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Wednesday, April 5, 2000

boosted ’99
net 33%

Revenues, however, were up
just 1 percent over the previous year

By Russ Lynch


GTE Hawaiian Tel had a 33 percent increase in profit last year but most of it came from cuts in expenses rather than from income in its day-to-day operations.

GTE Hawaiian Tel In its annual filing with the Securities & Exchange Commission, the company reported a net of $96.8 million for 1999, up from $72.9 million in 1998.

Early last year, 75 employees took advantage of a lump-sum pension payout offer and left the company in an early-retirement plan.

GTE Hawaiian Tel had initial costs of about $7 million related to the program but saved big money later in pension contributions, cutting costs by $19 million in the second quarter, according to the SEC filing, which was released today.

The company does not report fourth-quarter earnings. It also does not show per-share figures since all its shares are owned by Irving, Texas-based GTE Corp.

Total revenues were up only 1 percent at $679.1 million for last year, compared with $671.3 million in 1998.

"We had nominal revenue growth, which is reflective of the competition in Hawaii," said Jill Hayami, GTE Hawaiian Tel's manager of business analysis. The company did benefit from decreased pension costs because of the employee departures, she said today.

Art The revenue breakdown in the SEC filing shows a continuation of the changes in telecommunications that have altered the company's figures in recent years.

Local services, mainly the traditional local telephone business, produced revenues of $279.5 million in 1999, up 1 percent from $277 million in 1998. Customers continued to spend more on such extras as call-waiting and the company's SmartCall services, which brought in $2.9 million in additional revenues last year. That increase was partially offset by a drop of $1.5 million in private-line revenues.

The Internet and other network systems moving large amounts of data, which demand high bandwidth capacity, played their part in boosting revenues in the "network access services" category. Revenues from such "special access" services were up $8.7 million, boosting network access revenues to $178.8 million, up 1 percent from $177.4 million in 1998.

The network access services category also includes fees charged to long-distance providers for access to the Hawaiian Tel local system and access fees charged to cellular telephone companies.

Much of the improvement in the network access category was wiped out by a $14.4 million revenue drop caused by regulatory orders to cut interstate and intrastate access fees.

The company's third category, "other services and sales," had a 2 percent increase in revenues, to $220.8 million last year from $216.9 million in the previous year. Much of the increase came from a gain in rent received for equipment and properties and from directory advertising.

However, the changing telecommunications environment had a negative impact too, as interisland toll-call revenues dipped by $4.5 million because of increased competition. The company's costs and expenses were $495 million, a drop of 5 percent from from $523.7 million in 1998.

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