.5
Long distance
service 698.6 709.7
Other 187.9 158.6
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1,913.6 1,663.8
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Operating expenses
Operations 1,062.7 918.4
Depreciation and
amortization 458.6 417.4
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1,521.3 1,335.8
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Income from
operations 392.3 328.0
Interest expense, net 148.7 151.4
Other (7.1) (31.7)
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Income before
income taxes 250.7 208.3
Income taxes 8.1 17.5
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Net income (loss) $ 242.6 $ 190.8
======= =======
Earnings (loss)
per share $ 1.70 $ 1.36
Mr Geroge Malysheff reports
The board of directors has declared a quarterly dividend of $0.23 per share
on the outstanding shares payable on April 15 1997 to holders of record at
the close of business on March 21 1997. |
