Business Principles, Tools, and Techniques in Participating in Various Types...
alltel 4Q04_Supplemental
1. On April 1, 2003, ALLTEL Corporation (quot;ALLTELquot; or the quot;Companyquot;) completed the sale of the financial services division of its
information services subsidiary, ALLTEL Information Services, Inc., to Fidelity National Financial Inc. As a result of this transaction, the
financial services division has been reflected in the accompanying supplemental financial data as discontinued operations for all periods
presented. The telecom division of ALLTEL Information Services, Inc. was retained by the Company and was not part of the
transaction. The operations of the retained telecom division are included in the communications support services segment. In
accordance with Statement of Financial Accounting Standards (“SFAS”) No. 131, “Disclosures about Segments of an Enterprise and
Related Information,” all prior period segment information has been restated to conform to this new financial reporting presentation.
The accompanying supplemental financial data restate prior period results commencing with 2002 to reflect the changes in financial
reporting presentation discussed above.
The supplemental financial data contain disclosure of non-GAAP financial measures. A reconciliation of each of the non-GAAP financial
measures to its most directly comparable financial measure calculated and presented in accordance with GAAP is posted on the
Investor Relations page of the Company's web site under quot;Quarterly Reports and Financial Statisticsquot;.
ALLTEL claims the protection of the safe-harbor for forward-looking statements contained in the Private Securities Litigation Reform Act
of 1995. Forward-looking statements are subject to uncertainties that could cause actual future events and results to differ materially
from those expressed in the forward-looking statements. These forward-looking statements are based on estimates, projections, beliefs,
and assumptions and are not guarantees of future events and results. Actual future events and results may differ materially from those
expressed in these forward-looking statements as a result of a number of important factors. Representative examples of these factors
include (without limitation) adverse changes in economic conditions in the markets served by ALLTEL; the extent, timing, and overall
effects of competition in the communications business; material changes in the communications industry generally that could adversely
affect vendor relationships with equipment and network suppliers and customer relationships with wholesale customers; changes in
communications technology; the risks associated with the integration of acquired businesses; adverse changes in the terms and
conditions of the Company’s wireless roaming agreements; the potential for adverse changes in the ratings given to ALLTEL's debt
securities by nationally accredited ratings organizations; the availability and cost of financing in the corporate debt markets; the
uncertainties related to ALLTEL’s strategic investments; the effects of work stoppages; the effects of litigation; and the effects of federal
and state legislation, rules, and regulations governing the communications industry. In addition to these factors, actual future
performance, outcomes, and results may differ materially because of more general factors including (without limitation) general industry
and market conditions and growth rates, economic conditions, and governmental and public policy changes.
2. ALLTEL Corporation
Consolidated Quarterly Statements of Income From Current Businesses (Non-GAAP)
for quarterly periods in the years 2004, 2003 and 2002
2004 2003 2002
Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
(In thousands, except per share amounts)
Revenues and Sales:
Service revenues $7,374,279 $1,897,402 $1,885,405 $1,825,894 $1,765,578 $7,156,067 $1,806,026 $1,836,059 $1,797,520 $1,716,462 $6,428,942 $1,734,481 $1,691,248 $1,524,322 $1,478,891
Product sales 871,862 242,391 217,707 216,170 195,594 823,843 207,650 214,125 212,732 189,336 683,444 188,294 176,438 174,715 143,997
Total revenues and sales 8,246,141 2,139,793 2,103,112 2,042,064 1,961,172 7,979,910 2,013,676 2,050,184 2,010,252 1,905,798 7,112,386 1,922,775 1,867,686 1,699,037 1,622,888
Costs and Expenses:
Cost of services 2,374,220 604,818 624,442 584,189 560,771 2,273,598 567,946 602,609 565,612 537,431 2,025,014 538,620 541,402 485,426 459,566
Cost of products sold 1,075,545 299,603 262,604 256,055 257,283 1,043,468 262,058 272,344 271,354 237,712 891,306 233,905 224,305 224,360 208,736
Selling, general, administrative and other 1,524,165 402,489 373,624 372,859 375,193 1,498,122 388,290 376,285 372,458 361,089 1,297,034 363,616 336,633 310,425 286,360
Depreciation and amortization 1,299,691 332,520 324,678 321,151 321,342 1,247,748 321,330 312,183 310,712 303,523 1,095,469 304,298 285,908 257,766 247,497
Total costs and expenses 6,273,621 1,639,430 1,585,348 1,534,254 1,514,589 6,062,936 1,539,624 1,563,421 1,520,136 1,439,755 5,308,823 1,440,439 1,388,248 1,277,977 1,202,159
Operating Income 1,972,520 500,363 517,764 507,810 446,583 1,916,974 474,052 486,763 490,116 466,043 1,803,563 482,336 479,438 421,060 420,729
Equity earnings in unconsolidated partnerships 68,486 14,970 24,338 15,926 13,252 64,373 16,401 13,778 16,689 17,505 65,776 23,260 20,131 13,741 8,644
Minority interest in consolidated partnerships (80,096) (19,227) (23,647) (21,651) (15,571) (78,604) (17,093) (22,287) (21,390) (17,834) (73,339) (18,610) (21,027) (18,677) (15,025)
Other income (expense), net 34,500 11,360 15,652 2,875 4,613 11,068 3,596 3,391 3,634 447 (5,850) (3,581) (4,751) 1,246 1,236
Interest expense (352,490) (87,512) (86,699) (86,543) (91,736) (378,627) (90,881) (91,164) (93,210) (103,372) (320,170) (109,220) (90,383) (59,696) (60,871)
Income before income taxes 1,642,920 419,954 447,408 418,417 357,141 1,535,184 386,075 390,481 395,839 362,789 1,469,980 374,185 383,408 357,674 354,713
Income taxes 604,810 149,896 163,383 155,889 135,642 580,789 146,081 147,718 151,823 135,167 553,024 142,283 142,189 134,865 133,687
Net income 1,038,110 270,058 284,025 262,528 221,499 954,395 239,994 242,763 244,016 227,622 916,956 231,902 241,219 222,809 221,026
Preferred dividends 103 25 25 26 27 111 27 28 28 28 125 29 31 32 33
Net income applicable to common shares $1,038,007 $270,033 $284,000 $262,502 $221,472 $954,284 $239,967 $242,735 $243,988 $227,594 $916,831 $231,873 $241,188 $222,777 $220,993
Earnings Per Share:
Basic $3.38 $.89 $.93 $.85 $.71 $3.06 $.77 $.78 $.78 $.73 $2.95 $.75 $.78 $.72 $.71
Diluted $3.37 $.89 $.92 $.85 $.71 $3.05 $.77 $.78 $.78 $.73 $2.94 $.74 $.77 $.71 $.71
Current businesses excludes the effects of discontinued operations, early termination of debt, integration expenses, restructuring and other charges, gain (loss) on disposal of assets, reversal of certain income tax contingency reserves, write-down of investments
and receivables, and net financing costs related to prefunding the Company's 2002 wireless and wireline acquisitions.
During the fourth quarter of 2003, the Company changed the reporting classification of regulatory fees assessed to customers related to the Universal Service Fund from quot;selling, general, administrative and otherquot; to quot;cost of servicesquot;.
All prior period amounts were reclassified to conform with this new presentation.
3. ALLTEL Corporation
Consolidated Quarterly Statements of Income Under GAAP
for quarterly periods in the years 2004, 2003 and 2002
2004 2003 2002
Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
(In thousands, except per share amounts)
Revenues and Sales:
Service revenues $7,374,279 $1,897,402 $1,885,405 $1,825,894 $1,765,578 $7,156,067 $1,806,026 $1,836,059 $1,797,520 $1,716,462 $6,428,942 $1,734,481 $1,691,248 $1,524,322 $1,478,891
Product sales 871,862 242,391 217,707 216,170 195,594 823,843 207,650 214,125 212,732 189,336 683,444 188,294 176,438 174,715 143,997
Total revenues and sales 8,246,141 2,139,793 2,103,112 2,042,064 1,961,172 7,979,910 2,013,676 2,050,184 2,010,252 1,905,798 7,112,386 1,922,775 1,867,686 1,699,037 1,622,888
Costs and Expenses:
Cost of services 2,374,220 604,818 624,442 584,189 560,771 2,273,598 567,946 602,609 565,612 537,431 2,039,014 538,620 541,402 499,426 459,566
Cost of products sold 1,075,545 299,603 262,604 256,055 257,283 1,043,468 262,058 272,344 271,354 237,712 891,306 233,905 224,305 224,360 208,736
Selling, general, administrative and other 1,524,165 402,489 373,624 372,859 375,193 1,498,122 388,290 376,285 372,458 361,089 1,297,034 363,616 336,633 310,425 286,360
Depreciation and amortization 1,299,691 332,520 324,678 321,151 321,342 1,247,748 321,330 312,183 310,712 303,523 1,095,469 304,298 285,908 257,766 247,497
Integration expenses, restructuring and other charges 50,892 (873) - - 51,765 18,979 - - 18,979 - 69,883 (2,526) 20,539 9,022 42,848
Total costs and expenses 6,324,513 1,638,557 1,585,348 1,534,254 1,566,354 6,081,915 1,539,624 1,563,421 1,539,115 1,439,755 5,392,706 1,437,913 1,408,787 1,300,999 1,245,007
Operating Income 1,921,628 501,236 517,764 507,810 394,818 1,897,995 474,052 486,763 471,137 466,043 1,719,680 484,862 458,899 398,038 377,881
Equity earnings in unconsolidated partnerships 68,486 14,970 24,338 15,926 13,252 64,373 16,401 13,778 16,689 17,505 65,776 23,260 20,131 13,741 8,644
Minority interest in consolidated partnerships (80,096) (19,227) (23,647) (21,651) (15,571) (78,604) (17,093) (22,287) (21,390) (17,834) (73,339) (18,610) (21,027) (18,677) (15,025)
Other income (expense), net 34,500 11,360 15,652 2,875 4,613 11,068 3,596 3,391 3,634 447 2,350 (3,581) (842) 5,537 1,236
Interest expense (352,490) (87,512) (86,699) (86,543) (91,736) (378,627) (90,881) (91,164) (93,210) (103,372) (355,129) (109,220) (107,529) (77,509) (60,871)
Gain (loss) on disposal of assets, write-down of
investments and other - - - - - 17,933 30,999 - (13,066) - 985 19,516 (4,792) (13,739) -
Income from continuing operations before income taxes 1,592,028 420,827 447,408 418,417 305,376 1,534,138 417,074 390,481 363,794 362,789 1,360,323 396,227 344,840 307,391 311,865
Income taxes 565,331 150,182 143,727 155,889 115,533 580,609 158,139 147,718 139,585 135,167 510,163 150,832 127,024 115,378 116,929
Income from continuing operations 1,026,697 270,645 303,681 262,528 189,843 953,529 258,935 242,763 224,209 227,622 850,160 245,395 217,816 192,013 194,936
Discontinued operations:
Income from discontinued operations (net of income
taxes) 19,538 - 19,538 - - 37,072 - - - 37,072 74,150 11,178 19,947 24,155 18,870
Gain on sale of discontinued operations (net of income
taxes) - - - - - 323,927 - - 323,927 - - - - - -
Income before cumulative effect of accounting change 1,046,235 270,645 323,219 262,528 189,843 1,314,528 258,935 242,763 548,136 264,694 924,310 256,573 237,763 216,168 213,806
Cumulative effect of accounting change (net of income
taxes) - - - - - 15,591 - - - 15,591 - - - - -
Net income 1,046,235 270,645 323,219 262,528 189,843 1,330,119 258,935 242,763 548,136 280,285 924,310 256,573 237,763 216,168 213,806
Preferred dividends 103 25 25 26 27 111 27 28 28 28 125 29 31 32 33
Net income applicable to common shares $1,046,132 $270,620 $323,194 $262,502 $189,816 $1,330,008 $258,908 $242,735 $548,108 $280,257 $924,185 $256,544 $237,732 $216,136 $213,773
Earnings Per Share:
Basic:
Income from continuing operations $3.34 $.89 $ .99 $.85 $.61 $3.06 $.83 $.78 $ .72 $.73 $2.73 $.79 $.70 $.62 $.63
Income from discontinued operations .06 - .06 - - 1.16 - - 1.04 .12 .24 .03 .06 .08 .06
Cumulative effect of accounting change - - - - - .05 - - - .05 - - - - -
Net income $3.40 $.89 $1.05 $.85 $.61 $4.27 $.83 $.78 $1.76 $.90 $2.97 $.82 $.76 $.70 $.69
Diluted:
Income from continuing operations $3.33 $.89 $ .99 $.85 $.61 $3.05 $.83 $.78 $ .72 $.73 $2.72 $.79 $.70 $.61 $.62
Income from discontinued operations .06 - .06 - - 1.15 - - 1.03 .12 .24 .03 .06 .08 .06
Cumulative effect of accounting change - - - - - .05 - - - .05 - - - - -
Net income $3.39 $.89 $1.05 $.85 $.61 $4.25 $.83 $.78 $1.75 $.90 $2.96 $.82 $.76 $.69 $.68
During the fourth quarter of 2003, the Company changed the reporting classification of regulatory fees assessed to customers related to the Universal Service Fund from quot;selling, general, administrative and otherquot; to quot;cost of servicesquot;.
All prior period amounts were reclassified to conform with this new presentation.
4. ALLTEL CORPORATION
QUARTERLY SUPPLEMENTAL BUSINESS SEGMENT INFORMATION FROM CURRENT BUSINESSES (NON-GAAP)
for the quarterly periods in the years 2004, 2003 and 2002
(In thousands)
2004 2003 2002
Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
Wireless:
Revenues and sales:
Service revenues $4,791,235 $1,252,773 $1,239,409 $1,183,549 $1,115,504 $4,466,462 $1,128,024 $1,163,786 $1,127,642 $1,047,010 $3,999,206 $1,065,747 $1,053,170 $965,543 $914,746
Product sales 286,852 73,999 74,338 69,533 68,982 261,937 63,908 69,446 67,774 60,809 160,998 53,635 40,798 37,182 29,383
Total revenues and sales 5,078,087 1,326,772 1,313,747 1,253,082 1,184,486 4,728,399 1,191,932 1,233,232 1,195,416 1,107,819 4,160,204 1,119,382 1,093,968 1,002,725 944,129
Costs and expenses:
Cost of services 1,543,576 399,114 406,660 382,060 355,742 1,367,812 350,603 361,107 339,730 316,372 1,243,068 329,004 335,667 302,293 276,104
Cost of products sold 573,646 154,747 139,301 135,048 144,550 536,648 131,243 141,712 141,246 122,447 430,550 114,672 102,499 103,624 109,755
Selling, general, administrative
and other 1,201,789 318,968 294,070 293,009 295,742 1,154,961 303,033 292,999 287,085 271,844 957,983 269,728 249,578 231,851 206,826
Depreciation and amortization 738,837 193,789 186,169 181,350 177,529 670,978 175,446 168,999 165,364 161,169 577,652 159,483 149,388 137,573 131,208
Total costs and expenses 4,057,848 1,066,618 1,026,200 991,467 973,563 3,730,399 960,325 964,817 933,425 871,832 3,209,253 872,887 837,132 775,341 723,893
Segment income $1,020,239 $260,154 $287,547 $261,615 $210,923 $998,000 $231,607 $268,415 $261,991 $235,987 $950,951 $246,495 $256,836 $227,384 $220,236
Wireline:
Revenues and sales:
Service revenues $2,380,788 $597,315 $592,373 $599,567 $591,533 $2,395,625 $605,665 $595,319 $597,109 $597,532 $2,145,315 $598,107 $566,536 $489,265 $491,407
Product sales 39,021 10,460 10,563 10,065 7,933 40,454 10,119 9,876 9,135 11,324 34,446 9,708 9,152 7,941 7,645
Total revenues and sales 2,419,809 607,775 602,936 609,632 599,466 2,436,079 615,784 605,195 606,244 608,856 2,179,761 607,815 575,688 497,206 499,052
Costs and expenses:
Cost of services 704,335 173,146 179,719 178,599 172,871 737,161 173,751 195,747 185,580 182,083 634,166 175,511 171,224 146,146 141,285
Cost of products sold 28,711 8,576 7,822 7,158 5,155 29,131 7,495 7,375 6,319 7,942 24,843 7,404 6,458 5,695 5,286
Selling, general, administrative
and other 244,327 62,466 60,033 60,908 60,920 259,406 65,644 63,410 64,143 66,209 251,214 69,366 65,855 56,906 59,087
Depreciation and amortization 516,445 127,921 127,580 128,610 132,334 526,508 132,064 131,234 133,376 129,834 465,599 131,798 123,389 107,100 103,312
Total costs and expenses 1,493,818 372,109 375,154 375,275 371,280 1,552,206 378,954 397,766 389,418 386,068 1,375,822 384,079 366,926 315,847 308,970
Segment income $925,991 $235,666 $227,782 $234,357 $228,186 $883,873 $236,830 $207,429 $216,826 $222,788 $803,939 $223,736 $208,762 $181,359 $190,082
Communications support services:
Revenues and sales
Service revenues $346,662 $81,462 $86,862 $84,583 $93,755 $428,983 $105,910 $108,808 $106,708 $107,557 $434,465 $109,224 $111,672 $109,625 $103,944
Product sales 577,193 167,027 140,275 144,596 125,295 530,078 141,229 135,155 136,127 117,567 491,209 125,694 127,324 130,277 107,914
Total revenues and sales 923,855 248,489 227,137 229,179 219,050 959,061 247,139 243,963 242,835 225,124 925,674 234,918 238,996 239,902 211,858
Costs and expenses:
Cost of services 257,845 64,297 68,910 58,679 65,959 299,006 74,876 76,820 73,458 73,852 295,299 72,419 73,893 76,385 72,602
Cost of products sold 514,239 146,997 124,575 127,799 114,868 486,936 131,568 123,596 124,088 107,684 439,219 112,577 116,237 115,717 94,688
Selling, general, administrative
and other 54,729 14,856 13,593 13,050 13,230 60,511 13,896 14,361 15,682 16,572 69,280 18,451 16,769 17,342 16,718
Depreciation and amortization 34,325 8,454 8,570 8,755 8,546 36,191 9,176 8,843 8,806 9,366 37,750 9,639 9,622 9,353 9,136
Total costs and expenses 861,138 234,604 215,648 208,283 202,603 882,644 229,516 223,620 222,034 207,474 841,548 213,086 216,521 218,797 193,144
Segment income $62,717 $13,885 $11,489 $20,896 $16,447 $76,417 $17,623 $20,343 $20,801 $17,650 $84,126 $21,832 $22,475 $21,105 $18,714
Corporate expenses:
Cost of services $3,023 $787 $767 $730 $739 $4,001 $1,647 $802 $788 $764 $2,428 $278 $695 $722 $733
Selling, general, administrative
and other 23,320 6,199 5,928 5,892 5,301 23,244 5,717 5,515 5,548 6,464 18,557 6,071 4,431 4,326 3,729
Depreciation and amortization 10,084 2,356 2,359 2,436 2,933 14,071 4,644 3,107 3,166 3,154 14,468 3,378 3,509 3,740 3,841
Total costs and expenses $36,427 $9,342 $9,054 $9,058 $8,973 $41,316 $12,008 $9,424 $9,502 $10,382 $35,453 $9,727 $8,635 $8,788 $8,303
5. ALLTEL CORPORATION
QUARTERLY SUPPLEMENTAL BUSINESS SEGMENT INFORMATION FROM CURRENT BUSINESSES (NON-GAAP)
for the quarterly periods in the years 2004, 2003 and 2002
(In thousands)
2004 2003 2002
Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
Intercompany eliminations:
Revenues and sales
Service revenues $(144,406) $(34,148) $(33,239) $(41,805) $(35,214) $(135,003) $(33,573) $(31,854) $(33,939) $(35,637) $(150,044) $(38,597) $(40,130) $(40,111) $(31,206)
Product sales (31,204) (9,095) (7,469) (8,024) (6,616) (8,626) (7,606) (352) (304) (364) (3,209) (743) (836) (685) (945)
Total revenues and sales (175,610) (43,243) (40,708) (49,829) (41,830) (143,629) (41,179) (32,206) (34,243) (36,001) (153,253) (39,340) (40,966) (40,796) (32,151)
Costs and expenses:
Cost of services (134,559) $(32,526) (31,614) (35,879) (34,540) (134,382) (32,931) (31,867) (33,944) (35,640) (149,947) (38,592) (40,077) (40,120) (31,158)
Cost of products sold (41,051) (10,717) (9,094) (13,950) (7,290) (9,247) (8,248) (339) (299) (361) (3,306) (748) (889) (676) (993)
Selling, general, administrative
and other - - - - - - - - - - - - - - -
Depreciation and amortization - - - - - - - - - - - - - - -
Total costs and expenses (175,610) (43,243) (40,708) (49,829) (41,830) (143,629) (41,179) (32,206) (34,243) (36,001) (153,253) (39,340) (40,966) (40,796) (32,151)
Operating income $- $- $- $- $- $- $- $- $- $- $- $- $- $- $-
Consolidated:
Revenues and sales
Service revenues 7,374,279 1,897,402 1,885,405 1,825,894 1,765,578 7,156,067 1,806,026 1,836,059 1,797,520 1,716,462 6,428,942 1,734,481 1,691,248 1,524,322 1,478,891
Product sales 871,862 242,391 217,707 216,170 195,594 823,843 207,650 214,125 212,732 189,336 683,444 188,294 176,438 174,715 143,997
Total revenues and sales $8,246,141 $2,139,793 $2,103,112 $2,042,064 $1,961,172 $7,979,910 $2,013,676 $2,050,184 $2,010,252 $1,905,798 $7,112,386 $1,922,775 $1,867,686 $1,699,037 $1,622,888
Costs and expenses:
Cost of services 2,374,220 604,818 624,442 584,189 560,771 2,273,598 567,946 602,609 565,612 537,431 2,025,014 538,620 541,402 485,426 459,566
Cost of products sold 1,075,545 299,603 262,604 256,055 257,283 1,043,468 262,058 272,344 271,354 237,712 891,306 233,905 224,305 224,360 208,736
Selling, general, administrative
and other 1,524,165 402,489 373,624 372,859 375,193 1,498,122 388,290 376,285 372,458 361,089 1,297,034 363,616 336,633 310,425 286,360
Depreciation and amortization 1,299,691 332,520 324,678 321,151 321,342 1,247,748 321,330 312,183 310,712 303,523 1,095,469 304,298 285,908 257,766 247,497
Total costs and expenses 6,273,621 1,639,430 1,585,348 1,534,254 1,514,589 6,062,936 1,539,624 1,563,421 1,520,136 1,439,755 5,308,823 1,440,439 1,388,248 1,277,977 1,202,159
Operating income $1,972,520 $500,363 $517,764 $507,810 $446,583 $1,916,974 $474,052 $486,763 $490,116 $466,043 $1,803,563 $482,336 $479,438 $421,060 $420,729
Operating Margin: (A)
Wireless 20.1% 19.6% 21.9% 20.9% 17.8% 21.1% 19.4% 21.8% 21.9% 21.3% 22.9% 22.0% 23.5% 22.7% 23.3%
Wireline 38.3% 38.8% 37.8% 38.4% 38.1% 36.3% 38.5% 34.3% 35.8% 36.6% 36.9% 36.8% 36.3% 36.5% 38.1%
Communications Support Services 6.8% 5.6% 5.1% 9.1% 7.5% 8.0% 7.1% 8.3% 8.6% 7.8% 9.1% 9.3% 9.4% 8.8% 8.8%
Consolidated 23.9% 23.4% 24.6% 24.9% 22.8% 24.0% 23.5% 23.7% 24.4% 24.5% 25.4% 25.1% 25.7% 24.8% 25.9%
SUPPLEMENTAL REVENUE INFORMATION:
Wireline:
Revenues and sales:
Local service $1,115,761 $276,456 $278,598 $280,782 $279,925 $1,136,820 $282,702 $283,959 $284,301 $285,858 $1,017,944 $285,656 $269,462 $231,711 $231,115
Network access and long-distance 1,047,894 260,812 263,549 262,816 260,717 1,055,497 271,503 260,280 261,533 262,181 943,514 261,763 249,808 214,532 217,411
Miscellaneous 256,154 70,507 60,789 66,034 58,824 243,762 61,579 60,956 60,410 60,817 218,303 60,396 56,418 50,963 50,526
Total revenues and sales $2,419,809 $607,775 $602,936 $609,632 $599,466 $2,436,079 $615,784 $605,195 $606,244 $608,856 $2,179,761 $607,815 $575,688 $497,206 $499,052
Communications support services:
Revenues and sales:
Long-distance and network
management services $304,870 $75,797 $77,188 $72,848 $79,037 $320,165 $78,003 $80,048 $81,083 $81,031 $316,236 $80,086 $81,822 $79,559 $74,769
Product distribution 421,253 117,018 109,268 95,907 99,060 407,397 106,235 107,253 100,790 93,119 371,255 94,292 102,061 93,982 80,920
Directory publishing 155,940 50,009 31,007 48,689 26,235 122,573 34,982 27,860 35,308 24,423 119,103 31,255 25,149 35,744 26,955
Telecommunications information
services 41,792 5,665 9,674 11,735 14,718 108,926 27,919 28,802 25,654 26,551 119,080 29,285 29,964 30,617 29,214
Total revenues and sales $923,855 $248,489 $227,137 $229,179 $219,050 $959,061 $247,139 $243,963 $242,835 $225,124 $925,674 $234,918 $238,996 $239,902 $211,858
Current businesses excludes integration expenses, restructuring and other charges and the write-down of receivables due to an interexchange carrier's bankruptcy filing. The write-down of receivables was recorded in the second quarter
of 2002, and of the total write-down, $3.1 million related to the wireless segment and $10.9 million related to the wireline segment.
(A) Operating margin is calculated by dividing segment income by the corresponding amount of segment revenues and sales.
During the fourth quarter of 2003, the Company changed the reporting classification of regulatory fees assessed to customers related to the Universal Service Fund from quot;selling, general, administrative and otherquot; to quot;cost
of servicesquot;. All prior period amounts were reclassified to conform with this new presentation.
6. ALLTEL CORPORATION
QUARTERLY SUPPLEMENTAL BUSINESS SEGMENT INFORMATION UNDER GAAP
for the quarterly periods in the years 2004, 2003 and 2002
(In thousands)
2004 2003 2002
Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
Wireless:
Revenues and sales:
Service revenues $4,791,235 $1,252,773 $1,239,409 $1,183,549 $1,115,504 $4,466,462 $1,128,024 $1,163,786 $1,127,642 $1,047,010 $3,999,206 $1,065,747 $1,053,170 $965,543 $914,746
Product sales 286,852 73,999 74,338 69,533 68,982 261,937 63,908 69,446 67,774 60,809 160,998 53,635 40,798 37,182 29,383
Total revenues and sales 5,078,087 1,326,772 1,313,747 1,253,082 1,184,486 4,728,399 1,191,932 1,233,232 1,195,416 1,107,819 4,160,204 1,119,382 1,093,968 1,002,725 944,129
Costs and expenses:
Cost of services 1,543,576 399,114 406,660 382,060 355,742 1,367,812 350,603 361,107 339,730 316,372 1,246,168 329,004 335,667 305,393 276,104
Cost of products sold 573,646 154,747 139,301 135,048 144,550 536,648 131,243 141,712 141,246 122,447 430,550 114,672 102,499 103,624 109,755
Selling, general, administrative
and other 1,201,789 318,968 294,070 293,009 295,742 1,154,961 303,033 292,999 287,085 271,844 957,983 269,728 249,578 231,851 206,826
Depreciation and amortization 738,837 193,789 186,169 181,350 177,529 670,978 175,446 168,999 165,364 161,169 577,652 159,483 149,388 137,573 131,208
Total costs and expenses 4,057,848 1,066,618 1,026,200 991,467 973,563 3,730,399 960,325 964,817 933,425 871,832 3,212,353 872,887 837,132 778,441 723,893
Segment income $1,020,239 $260,154 $287,547 $261,615 $210,923 $998,000 $231,607 $268,415 $261,991 $235,987 $947,851 $246,495 $256,836 $224,284 $220,236
Wireline:
Revenues and sales:
Service revenues $2,380,788 $597,315 $592,373 $599,567 $591,533 $2,395,625 $605,665 $595,319 $597,109 $597,532 $2,145,315 $598,107 $566,536 $489,265 $491,407
Product sales 39,021 10,460 10,563 10,065 7,933 40,454 10,119 9,876 9,135 11,324 34,446 9,708 9,152 7,941 7,645
Total revenues and sales 2,419,809 607,775 602,936 609,632 599,466 2,436,079 615,784 605,195 606,244 608,856 2,179,761 607,815 575,688 497,206 499,052
Costs and expenses:
Cost of services 704,335 173,146 179,719 178,599 172,871 737,161 173,751 195,747 185,580 182,083 645,066 175,511 171,224 157,046 141,285
Cost of products sold 28,711 8,576 7,822 7,158 5,155 29,131 7,495 7,375 6,319 7,942 24,843 7,404 6,458 5,695 5,286
Selling, general, administrative
and other 244,327 62,466 60,033 60,908 60,920 259,406 65,644 63,410 64,143 66,209 251,214 69,366 65,855 56,906 59,087
Depreciation and amortization 516,445 127,921 127,580 128,610 132,334 526,508 132,064 131,234 133,376 129,834 465,599 131,798 123,389 107,100 103,312
Total costs and expenses 1,493,818 372,109 375,154 375,275 371,280 1,552,206 378,954 397,766 389,418 386,068 1,386,722 384,079 366,926 326,747 308,970
Segment income $925,991 $235,666 $227,782 $234,357 $228,186 $883,873 $236,830 $207,429 $216,826 $222,788 $793,039 $223,736 $208,762 $170,459 $190,082
Communications support services:
Revenues and sales
Service revenues $346,662 $81,462 $86,862 $84,583 $93,755 $428,983 $105,910 $108,808 $106,708 $107,557 $434,465 $109,224 $111,672 $109,625 $103,944
Product sales 577,193 167,027 140,275 144,596 125,295 530,078 141,229 135,155 136,127 117,567 491,209 125,694 127,324 130,277 107,914
Total revenues and sales 923,855 248,489 227,137 229,179 219,050 959,061 247,139 243,963 242,835 225,124 925,674 234,918 238,996 239,902 211,858
Costs and expenses:
Cost of services 257,845 64,297 68,910 58,679 65,959 299,006 74,876 76,820 73,458 73,852 295,299 72,419 73,893 76,385 72,602
Cost of products sold 514,239 146,997 124,575 127,799 114,868 486,936 131,568 123,596 124,088 107,684 439,219 112,577 116,237 115,717 94,688
Selling, general, administrative
and other 54,729 14,856 13,593 13,050 13,230 60,511 13,896 14,361 15,682 16,572 69,280 18,451 16,769 17,342 16,718
Depreciation and amortization 34,325 8,454 8,570 8,755 8,546 36,191 9,176 8,843 8,806 9,366 37,750 9,639 9,622 9,353 9,136
Total costs and expenses 861,138 234,604 215,648 208,283 202,603 882,644 229,516 223,620 222,034 207,474 841,548 213,086 216,521 218,797 193,144
Segment income $62,717 $13,885 $11,489 $20,896 $16,447 $76,417 $17,623 $20,343 $20,801 $17,650 $84,126 $21,832 $22,475 $21,105 $18,714
Corporate expenses:
Cost of services $3,023 $787 $767 $730 $739 $4,001 $1,647 $802 $788 $764 $2,428 $278 $695 $722 $733
Selling, general, administrative
and other 23,320 6,199 5,928 5,892 5,301 23,244 5,717 5,515 5,548 6,464 18,557 6,071 4,431 4,326 3,729
Depreciation and amortization 10,084 2,356 2,359 2,436 2,933 14,071 4,644 3,107 3,166 3,154 14,468 3,378 3,509 3,740 3,841
Integration expenses, restructuring
and other charges 50,892 (873) - - 51,765 18,979 - - 18,979 - 69,883 (2,526) 20,539 9,022 42,848
Total costs and expenses $87,319 $8,469 $9,054 $9,058 $60,738 $60,295 $12,008 $9,424 $28,481 $10,382 $105,336 $7,201 $29,174 $17,810 $51,151
7. ALLTEL CORPORATION
QUARTERLY SUPPLEMENTAL BUSINESS SEGMENT INFORMATION UNDER GAAP
for the quarterly periods in the years 2004, 2003 and 2002
(In thousands)
2004 2003 2002
Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
Intercompany eliminations:
Revenues and sales
Service revenues $(144,406) $(34,148) $(33,239) $(41,805) $(35,214) $(135,003) $(33,573) $(31,854) $(33,939) $(35,637) $(150,044) $(38,597) $(40,130) $(40,111) $(31,206)
Product sales (31,204) (9,095) (7,469) (8,024) (6,616) (8,626) (7,606) (352) (304) (364) (3,209) (743) (836) (685) (945)
Total revenues and sales (175,610) (43,243) (40,708) (49,829) (41,830) (143,629) (41,179) (32,206) (34,243) (36,001) (153,253) (39,340) (40,966) (40,796) (32,151)
Costs and expenses:
Cost of services (134,559) (32,526) (31,614) (35,879) (34,540) (134,382) (32,931) (31,867) (33,944) (35,640) (149,947) (38,592) (40,077) (40,120) (31,158)
Cost of products sold (41,051) (10,717) (9,094) (13,950) (7,290) (9,247) (8,248) (339) (299) (361) (3,306) (748) (889) (676) (993)
Selling, general, administrative
and other - - - - - - - - - - - - - - -
Depreciation and amortization - - - - - - - - - - - - - - -
Total costs and expenses (175,610) (43,243) (40,708) (49,829) (41,830) (143,629) (41,179) (32,206) (34,243) (36,001) (153,253) (39,340) (40,966) (40,796) (32,151)
Operating income $- $- $- $- $- $- $- $- $- $- $- $- $- $- $-
Consolidated:
Revenues and sales
Service revenues 7,374,279 1,897,402 1,885,405 1,825,894 1,765,578 7,156,067 1,806,026 1,836,059 1,797,520 1,716,462 6,428,942 1,734,481 1,691,248 1,524,322 1,478,891
Product sales 871,862 242,391 217,707 216,170 195,594 823,843 207,650 214,125 212,732 189,336 683,444 188,294 176,438 174,715 143,997
Total revenues and sales $8,246,141 $2,139,793 $2,103,112 $2,042,064 $1,961,172 $7,979,910 $2,013,676 $2,050,184 $2,010,252 $1,905,798 $7,112,386 $1,922,775 $1,867,686 $1,699,037 $1,622,888
Costs and expenses:
Cost of services 2,374,220 604,818 624,442 584,189 560,771 2,273,598 567,946 602,609 565,612 537,431 2,039,014 538,620 541,402 499,426 459,566
Cost of products sold 1,075,545 299,603 262,604 256,055 257,283 1,043,468 262,058 272,344 271,354 237,712 891,306 233,905 224,305 224,360 208,736
Selling, general, administrative
and other 1,524,165 402,489 373,624 372,859 375,193 1,498,122 388,290 376,285 372,458 361,089 1,297,034 363,616 336,633 310,425 286,360
Depreciation and amortization 1,299,691 332,520 324,678 321,151 321,342 1,247,748 321,330 312,183 310,712 303,523 1,095,469 304,298 285,908 257,766 247,497
Integration expenses, restructuring
and other charges 50,892 (873) - - 51,765 18,979 - - 18,979 - 69,883 (2,526) 20,539 9,022 42,848
Total costs and expenses 6,324,513 1,638,557 1,585,348 1,534,254 1,566,354 6,081,915 1,539,624 1,563,421 1,539,115 1,439,755 5,392,706 1,437,913 1,408,787 1,300,999 1,245,007
Operating income $1,921,628 $501,236 $517,764 $507,810 $394,818 $1,897,995 $474,052 $486,763 $471,137 $466,043 $1,719,680 $484,862 $458,899 $398,038 $377,881
OPERATING MARGIN (A):
Wireless 20.1% 19.6% 21.9% 20.9% 17.8% 21.1% 19.4% 21.8% 21.9% 21.3% 22.8% 22.0% 23.5% 22.4% 23.3%
Wireline 38.3% 38.8% 37.8% 38.4% 38.1% 36.3% 38.5% 34.3% 35.8% 36.6% 36.4% 36.8% 36.3% 34.3% 38.1%
Communications support services 6.8% 5.6% 5.1% 9.1% 7.5% 8.0% 7.1% 8.3% 8.6% 7.8% 9.1% 9.3% 9.4% 8.8% 8.8%
Consolidated 23.3% 23.4% 24.6% 24.9% 20.1% 23.8% 23.5% 23.7% 23.4% 24.5% 24.2% 25.2% 24.6% 23.4% 23.3%
SUPPLEMENTAL REVENUE INFORMATION:
Wireline:
Revenues and sales:
Local service $1,115,761 $276,456 $278,598 $280,782 $279,925 $1,136,820 $282,702 $283,959 $284,301 $285,858 $1,017,944 $285,656 $269,462 $231,711 $231,115
Network access and long-distance 1,047,894 260,812 263,549 262,816 260,717 1,055,497 271,503 260,280 261,533 262,181 943,514 261,763 249,808 214,532 217,411
Miscellaneous 256,154 70,507 60,789 66,034 58,824 243,762 61,579 60,956 60,410 60,817 218,303 60,396 56,418 50,963 50,526
Total revenues and sales $2,419,809 $607,775 $602,936 $609,632 $599,466 $2,436,079 $615,784 $605,195 $606,244 $608,856 $2,179,761 $607,815 $575,688 $497,206 $499,052
Communications support services:
Revenues and sales:
Long-distance and network
management services $304,870 $75,797 $77,188 $72,848 $79,037 $320,165 $78,003 $80,048 $81,083 $81,031 $316,236 $80,086 $81,822 $79,559 $74,769
Product distribution 421,253 117,018 109,268 95,907 99,060 407,397 106,235 107,253 100,790 93,119 371,255 94,292 102,061 93,982 80,920
Directory publishing 155,940 50,009 31,007 48,689 26,235 122,573 34,982 27,860 35,308 24,423 119,103 31,255 25,149 35,744 26,955
Telecommunications information
services 41,792 5,665 9,674 11,735 14,718 108,926 27,919 28,802 25,654 26,551 119,080 29,285 29,964 30,617 29,214
Total revenues and sales $923,855 $248,489 $227,137 $229,179 $219,050 $959,061 $247,139 $243,963 $242,835 $225,124 $925,674 $234,918 $238,996 $239,902 $211,858
(A) Operating margin is calculated by dividing segment income by the corresponding amount of segment revenues and sales.
During the fourth quarter of 2003, the Company changed the reporting classification of regulatory fees assessed to customers related to the Universal Service Fund from quot;selling, general, administrative and otherquot; to
quot;cost of servicesquot;. All prior period amounts were reclassified to conform with this new presentation.
8. ALLTEL Corporation
Earnings Per Share From Current Businesses (Non-GAAP)
for the quarterly periods in the years 2004, 2003 and 2002
2004 2003 2002
Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
(In thousands, except per share amounts)
Basic Earnings Per Share:
Net income applicable to common shares $1,038,007 $270,033 $284,000 $262,502 $221,472 $954,284 $239,967 $242,735 $243,988 $227,594 $916,831 $231,873 $241,188 $222,777 $220,993
Weighted average shares outstanding 307,288 302,809 306,843 308,188 311,486 311,784 312,413 311,978 311,423 311,219 310,982 311,133 311,022 310,973 310,798
Basic Earnings Per Share $3.38 $.89 $.93 $.85 $.71 $3.06 $.77 $.78 $.78 $.73 $2.95 $.75 $.78 $.72 $.71
Diluted Earnings Per Share:
Net income applicable to common shares $1,038,007 $270,033 $284,000 $262,502 $221,472 $954,284 $239,967 $242,735 $243,988 $227,594 $916,831 $231,873 $241,188 $222,777 $220,993
Adjust net income for preferred dividends 103 25 25 26 27 111 27 28 28 28 125 29 31 32 33
Net income applicable to common shares,
assuming conversion of preferred stock $1,038,110 $270,058 $284,025 $262,528 $221,499 $954,395 $239,994 $242,763 $244,016 $227,622 $916,956 $231,902 $241,219 $222,809 $221,026
Weighted average shares outstanding 307,288 302,809 306,843 308,188 311,486 311,784 312,413 311,978 311,423 311,219 310,982 311,133 311,022 310,973 310,798
Preferred shares 264 254 261 268 275 285 280 283 285 290 323 305 321 326 341
Stock options 787 1,032 737 626 697 698 572 688 723 793 1,023 806 677 1,062 1,471
Weighted average fully diluted shares 308,339 304,095 307,841 309,082 312,458 312,767 313,265 312,949 312,431 312,302 312,328 312,244 312,020 312,361 312,610
Diluted Earnings Per Share $3.37 $.89 $.92 $.85 $.71 $3.05 $.77 $.78 $.78 $.73 $2.94 $.74 $.77 $.71 $.71
Current businesses excludes the effect of discontinued operations, early termination of debt, integration expenses, restructuring and other charges, gain (loss) on disposal of assets, reversal of certain income tax contingency reserves,
write-down of investments and receivables, and net financing costs related to prefunding the Company's 2002 wireless and wireline acquisitions.
9. ALLTEL Corporation
Earnings Per Share Under GAAP
for the quarterly periods in the years 2004, 2003 and 2002
2004 2003 2002
Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
(In thousands, except per share amounts)
Basic Earnings Per Share:
Net income applicable to common shares $1,046,132 $270,620 $323,194 $262,502 $189,816 $1,330,008 $258,908 $242,735 $548,108 $280,257 $924,185 $256,544 $237,732 $216,136 $213,773
Weighted average shares outstanding 307,288 302,809 306,843 308,188 311,486 311,784 312,413 311,978 311,423 311,219 310,982 311,133 311,022 310,973 310,798
Basic Earnings Per Share $3.40 $.89 $1.05 $.85 $.61 $4.27 $.83 $.78 $1.76 $.90 $2.97 $.82 $.76 $.70 $.69
Diluted Earnings Per Share:
Net income applicable to common shares $1,046,132 $270,620 $323,194 $262,502 $189,816 $1,330,008 $258,908 $242,735 $548,108 $280,257 $924,185 $256,544 $237,732 $216,136 $213,773
Adjust net income for preferred dividends 103 25 25 26 27 111 27 28 28 28 125 29 31 32 33
Net income applicable to common shares,
assuming conversion of preferred stock $1,046,235 $270,645 $323,219 $262,528 $189,843 $1,330,119 $258,935 $242,763 $548,136 $280,285 $924,310 $256,573 $237,763 $216,168 $213,806
Weighted average shares outstanding 307,288 302,809 306,843 308,188 311,486 311,784 312,413 311,978 311,423 311,219 310,982 311,133 311,022 310,973 310,798
Preferred shares 264 254 261 268 275 285 280 283 285 290 323 305 321 326 341
Stock options 787 1,032 737 626 697 698 572 688 723 793 1,023 806 677 1,062 1,471
Weighted average fully diluted shares 308,339 304,095 307,841 309,082 312,458 312,767 313,265 312,949 312,431 312,302 312,328 312,244 312,020 312,361 312,610
Diluted Earnings Per Share $3.39 $.89 $1.05 $.85 $.61 $4.25 $.83 $.78 $1.75 $.90 $2.96 $.82 $.76 $.69 $.68
10. ALLTEL CORPORATION
SUPPLEMENTAL OPERATING INFORMATION
for the quarterly periods in the years 2004, 2003 and 2002
(Dollars in thousands, except per customer amounts)
2004 2003 2002
Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
Wireless:
Controlled POPs 62,313,192 62,313,192 61,313,088 61,313,088 61,313,088 60,368,281 60,368,281 60,368,281 60,163,350 60,018,544 59,008,262 59,008,262 59,392,626 51,107,009 51,107,009
Customers 8,626,487 8,626,487 8,394,727 8,336,473 8,181,166 8,023,425 8,023,425 7,928,051 7,872,260 7,760,849 7,601,598 7,601,598 7,558,929 6,843,411 6,763,214
Penetration rate 13.8% 13.8% 13.7% 13.6% 13.3% 13.3% 13.3% 13.1% 13.1% 12.9% 12.9% 12.9% 12.7% 13.4% 13.2%
Average customers 8,295,939 8,481,561 8,369,785 8,255,983 8,089,877 7,834,470 7,956,723 7,900,602 7,828,849 7,654,689 7,095,544 7,561,283 7,338,742 6,804,099 6,695,391
Gross customer additions:
Internal 2,720,339 690,811 641,994 650,149 737,385 2,709,369 696,888 699,675 655,682 657,124 2,404,180 675,230 601,227 558,887 568,836
Acquired, net of divested 92,345 92,345 - - - 147,462 - 6,129 30,413 110,920 752,784 (8,939) 761,723 - -
Total 2,812,684 783,156 641,994 650,149 737,385 2,856,831 696,888 705,804 686,095 768,044 3,156,964 666,291 1,362,950 558,887 568,836
Net customer additions:
Internal 510,717 139,415 58,254 155,307 157,741 274,365 95,374 49,662 80,998 48,331 279,703 51,608 67,648 80,197 80,250
Acquired, net of divested 92,345 92,345 - - - 147,462 - 6,129 30,413 110,920 752,784 (8,939) 761,723 - -
Prepaid customer unit adjustment - - - - - - - - - - (113,853) - (113,853) - -
Total 603,062 231,760 58,254 155,307 157,741 421,827 95,374 55,791 111,411 159,251 918,634 42,669 715,518 80,197 80,250
Customer acquisition costs:
Product sales $(209,874) $(50,530) $(55,235) $(51,787) $(52,322) $(176,429) $(45,486) $(48,135) $(42,876) $(39,932) $(118,059) $(35,776) $(30,277) $(28,745) $(23,261)
Cost of products sold 322,737 80,557 78,043 77,345 86,792 296,757 76,980 79,926 74,090 65,761 269,022 64,355 63,275 66,810 74,582
Selling and marketing expenses 743,889 198,572 181,505 177,939 185,873 714,026 190,854 181,797 180,165 161,210 579,333 156,626 153,139 141,138 128,430
Total $856,752 $228,599 $204,313 $203,497 $220,343 $834,354 $222,348 $213,588 $211,379 $187,039 $730,296 $185,205 $186,137 $179,203 $179,751
Cost to acquire a new customer (A) $315 $331 $318 $313 $299 $308 $319 $305 $322 $285 $304 $274 $310 $321 $316
Cash costs:
Product sales $(286,852) $(73,999) $(74,338) $(69,533) $(68,982) $(261,937) $(63,908) $(69,446) $(67,774) $(60,809) $(160,998) $(53,635) $(40,798) $(37,182) $(29,383)
Cost of services 1,543,576 399,114 406,660 382,060 355,742 1,367,812 350,603 361,107 339,730 316,372 1,246,168 329,004 335,667 305,393 276,104
Cost of products sold 573,646 154,747 139,301 135,048 144,550 536,648 131,243 141,712 141,246 122,447 430,550 114,672 102,499 103,624 109,755
Selling, general, administrative and other 1,201,789 318,968 294,070 293,009 295,742 1,154,961 303,033 292,999 287,085 271,844 957,983 269,728 249,578 231,851 206,826
Total 3,032,159 798,830 765,693 740,584 727,052 2,797,484 720,971 726,372 700,287 649,854 2,473,703 659,769 646,946 603,686 563,302
Less customer acquisition costs 856,752 228,599 204,313 203,497 220,343 834,354 222,348 213,588 211,379 187,039 730,296 185,205 186,137 179,203 179,751
Total $2,175,407 $570,231 $561,380 $537,087 $506,709 $1,963,130 $498,623 $512,784 $488,908 $462,815 $1,743,407 $474,564 $460,809 $424,483 $383,551
Cash cost per unit per month, excluding
customer acquisition costs (B) $21.85 $22.41 $22.36 $21.68 $20.88 $20.88 $20.89 $21.63 $20.82 $20.15 $20.48 $20.92 $20.93 $20.80 $19.10
Revenues:
Service revenues $4,791,235 $1,252,773 $1,239,409 $1,183,549 $1,115,504 $4,466,462 $1,128,024 $1,163,786 $1,127,642 $1,047,010 $3,999,206 $1,065,747 $1,053,170 $965,543 $914,746
Less wholesale revenues 372,446 94,748 103,356 91,673 82,669 387,471 91,584 107,879 100,560 87,448 346,233 97,572 105,152 76,785 66,724
Retail revenues $4,418,789 $1,158,025 $1,136,053 $1,091,876 $1,032,835 $4,078,991 $1,036,440 $1,055,907 $1,027,082 $959,562 $3,652,973 $968,175 $948,018 $888,758 $848,022
Average revenue per customer per month (C) $48.13 $49.24 $49.36 $47.79 $45.96 $47.51 $47.26 $49.10 $48.01 $45.59 $46.97 $46.98 $47.84 $47.30 $45.54
Retail revenue per customer per month (D) $44.39 $45.51 $45.24 $44.08 $42.56 $43.39 $43.42 $44.55 $43.73 $41.79 $42.90 $42.68 $43.06 $43.54 $42.22
Retail minutes of use per customer per month (E) 494 534 516 490 432 375 406 389 369 334 309 327 312 315 280
Postpay churn 1.74% 1.68% 1.80% 1.57% 1.93% 2.09% 1.96% 2.20% 2.03% 2.16% 2.23% 2.25% 2.18% 2.19% 2.31%
Total churn 2.23% 2.17% 2.33% 2.00% 2.40% 2.59% 2.53% 2.75% 2.45% 2.66% 2.50% 2.76% 2.42% 2.35% 2.44%
Service revenue operating margin (F) 21.3% 20.8% 23.2% 22.1% 18.9% 22.3% 20.5% 23.1% 23.2% 22.5% 23.8% 23.1% 24.4% 23.5% 24.1%
Capital expenditures (G) $797,106 $270,236 $200,337 $198,937 $127,596 $788,430 $223,242 $191,709 $218,927 $154,552 $766,395 $178,823 $219,425 $236,767 $131,380
(A) Cost to acquire a new customer is calculated by dividing the sum of the GAAP reported product sales, cost of products sold and sales and marketing expenses (included within quot;Selling, general, administrative and otherquot;),
as reported in the Consolidated Statements of Income, by the number of internal gross customer additions in the period. Customer acquisition costs exclude amounts related to the Company's customer retention efforts.
(B) Cash cost per unit per month, excluding customer acquisition costs, is calculated by dividing the sum of the GAAP reported product sales, cost of services, cost of products sold, selling, general, administrative and other
expenses as reported in the Consolidated Statements of Income, less customer acquisition costs, by the number of average customers for the period.
(C) Average revenue per customer per month is calculated by dividing wireless service revenues by average customers for the period.
(D) Retail revenues per customer per month is calculated by dividing wireless retail revenues (service revenues less wholesale revenues) by average customers for the period.
(E) Retail minutes of use per customer per month represents the average monthly minutes that ALLTEL's customers use on both the Company's network and while roaming on other carriers' networks.
(F) Service revenue operating margin is calculated by dividing wireless segment income by wireless service revenues. For the twelve months ended 12/31/02 and the three months ended 6/30/02, wireless segment income under
GAAP differed from wireless segment income from current businesses. Accordingly, service revenue operating margin calculated using wireless segment income under GAAP was 23.7% and 23.2%, respectively, for those
periods.
(G) Includes capitalized software development costs.
11. ALLTEL CORPORATION
SUPPLEMENTAL OPERATING INFORMATION
for the quarterly periods in the years 2004, 2003 and 2002
(Dollars in thousands, except per customer amounts)
2004 2003 2002
Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. Total 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
Wireline:
Customers 3,009,388 3,009,388 3,040,512 3,066,081 3,089,713 3,095,635 3,095,635 3,121,736 3,133,659 3,159,948 3,167,275 3,167,275 3,188,929 2,611,861 2,623,242
Average customers 3,061,529 3,024,635 3,052,548 3,079,609 3,092,255 3,136,777 3,108,589 3,128,070 3,149,414 3,162,287 2,852,190 3,177,437 2,996,441 2,618,084 2,620,470
DSL Customers 243,325 243,325 216,885 194,534 174,489 153,028 153,028 129,975 105,178 87,732 70,182 70,182 56,005 38,067 32,907
Average revenue per customer per month (H) $65.87 $66.98 $65.84 $65.99 $64.62 $64.72 $66.03 $64.49 $64.16 $64.18 $63.69 $63.76 $64.04 $63.30 $63.48
Capital expenditures (G) $336,498 $100,730 $80,659 $77,748 $77,361 $386,235 $115,964 $94,091 $93,686 $82,494 $404,998 $119,154 $109,342 $105,716 $70,786
Communications support services:
Long-distance customers 1,770,852 1,770,852 1,739,974 1,717,603 1,707,746 1,680,181 1,680,181 1,669,837 1,644,436 1,604,999 1,542,210 1,542,210 1,461,650 1,363,794 1,317,972
Capital expenditures (G) $15,150 $5,738 $4,500 $3,223 $1,689 $18,999 $3,738 $5,450 $5,992 $3,819 $36,635 $9,975 $11,447 $8,732 $6,481
Consolidated:
Capital expenditures (G) $1,157,729 $376,885 $285,520 $280,095 $215,229 $1,194,410 $343,281 $291,324 $318,505 $241,300 $1,213,178 $310,130 $341,140 $352,295 $209,613
Total assets $16,603,736 $16,603,736 $16,368,782 $16,462,064 $16,539,668 $16,661,138 $16,661,138 $16,451,661 $16,439,052 $16,208,717 $16,244,589 $16,244,589 $16,187,974 $15,456,684 $12,411,301
(G) Includes capitalized software development costs.
(H) Average revenue per customer per month is calculated by dividing total wireline revenues by average customers for the period.