UNITED STATES
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 (Date of earliest event reported) October 26, 1999
CenturyTel, Inc.
(Exact name of registrant as specified in its charter)
Louisiana 1-7784 72-0651161
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
100 Century Park Drive, Monroe, Louisiana 71203
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (318) 388-9000
Item 5. Other Events
The following press release was issued by CenturyTel,Inc. on October
26, 1999:
FOR IMMEDIATE RELEASE FOR MORE INFORMATION CONTACT:
October 26, 1999 Jeffrey S. Glover (318) 388-9648
jeff.glover@centurytel.com
CenturyTel Posts 17 Percent Rise in Third Quarter Net Income
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Monroe, LA. . . CenturyTel, Inc. (NYSE Symbol: CTL) announces operating results
for third quarter 1999.
o Revenues climbed 4.3% to $419.2 million (14.4% excluding the effect of
divestitures).
o Net income jumped 16.7% to $63.8 million (20.6% excluding the effect of
divestitures).
o Diluted earnings per share rose 15.4% to $.45 (18.4% excluding the effect of
divestitures).
o Earnings before interest, taxes, depreciation, amortization and gain on sales
of assets, advanced 2.9% to $222.8 million (12.2% excluding the effect of
divestitures).
Third Quarter Highlights
(In thousands, except per share amounts)
Quarter Ended Quarter Ended
9/30/99 9/30/98 %Change
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Revenues $ 419,205 $ 401,949 4.3%
EBITDA (1) $ 222,808 $ 216,496 2.9%
Net Income (2) $ 63,788 $ 54,678 16.7%
Diluted Earnings Per
Share (2)(3) $ .45 $ .39 15.4%
Average Diluted Shares
Outstanding (3) 141,504 140,322 .8%
Telephone Revenues $ 277,352 $ 275,397 .7%
Wireless Revenues $ 111,652 $ 106,664 4.7%
Other Operations Revenues $ 30,201 $ 19,888 51.9%
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Telephone Access Lines 1,263,036 1,251,735 .9%
Wireless Units in
Majority-Owned Markets 650,899 591,645 10.0%
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(1) Earnings before interest, taxes, depreciation, amortization and gain on
sales of assets
(2) Excludes after-tax gain on asset sales of $741,000, or $.005 per share,
in third quarter 1999
(3) Reflects a three-for-two stock split effected as a stock dividend
distributed March 31, 1999
"CenturyTel's strong financial performance continued in the third quarter,"
Glen F. Post, III, President and Chief Executive Officer, said. "The second
quarter sale of certain non-strategic assets including telephone operations in
Alaska and cellular properties in South Texas adversely affected prior period
comparisons. Revenue growth in our core operations was 14.4% excluding these
divestitures. In recent months, CenturyTel has announced the pending acquisition
of nearly half a million telephone access lines which, along with CenturyTel's
other growth initiatives, will more than offset the effect of these
divestitures."
Net income for the quarter, excluding gain on sales of assets, climbed
16.7% to $63.8 million from $54.7 million in third quarter 1998. Diluted
earnings per share increased 15.4% to $.45 from $.39. Consolidated revenues rose
4.3% to $419.2 million from $401.9 million. Earnings before interest, taxes,
depreciation, amortization and gain on sales of assets (EBITDA) grew to $222.8
million from $216.5 million, a 2.9% increase.
Third Quarter Highlights,
excluding the effect of asset divestitures
(In thousands, except per share amounts)
Quarter Ended Quarter Ended
9/30/99 9/30/98 % Change
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Revenues $ 419,205 $ 366,524 14.4%
EBITDA (1) $ 222,808 $ 198,496 12.2%
Net Income (2) $ 63,788 $ 52,875 20.6%
Diluted Earnings Per
Share (2)(3) $ .45 $ .38 18.4%
Average Diluted Shares
Outstanding (3) 141,504 140,322 .8%
Telephone Revenues $ 277,352 $ 243,664 13.8%
Wireless Revenues $ 111,652 $ 102,972 8.4%
Other Operations Revenues $ 30,201 $ 19,888 51.9%
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Telephone Access Lines 1,263,036 1,121,683 12.6%
Wireless Units in
Majority-Owned Markets 650,899 582,069 11.8%
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(1) Earnings before interest, taxes, depreciation, amortization and gain on
sales of assets
(2) Excludes after-tax gain on asset sales of $741,000, or $.005 per share,
in third quarter 1999
(3) Reflects a three-for-two stock split effected as a stock dividend
distributed March 31, 1999
Net income for the quarter, excluding the effect of asset divestitures and
gain on sales of assets, climbed 20.6% to $63.8 million from $52.9 million in
third quarter 1998. Diluted earnings per share, excluding the effect of asset
divestitures and gains, increased 18.4% to $.45 from $.38. Consolidated revenues
excluding divestitures rose 14.4% to $419.2 million from $366.5 million.
Excluding divestitures, EBITDA grew to $222.8 million from $198.5 million, a
12.2% increase. CenturyTel achieved a consolidated EBITDA margin of 53.2% during
the quarter.
"We achieved strong internal revenue growth in our core operations this
quarter," Post said. "CenturyTel's telephone operations produced internal
revenue growth of nearly 9% while other operations, driven primarily by long
distance, posted internal revenue growth of approximately 52%. Wireless customer
growth exceeded prior year levels, and our long distance customer base grew 10%
during the quarter as CenturyTel added 25,600 long distance customers."
Telephone revenues, excluding the effect of asset divestitures, grew 13.8%
to $277.4 million during the quarter, compared with $243.7 million in third
quarter 1998. A prior-year acquisition contributed $11.6 million to telephone
revenues during the quarter. Telephone operating income excluding divestitures
increased 3.2%, reaching $81.9 million from $79.3 million, and EBITDA excluding
divestitures rose 7.9% to $148.2 million from $137.4 million a year ago.
CenturyTel's third quarter telephone EBITDA margin was 53.5% while the operating
income margin was 29.5%. An increase in Y2K expenses of $3.3 million negatively
affected margins for the quarter. Internal access line growth was a strong 5.3%
in the quarter.
"CenturyTel's Internet revenues increased by 55% from third quarter last
year," Post said. "During the quarter we deployed the new G-lite DSL standard,
and CenturyTel is on track to address 10% of our customer base with this
high-speed data service before year end."
Wireless revenues, excluding the effect of asset divestitures, grew 8.4% to
$111.7 million in third quarter 1999, compared with $103.0 million in third
quarter 1998. Wireless operating income excluding divestitures advanced 13.8%,
reaching $40.7 million from $35.8 million, and EBITDA excluding divestitures
climbed 14.9% to $57.9 million from $50.4 million a year ago. CenturyTel's third
quarter wireless EBITDA margin was 51.8% (52.9% based on service revenues), and
operating income margin was 36.5% (37.2% based on service revenues). Average
monthly cellular service revenue per user (ARPU) was $56.57 during third quarter
1999, a 4.7% decrease from $59.39 a year ago. The average monthly churn rate was
1.9%.
"CenturyTel's average monthly churn declined nearly half a percentage point
to 1.9% during the quarter as compared with prior year levels," Post said.
Revenues from other operations, excluding asset divestitures, grew 51.9% to
$30.2 million during third quarter 1999, compared with $19.9 million in third
quarter 1998. CenturyTel's long distance business generated $9.3 million of the
increase in other operations revenues. CenturyTel now serves more than 285,500
long distance customers, adding more than 25,600 during the quarter.
During the first nine months of 1999, net income excluding gain on sales of
assets climbed 22.8% to $179.4 million from $146.0 million in 1998. Diluted
earnings per share increased 21.0% to $1.27 from $1.05, and consolidated
revenues rose 7.6% to $1.3 billion from $1.2 billion. EBITDA grew to $674.6
million from $619.4 million, an 8.9% increase.
In addition to historical information, this release includes certain
forward-looking statements that are subject to uncertainties that could cause
the Company's actual results to differ materially from such statements. Such
uncertainties include but are not limited to: the effects of ongoing
deregulation in the telecommunications industry; the effects of greater than
anticipated competition in the Company's markets; possible changes in the demand
for the Company's products and services; the Company's ability to successfully
introduce new offerings on a timely and cost-effective basis; the risks inherent
in rapid technological change; the Company's ability to effectively manage its
growth, including the timely consummation of pending acquisitions, and
integrating newly-acquired properties into the Company's operations; the success
and expense of the remediation efforts of the Company and its vendors in
achieving year 2000 compliance; and the effects of more general factors such as
changes in overall market or economic conditions or in legislation, regulation
or public policy. These and other uncertainties related to the Company's
business are described in greater detail in the Company's Annual Report on Form
10-K for the year ended December 31, 1998.
CenturyTel, Inc. provides integrated communications services including
local exchange, wireless, long distance, Internet access and security monitoring
services to more than two million customers in 21 states. The company,
headquartered in Monroe, Louisiana, is publicly traded on the New York Stock
Exchange under the symbol CTL. CenturyTel is the 8th largest local exchange
telephone company, based on access lines, and the 10th largest cellular company,
based on population equivalents owned, in the United States. Visit CenturyTel's
corporate website at (www.centurytel.com).
CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(UNAUDITED)
INCREASE
1999 1998 (DECREASE)
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In thousands, except per share amounts
TELEPHONE OPERATIONS
Operating revenues
Local service $ 86,010 84,082 2.3%
Network access 159,682 159,422 0.2%
Other 31,660 31,893 (0.7%)
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277,352 275,397 0.7%
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Operating expenses
Plant operations 66,446 62,402 6.5%
Customer operations 22,073 22,107 (0.2%)
Corporate and other 40,584 37,436 8.4%
Depreciation and amortization 66,397 65,242 1.8%
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195,500 187,187 4.4%
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Telephone operating income 81,852 88,210 (7.2%)
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WIRELESS OPERATIONS
Operating revenues
Service revenues 109,318 104,529 4.6%
Equipment sales 2,334 2,135 9.3%
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111,652 106,664 4.7%
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Operating expenses
Cost of equipment sold 4,200 3,784 11.0%
System operations 13,864 15,359 (9.7%)
General, administrative and
customer service 22,128 22,115 0.1%
Sales and marketing 13,588 13,585 -
Depreciation and amortization 17,167 15,558 10.3%
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70,947 70,401 0.8%
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Wireless operating income 40,705 36,263 12.2%
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OTHER OPERATIONS
Operating revenues 30,201 19,888 51.9%
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Operating expenses
Cost of sales and other 21,963 15,367 42.9%
Depreciation and amortization 736 810 (9.1%)
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22,699 16,177 40.3%
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Other operating income 7,502 3,711 102.2%
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TOTAL OPERATING INCOME 130,059 128,184 1.5%
OTHER INCOME (EXPENSE)
Interest expense (34,997) (41,904) (16.5%)
Income from unconsolidated
cellular entities 10,801 9,162 17.9%
Minority interest (3,460) (3,619) (4.4%)
Gain on sales of assets 1,201 - -
Other income and expense 1,108 1,159 (4.4%)
Income tax expense (40,183) (38,304) 4.9%
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NET INCOME $ 64,529 54,678 18.0%
===============================================================
EARNINGS PER SHARE (1)
Basic $ 0.46 0.40 15.0%
Diluted (2) $ 0.46 0.39 17.9%
SHARES OUTSTANDING (1)
Basic 139,085 137,207 1.4%
Diluted 141,504 140,322 0.8%
DIVIDENDS PER COMMON SHARE (1) $ 0.0450 0.0433 3.9%
- ------------------
(1) Reflects a three-for-two stock split effected as a stock dividend
distributed March 31, 1999
(2) Excluding the effect of asset sales, diluted earnings per share were
$.45 for 1999
- ------------------
CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(UNAUDITED)
INCREASE
1999 1998 (DECREASE)
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In thousands, except per share amounts
TELEPHONE OPERATIONS
Operating revenues
Local service $ 266,119 243,664 9.2%
Network access 482,626 462,576 4.3%
Other 100,681 94,292 6.8%
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849,426 800,532 6.1%
- ---------------------------------------------------------------
Operating expenses
Plant operations 196,960 176,609 11.5%
Customer operations 67,968 67,956 -
Corporate and other 116,419 116,444 -
Depreciation and amortization 207,163 194,516 6.5%
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588,510 555,525 5.9%
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Telephone operating income 260,916 245,007 6.5%
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WIRELESS OPERATIONS
Operating revenues
Service revenues 312,873 299,396 4.5%
Equipment sales 7,372 6,308 16.9%
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320,245 305,704 4.8%
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Operating expenses
Cost of equipment sold 13,848 11,211 23.5%
System operations 42,394 44,285 (4.3%)
General, administrative
and customer service 60,113 60,785 (1.1%)
Sales and marketing 41,130 41,018 0.3%
Depreciation and amortization 50,963 45,274 12.6%
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208,448 202,573 2.9%
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Wireless operating income 111,797 103,131 8.4%
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OTHER OPERATIONS
Operating revenues 80,540 55,811 44.3%
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Operating expenses
Cost of sales and other 59,779 41,647 43.5%
Depreciation and amortization 2,167 2,498 (13.3%)
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61,946 44,145 40.3%
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Other operating income 18,594 11,666 59.4%
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TOTAL OPERATING INCOME 391,307 359,804 8.8%
OTHER INCOME (EXPENSE)
Interest expense (114,725) (126,785) (9.5%)
Income from unconsolidated
cellular entities 26,913 25,105 7.2%
Minority interest (25,560) (10,264) 149.0%
Gain on sales of assets 51,160 49,859 2.6%
Other income and expense 6,722 2,454 173.9%
Income tax expense (156,721) (123,610) 26.8%
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NET INCOME $ 179,096 176,563 1.4%
===============================================================
EARNINGS PER SHARE (1)
Basic (2) $ 1.29 1.29 -
Diluted (3) $ 1.27 1.26 0.8%
SHARES OUTSTANDING (1)
Basic 138,668 136,857 1.3%
Diluted 141,331 139,908 1.0%
DIVIDENDS PER COMMON SHARE (1) $ 0.1350 0.1299 3.9%
- -----------------------
(1) Reflects a three-for-two stock split effected as a stock dividend
distributed March 31, 1999
(2) Excluding the effect of asset sales, basic earnings per share were $1.29
and $1.06 for 1999 and 1998, respectively
(3) Excluding the effect of asset sales, diluted earnings per share were
$1.27 and $1.05 for 1999 and 1998, respectively
- ----------------------
CenturyTel, Inc.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
(UNAUDITED)
September 30, December 31,
1999 1998
- ----------------------------------------------------------------------
(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 37,233 5,742
Other current assets 248,079 220,496
- ----------------------------------------------------------------------
Total current assets 285,312 226,238
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PROPERTY, PLANT AND EQUIPMENT
Telephone 3,366,882 3,660,252
Wireless 458,197 436,897
Other 238,418 192,509
Accumulated depreciation (1,868,553) (1,938,205)
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Net property, plant and equipment 2,194,944 2,351,453
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INVESTMENTS AND OTHER ASSETS
Excess cost of net assets acquired 1,629,636 1,956,701
Other 431,264 401,063
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Total investments and other assets 2,060,900 2,357,764
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TOTAL ASSETS $ 4,541,156 4,935,455
======================================================================
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 53,306 53,010
Other current liabilities 263,134 251,834
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Total current liabilities 316,440 304,844
LONG-TERM DEBT 2,042,235 2,558,000
DEFERRED CREDITS AND OTHER LIABILITIES 468,241 541,129
STOCKHOLDERS' EQUITY 1,714,240 1,531,482
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TOTAL LIABILITIES AND EQUITY $ 4,541,156 4,935,455
======================================================================
CAPITAL EXPENDITURES
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
INC
1999 1998 (DEC)
- ------------------------------------------------------------------------------
Telephone $ 145,178 141,963 2.3%
Wireless 44,262 42,836 3.3%
Corporate and other 47,558 24,230 96.3%
- ----------------------------------------------------------------------
Total capital expenditures $ 236,998 209,029 13.4%
======================================================================
CAPITAL EXPENDITURES
THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
INC
1999 1998 (DEC)
- ------------------------------------------------------------------------------
Telephone $ 58,554 63,908 (8.4%)
Wireless 11,071 8,536 29.7%
Corporate and other 18,245 10,165 79.5%
- ----------------------------------------------------------------------
Total capital expenditures $ 87,870 82,609 6.4%
======================================================================
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.
CenturyTel, Inc.
By: /s/ Neil A. Sweasy
-------------------------
Neil A. Sweasy
Vice President and Controller