8-K 1 elipr4thqtr2001.txt ELI 4TH QUARTER ANALYSIS SCHEDULES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: March 7, 2002 ----------------- (Date of earliest event reported) Electric Lightwave, Inc. ------------------------------------------------- (Exact name of Registrant as specified in charter) Delaware 0-23393 93-1035711 ---------------------------- ------------------------ ------------------- (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) 3 High Ridge Park, Stamford, CT 06905 -------------------------------------------- -------- (Address of principal executive offices) (Zip Code) (203) 614-5600 --------------- (Registrant's telephone number, including area code) No change since last report --------------------------- (Former name or address, if changed since last report) Item 7. Financial Statements, Exhibits (c) Exhibits 99.1 Press Release of Electric Lightwave, Inc. released March 7, 2002 announcing earnings for the quarter and year ended December 31, 2001. FOR IMMEDIATE RELEASE Contact: Brigid M. Smith, Assistant Vice President Corporate Communications (203) 614-5042 bsmith@czn.com Electric Lightwave Reports Financial Results for 2001 Fourth Quarter and Year End Stamford, Conn., March 7, 2002 - Electric Lightwave, Inc. (NASDAQ: ELIX) today reported financial results for the fourth quarter and year ended December 31, 2001. The following information should be read in conjunction with our financial statements and footnotes contained in our Form 10-K to be filed with the Securities and Exchange Commission. Revenue for 2001 totaled $226.6 million compared to $244.0 million for 2000, a decrease of 7 percent. Fourth-quarter revenue for 2001 was $50.3 million compared to $63.0 million in the prior year's fourth quarter, a decrease of 20 percent. The net loss for 2001 was $171.7 million or $3.37 per share, compared to a net loss of $136.5 million or $2.71 per share in 2000. Electric Lightwave, Inc. (ELI) EBITDA for 2001 was $5.8 million, a $4.0 million increase over $1.8 million EBITDA for 2000. ELI fourth-quarter 2001 EBITDA was $.6 million, a $4.5 million decrease from $5.1 million EBITDA for the 2000 fourth quarter. EBITDA is operating income plus depreciation and amortization. EBITDA is a measure commonly used to analyze companies on the basis of operating performance. EBITDA is not a measure of financial performance nor is it an alternative to cash flow as a measure of liquidity and may not be comparable to similarly titled measures of other companies. ELI's results for the year ended December 31, 2001 were affected by severance costs of $3.2 million and a restructuring related to exiting certain long-haul markets with an associated expense of $4.2 million and lower-than-anticipated revenue primarily due to a downturn in economic conditions that affected Internet service providers and related businesses; a decline in data services due to the expiration of a material contract; and a decrease in reciprocal compensation. ELI Class A Common Stock is currently traded on the Nasdaq National Market System, but the stock does not meet minimum bid price and market value of public float requirements for continued listing. If the stock is unable to regain compliance by May 15, 2002, the stock could be subject to delisting at that time. Guidance for 2002 for ELI is reaffirmed at: Revenue of $250.0 million; adjusted EBITDA of $22.0 million; and capital expenditures of $75.0 million, excluding the exercise of the purchase option of $110 million under the synthetic lease. About Electric Lightwave, Inc. Electric Lightwave, Inc. is a facilities-based competitive local exchange carrier providing Internet, data, voice and dedicated access services to communications-intensive businesses in the western United States. The company is 85 percent owned by Citizens Communications (NYSE: CZN, CZB). More information about Electric Lightwave, Inc. may be found at www.eli.net. This press 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. All forward-looking statements are only predictions or statements of current plans, which are constantly under review by Electric Lightwave (the company). All forward-looking statements may differ from actual future results due to, 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, changes in legal and regulatory policy, relations with Incumbent Local Exchange Carriers (ILECs) and their ability to provide delivery of services including interoffice trunking, implementation of back office service delivery systems, 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. Readers should consider these important factors in evaluating any statement contained herein and/or made by the company or on its behalf. The company has no obligation to update or revise forward-looking statements to reflect the occurrence of future events or circumstances. TABLES TO FOLLOW Electric Lightwave, Inc. Statements of Operations (In thousands, except per share amounts)

~~Electric Lightwave, Inc. Statements of Operations~~ Three Months Ended ~~September~~12/31/2001 9/30,/2001 12/31/2000 ------------------- ------------ ~~(Dollars in thousands, except per share amounts) 2001 2000~~ ------- ------- -------------- Revenue: Network ~~services~~Services $ 23,372 $ 26,077 $ 2122,~~627~~633 Local ~~telephone~~Telephone ~~services~~Services 15,177 14,450 2523,~~187~~231 Long ~~distance~~Distance ~~services~~Services 2,980 3,131 3,728 Data ~~services~~Services 8,790 9,672 13,~~068~~377 ------------------- ------------------- ------------------- Total ~~revenue~~Revenues 50,319 53,330 6362,~~610~~969 ------------------- ------------------- ------------------- Operating ~~expenses~~Expenses: Network ~~access~~Access ~~expense~~20,775 17,232 17,~~821~~294 Operations ~~expense~~10,778 14,442 1314,~~473~~245 Selling, ~~general~~General and ~~administrative~~Administrative 18,109 22,361 2726,~~430~~263 Severance expense 62 1,418 ~~110~~54 Depreciation and ~~amortization~~Amortization 20,375 19,919 1617,~~306~~882 ------------------- ------------------- ------------------- Total ~~operating~~Operating ~~expenses~~Expenses 70,099 75,372 75,~~140~~738 ------------------- ------------------- ------------------- Loss from ~~operations~~Operations (19,780) (22,042) (1112,~~530~~769) Interest ~~expense~~Expense and ~~other~~Other 25,943 25,231 2021,~~603~~544 ------------------- ------------------- ------------------- Net ~~loss~~Loss ~~before~~Before ~~income~~Income ~~taxes~~Taxes (45,723) (47,273) (3234,~~133~~313) Income ~~tax~~Tax ~~expense~~Expense 705 22 ~~459~~(540) ------------------- ------------------- ------------------- Net ~~loss~~Loss $(46,428) $(47,295) $ (3233,~~592~~773) =================== =================== =================== EBITDA ~~(1)~~$ 595 $ (2,123) $ 45,~~776~~113 =================== =================== =================== Weighted average shares outstanding 51,103 51,107 50,494 Net ~~loss~~Loss ~~per~~Per ~~common~~Common ~~share~~Share: Basic $ (0.9291) $ (0.6493) ~~Diluted~~ $ (0.9267) Diluted $ (0.6491) ~~Weighted~~$ ~~average shares outstanding 51,168 50,606~~ (10.93) ~~EBITDA~~$ ~~is Operating income plus depreciation and amortization~~(0.67)

Electric Lightwave, Inc. Statements of Operations (In thousands, except per share amounts) Twelve Months Ended 12/31/2001 12/31/2000 --------------- ---------------- Revenue: Network Services $ 101,338 $ 77,437 Local Telephone Services 73,291 98,643 Long Distance Services 12,294 16,318 Data Services 39,717 51,579 --------------- ----------------- Total Revenues 226,640 243,977 --------------- ----------------- Operating Expenses: Network Access 71,789 74,105 Operations 51,598 52,740 Selling, General and Administrative 94,221 115,139 Severance expense 3,203 206 Depreciation and Amortization 79,022 61,663 --------------- --------------- Total Operating Expenses 299,833 303,853 --------------- --------------- Loss from Operations (73,193) (59,876) Interest Expense and Other 97,345 76,186 ---------------- --------------- Net Loss Before Income Taxes (170,538) (136,062) Income Tax Expense 1,154 400 ---------------- --------------- Net Loss $(171,692) $(136,462) ================ =============== EBITDA $ 5,829 $ 1,787 ================ =============== Weighted average shares outstanding 50,978 50,274 Net Loss Per Common Share: Basic $ (3.37) $ (2.71) Diluted $ (3.37) $ (2.71) Electric Lightwave, Inc. Selected Financial & Operating Data (In thousands, except selected operating data)

~~Electric~~12/31/2001 ~~Lightwave, Inc. Statements of Operations Nine Months Ended September~~ 9/30,/2001 12/31/2000 ------------------ ------------- ~~(Dollars in thousands, except per share amounts) 2001 2000~~ ----- --------- ---------~~-----~~ ~~Revenue~~Selected ~~Network~~Financial ~~services~~Data Gross Property Plant & Equipment Owned or under capital lease $ 771,~~966~~037,349 $ 541,~~804~~029,724 ~~Local~~$ ~~telephone services 58~~978,~~114~~327 ~~75,412~~Under ~~Long~~operating ~~distance~~lease ~~services~~(1) ~~9,314~~$ 12108,~~590~~541 ~~Data~~$ ~~services 30~~108,~~927~~541 38$ 108,~~202~~541 ------------------ ------------------ ------------------ Total ~~revenue~~$ ~~176~~1,~~321~~145,890 ~~181~~$ 1,~~008~~138,265 $1,086,868 Selected Operating ~~expenses~~Data ~~Network~~Markets ~~access~~25 ~~expense~~25 ~~51,014~~25 ~~56,811~~Route ~~Operations~~Miles ~~expense~~(2) 406,~~820~~754 386,~~494~~737 ~~Selling~~5,924 ~~general~~Fiber ~~and~~Miles ~~administrative~~(2) 76354,~~112~~083 88353,~~875~~785 ~~Severance~~297,284 ~~expense~~Buildings ~~3,141~~Connected ~~152~~On-Net ~~Depreciation~~859 860 851 Switches and ~~amortization~~Routers: ~~58,647~~Internet ~~43,782~~Routers ~~--------------~~80 ~~--------------~~79 ~~Total~~65 ~~operating~~ATM ~~expenses~~Switches ~~229,734~~23 ~~228,114~~23 ~~Loss~~23 ~~from~~Frame ~~operations~~Relay ~~(53,413)~~Switches ~~(47,106)~~33 ~~Interest~~32 ~~expense~~32 ~~and~~Voice ~~other~~Switches 718 8 8 Access Line Equivalents 148,~~401~~787 54172,~~643~~372 ~~--------------~~200,231 ~~--------------~~Access ~~Net~~Line ~~loss~~Equivalents/Voice ~~before~~Switch ~~income~~18,598 ~~taxes (124~~21,~~814)~~547 ~~(101~~25,~~749)~~029 ~~Income~~% ~~tax~~on ~~expense~~Switch ~~449~~98% ~~940~~99% ~~--------------~~96% ~~--------------~~Employees ~~Net~~823 ~~loss~~928 ~~$ (125~~1,~~263)~~161 $Customers ~~(102~~2,~~689)~~243 ~~==============~~2,245 ~~==============~~2,246 ~~EBITDA~~ (1) $Facilities ~~5,234~~under $an ~~(3,324)~~operating ~~==============~~lease ~~==============~~agreement ~~Net~~under ~~loss~~which ~~per~~we ~~common~~have ~~share:~~the ~~Basic~~option $to ~~(2.46)~~purchase $the ~~(2.04)~~facilites ~~Diluted~~at $the ~~(2.46)~~end $of the lease term. (2~~.04~~) ~~Weighted~~Route ~~average~~and ~~shares~~Fiber ~~outstanding~~miles ~~50,995~~also ~~50,404~~include ~~(1)~~those ~~EBITDA~~to iswhich ~~Operating~~we ~~income~~have ~~plus~~exclusive ~~depreciation~~use pursuant to license and ~~amortization~~lease arrangements.

Signature --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ELECTRIC LIGHTWAVE, INC. ------------------------ (Registrant) By: /s/ Robert J. Larson ------------------------------------------ Robert J. Larson Vice President and Chief Accounting Officer Date: March 7, 2002

Electric Lightwave, Inc. Selected Financial and Operating Data (Dollars in thousands) September 30, 2001 June 30, 2001 September 30, 2000 ----------------------- ----------------- ---------------------- Selected Financial Data Gross Property Plant & Equipment: Owned or under capital lease $ 1,029,724 $ 1,023,783 $ 962,454 Under operating lease (1) $ 108,541 $ 108,541 $ 108,541 ----------------------- ----------------- ---------------------- Total $ 1,138,265 $ 1,132,324 $ 1,070,995 ======================= ================= ====================== Selected Operating Data Markets 25 25 25 Route miles (2) 6,737 6,734 5,921 Fiber miles (2) 353,785 349,455 297,208 Buildings connected on-net 860 856 850 Switches and routers: Internet routers 79 79 65 ATM switches 23 23 23 Frame relay switches 33 33 32 Voice switches 10 8 8 Access Line Equivalents 172,372 187,981 203,911 Access Line Equivalents/Voice switch 17,237 23,498 25,489 % on switch 99% 97% 92% Employees 928 949 1,156 Customers 2,245 2,267 2,915

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