Highlights of 3rd Quarter Earnings for News Media
Cox Communications Inc. Third Quarter 2004 Earnings Highlights:

Revenue Generating Units (RGU) Highlights:

  • Ended the quarter with approximately 6.3 million basic video customers, up 0.4% from September 30, 2003.
  • Ended the quarter with over 6.6 million total customer relationships, up 1.4% from September 30, 2003.
  • Ended the quarter with approximately 12.3 million total RGUs, up 11% from September 30, 2003.
  • Added 72,868 Cox Digital Cable customers, ending the quarter with approximately 2.4 million digital cable customers, representing year-over-year customer growth of 14%. Cox Digital Cable is now available to 99% of the homes in Cox's service areas with 37% penetration of Cox's basic video customer base.
  • Added 184,446 Cox High Speed Internet customers, the most Internet customers ever added in a quarter. Cox ended the quarter with over 2.4 million Cox High Speed Internet customers, representing year-over-year growth of 32%.
  • Added 82,596 Cox Digital Telephone customers, the most Cox Digital Telephone customers ever added in a quarter. Cox ended the quarter with over 1.2 million telephone customers, representing year-over-year growth of 33%.
  • Ended the quarter with approximately 2.6 million bundled customers, representing 42% of Cox's basic video customer base.

Financial Highlights:

  • For the quarter, Cox posted total revenue growth of 11% and operating cash flow growth of 8%. (Operating income before depreciation and amortization and gains or losses on the sale of cable systems.) Excluding the impact of the litigation and hurricanes discussed in Cox's earnings report under "Recent Events," Cox would have generated 12% operating cash flow growth during the quarter ended September 30, 2004, compared with the same periods in 2003.
  • For the quarter, commercial revenues from Cox Business Services increased 24%.
  • Advertising revenue from Cox Media grew 8% in the third quarter.
  • Generated $566.3 million in cash flows provided by operating activities and $175.4 million in free cash flow (cash flows provided by operating activities less capital expenditures).
  • Generated 14% operating income growth (operating income before depreciation and amortization and gains or losses on the sale of cable systems) during the quarter ended September 30, 2004.

2004 Outlook:

  • For 2004, Cox expects revenue to increase by 11.5% to 12.5% over 2003, consistent with previously stated guidance.
  • Operating cash flow is expected to increase by 14% to 15% over 2003.*

*Operating cash flow growth will be at the low end of the previously stated range of 14% to 15% as a result of the costs associated with the Florida hurricanes and the accrual related to the adverse verdict, each described in "Recent Events" section of Cox's earnings report. Without the occurrence of these two events, Cox would expect to end the year at the high end of the 14% to 15% operating cash flow growth range.

  • Capital expenditures for 2004 are expected to be approximately $1.4 billion.
  • Basic video customer growth over 2003 has been reduced to approximately 0.3% from the previously stated guidance of just under 1.0% growth.
     
  • Advanced-service RGU net additions are expected to be between 1.1 and 1.2 million, an increase in previously stated guidance of 1.0 to 1.1 million.
  • Cox expects to be free cash flow positive for the full year 2004.

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