Filed Pursuant to Rule 424(b)(2)
Registration No. 33-52915
PROSPECTUS SUPPLEMENT
(To Prospectus dated April 11, 1994)
$150,000,000
Century Telephone Enterprises, Inc.
$50,000,000 7 3/4% Senior Notes, Series A, Due 2004
$100,000,000 8 1/4% Senior Notes, Series B, Due 2024
______________
Interest Payable May 1 and November 1
______________
Interest on Century's 7 3/4% Senior Notes, Series A, Due 2004 (the "Series
A Notes") and its 8 1/4% Senior Notes, Series B, Due 2024 (the "Series B
Notes") (collectively, the "Senior Notes") is payable semi-annually on May 1
and November 1, commencing November 1, 1994. The Series A Notes will not be
redeemable prior to maturity. The Series B Notes will be subject to
redemption at any time on or after May 1, 2004, at Century's option, in
whole or in part, at the redemption prices set forth herein, together with
accrued and unpaid interest through the redemption date.
_____________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Underwriting
Price to Discounts and Proceeds to
Public<FN1> Commissions<FN2> Century<FN1><FN3>
Per Series A Note 99.949% .650% 99.299%
Per Series B Note 98.989% .875% 98.114%
Total $148,963,500 $1,200,000 $147,763,500
<FN1> Plus accrued interest, if any, from May 1, 1994.
<FN2> See "Underwriting."
<FN3> Before deducting expenses estimated at $230,000, which are
payable by Century.
______________
The Senior Notes are offered by the Underwriters, subject to prior sale,
when, as and if delivered to and accepted by the Underwriters, and subject to
their right to reject orders in whole or in part. It is expected that
delivery of the Senior Notes will be made in New York City on or about May
6, 1994.
______________
Paine Webber Incorporated
Stephens Inc.
Goldman, Sachs & Co.
Merrill Lynch & Co.
______________
The date of this Prospectus Supplement is April 29, 1994.
S-1
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SENIOR
NOTES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
S-2
SELECTED QUARTERLY FINANCIAL AND OPERATING DATA
(In thousands, except per share and ratio
data, access lines and cellular units in service)
On April 22, 1994, Century announced its consolidated operating results
for the quarter ended March 31, 1994, which are summarized below. For further
financial information as of and for the quarter ended March 31, 1994, see
Century's Current Report on Form 8-K dated April 22, 1994 incorporated by
reference herein, and for further historical financial information regarding
the Company, see the accompanying Prospectus.
Three Months Ended
March 31,
_________________________
1993 1994
__________ __________
Income Statement Date:
Revenues:
Telephone............................. $ 78,951 $ 91,770
Mobile Communications................. 17,874 29,210
__________ __________
96,825 120,980
__________ __________
Cost of sales and operating expenses:
Telephone............................. 38,254 43,825
Mobile Communications................. 13,102 19,836
__________ __________
51,356 63,661
__________ __________
Depreciation and amortization:
Telephone.............................. 14,897 17,055
Mobile Communications.................. 2,305 4,378
__________ __________
17,202 21,433
__________ __________
Operating income:
Telephone.............................. 25,800 30,890
Mobile Communications.................. 2,467 4,996
__________ __________
28,267 35,886
__________ __________
Other income (expense):
Interest expense........................ (6,912) (8,502)
Earnings from unconsolidated
cellular partnerships................. 372 2,564
Gain on sale of asset................... 1,661 --
Other income, net....................... 947 191
Income taxes............................... (8,595) (10,938)
__________ __________
Net income................................. $ 15,740 $ 19,201
========== ==========
Earnings per share:
Primary................................. $ .32 $ .36
Fully diluted........................... .31 .35
Ratio of earnings to fixed charges<FN1>.... 4.51 4.34
March 31,
_________________________
1993 1994
__________ __________
Operating Data:
Telephone access lines..................... 400,896 441,289
Cellular units in service in
majority-owned and operated markets...... 81,201 160,283
Cellular pops.............................. 5,496 7,126
March 31,
1994
____________
Balance Sheet Data:
Net property, plant and equipment.......... $ 871,205
Excess cost of net assets acquired, net.... 440,209
Total assets............................... 1,518,599
Short-term debt............................ 184,463
Long-term debt, excluding current
maturities............................... 489,971
Stockholders' equity....................... $ 579,398
____________________________
<FN1> Calculated in the manner described in the accompanying prospectus.
S-3
USE OF PROCEEDS
The net proceeds to Century from the sale of the Senior Notes are
estimated to be approximately $147.5 million. Of these proceeds, approximately
$90 million will be used to discharge Century's indebtedness under a bridge
loan maturing in September 1994 that bears interest at a rate of .375% per
annum over the annual interest rate payable with respect to 30-day U.S. dollar
deposits in London's eurodollar interbank market, and which was incurred by
Century in February 1994 to fund substantially all of its cash requirements in
connection with acquiring Celutel, Inc. ("Celutel") and prepaying Celutel's
long-term debt. The remaining net proceeds will be used to reduce Century's
short-term bank indebtedness under various credit facilities, which bear
interest at rates ranging from 4.0% to 4.6% and have original maturities
ranging up to 90 days.
CAPITALIZATION
The following table sets forth the capitalization of the Company at
March 31, 1994, and as adjusted to reflect the issuance of the Senior Notes
and the application of the net proceeds therefrom as described above.
<TABLE>
<CAPTION>
March 31, 1994
________________________
Actual As Adjusted
__________ ___________
(In thousands)
<S> <C> <C>
Short-term debt:
Current maturities of long-term debt.................. $ 15,263 $ 15,263
Notes payable to banks................................ 169,200 21,667
__________ _________
Total short-term debt.............................. 184,463 36,930
__________ _________
Long-term debt, excluding current maturities:
Century............................................... 190,869 340,869
Subsidiaries.......................................... 299,102 299,102
__________ _________
Total long-term debt, excluding
current maturities............................... 489,971 639,971
__________ _________
Stockholders' equity:
Common Stock, $1.00 par value, 100,000,000 shares
authorized, and 53,353,033 shares issued and
outstanding......................................... 53,353 53,353
Paid-in capital....................................... 313,617 313,617
Retained earnings..................................... 223,879 223,879
Employee Stock Ownership Plan commitment.............. (13,780) (13,780)
Preferred Stock - non-redeemable...................... 2,329 2,329
__________ _________
Total stockholders' equity......................... 579,398 579,398
__________ _________
Total capitalization............................... $ 1,253,832 $1,256,299
========== =========
</TABLE>
SUPPLEMENTAL DESCRIPTION OF SENIOR NOTES
The Series A Notes and Series B Notes offered hereby each constitute a
single series of Senior Debt Securities described in the accompanying
Prospectus and will be issued under the Indenture referred to therein. The
following description of the specific terms of the Senior Notes supplements
and should be read in conjunction with the description of the general terms
and provisions of the Senior Debt Securities set forth in the accompanying
Prospectus under the caption "Description of Senior Debt Securities." The
following description does not purport to be complete and is qualified in its
entirety by reference to the accompanying Prospectus and the Indenture.
Unless otherwise indicated, each capitalized term not otherwise defined herein
has the meaning ascribed to it in the accompanying Prospectus or in the
Indenture.
Principal Amount, Maturity and Interest
The Series A Notes and Series B Notes will be limited to aggregate
principal amounts of $50,000,000 and $100,000,000, respectively. The Series A
Notes will mature on May 1, 2004 and the Series B Notes will mature on May
1, 2024. Interest on the Senior Notes will be payable semi-annually on May
1 and November 1, commencing November 1, 1994, to the persons in whose names
the Senior Notes are registered at the close of business on the preceding
April 15 and October 15, respectively, subject to certain exceptions provided
for in the Indenture (Board Resolution; Section 2.03). Unless otherwise
determined by Century, interest will be paid by check mailed on or before the
payment date, by first class mail, to such persons.
S-4
Redemption
The Series A Notes will not be redeemable prior to maturity (Board
Resolution).
The Series B Notes will be subject to redemption at any time on or after
May 1, 2004, at Century's option, in whole or in part, on not less than 30
nor more than 60 days' prior notice in amounts of $1,000 or integral multiples
thereof at the following redemption prices (expressed as percentages of the
principal amount), if redeemed during the 12-month period beginning May 1
of the years indicated below:
Redemption Redemption
Year Price Year Price
____ __________ ____ __________
2004...... 103.620% 2009...... 101.810%
2005...... 103.258 2010...... 101.448
2006...... 102.896 2011...... 101.086
2007...... 102.534 2012...... 100.724
2008...... 102.172 2013...... 100.362
and thereafter at 100% of the principal amount, together, in each case, with
accrued and unpaid interest through the redemption date (subject to the right
of holders of record on the regular record date to receive interest due on an
interest payment date) (Board Resolution; Section 3.03).
There will be no mandatory sinking fund payments for the Senior Notes
(Board Resolution).
S-5
UNDERWRITING
The Underwriters named below have entered into an Underwriting Agreement
with Century whereby they have severally agreed to purchase from Century, and
Century has agreed to sell, the respective principal amounts of the Senior
Notes indicated below, subject to the terms and conditions of the Underwriting
Agreement, a form of which has been filed as an exhibit to the Registration
Statement.
Principal Principal
Amount of Amount of
Underwriters Series A Notes Series B Notes
____________ ______________ ______________
Paine Webber Incorporated................ $ 12,500,000 $ 25,000,000
Stephens Inc............................. 12,500,000 25,000,000
Goldman, Sachs & Co...................... 12,500,000 25,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................. 12,500,000 25,000,000
_____________ _____________
Total.................................. $ 50,000,000 $ 100,000,000
============= =============
The Senior Notes are offered subject to prior sale, when, as and if
issued by Century and accepted by the Underwriters, at the initial public
offering prices set forth on the cover page of this Prospectus Supplement and
to certain dealers at such prices less a concession not exceeding .40% of the
principal amount of the Series A Notes and .50% of the principal amount
of the Series B Notes. Underwriters and dealers may reallow to other dealers
a concession not exceeding .25% of the principal amount of the Series A
Notes and .25% of the principal amount of the Series B Notes. After the
initial public offering, the public offering prices and concessions to dealers
may be changed. Under the terms and conditions of the Underwriting Agreement,
the Underwriters are committed to purchase all of the Senior Notes if any are
purchased.
Century has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
Century has been advised that the Underwriters presently intend to make
a market in the Senior Notes, although they will not be obligated to do so and
may discontinue any market making at any time without notice. There can be no
assurance that an active public market for the Senior Notes will develop or be
maintained.
Ernest Butler, Jr., an Executive Vice President of Stephens Inc., is a
director of Century.
LEGAL MATTERS
Certain legal matters related to the offering of the Senior Notes will
be passed upon on behalf of the Underwriters by Winthrop, Stimson, Putnam &
Roberts, New York, New York.
S-6
Century Telephone Enterprises, Inc.
Senior Debt Securities
______________________
Century Telephone Enterprises, Inc. ("Century") may from
time to time offer hereunder senior unsecured debt securities
(the "Senior Debt Securities") with an aggregate initial public
offering price not to exceed $400,000,000. The Senior Debt
Securities may be offered as separate series in amounts, at
prices and on terms to be determined at the time of sale and
set forth in an accompanying supplement to this Prospectus (a
"Prospectus Supplement"). The specific designation, aggregate
principal amount, net proceeds, offering price, maturity,
interest rate, interest payment dates, terms of any redemption
or sinking fund provisions and any other specific terms
relating to any series of Senior Debt Securities offered
hereunder will be set forth in the Prospectus Supplement
relating to that series. The Senior Debt Securities will rank
equally with all other unsubordinated and unsecured
indebtedness of Century. See "Description of Senior Debt
Securities."
Century may sell the Senior Debt Securities directly or
through agents, underwriters or dealers designated from time to
time by Century. If any agents, underwriters or dealers are
involved in the sale of any series of Senior Debt Securities,
the names of such agents, underwriters or dealers and any
applicable commissions and discounts will be set forth in the
Prospectus Supplement relating to that series. See "Plan of
Distribution."
_____________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
_____________________
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF
SENIOR DEBT SECURITIES UNLESS ACCOMPANIED BY A PROSPECTUS
SUPPLEMENT.
_____________________
The date of this Prospectus is April 11, 1994.
AVAILABLE INFORMATION
Century is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and in accordance therewith files reports, proxy statements and
other documents with the Securities and Exchange Commission (the
"Commission"). Documents filed by Century with the Commission
pursuant to the informational requirements of the Exchange Act
may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street,
N.W., Washington, DC 20549, and at the regional offices of the
Commission at the following locations: New York Regional Office,
7 World Trade Center, 13th Floor, New York, New York 10048 and
Chicago Regional Office, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60621-2511. Copies of such material may be
obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, DC 20549, at prescribed
rates. Century's common stock is listed on the New York Stock
Exchange and its reports, proxy statements and other information
may also be inspected at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005. In
addition to the information contained in this Prospectus, further
information regarding Century and the Senior Debt Securities is
contained in the registration statement on Form S-3 (the
"Registration Statement") filed with the Commission under the
Securities Act of 1933, as amended (the "Securities Act"), which
may be inspected and copied at the Commission's offices listed
above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by Century
with the Commission pursuant to the Exchange Act, are
incorporated herein by reference:
(a) Century's Annual Report on Form 10-K for the fiscal year
ended December 31, 1993.
(b) Century's Current Reports on Form 8-K dated January 13,
1994, and February 10, 1994.
All reports filed by Century with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent
to the date of this Prospectus and prior to the termination of
the offering made hereby shall be deemed to be incorporated by
reference herein and to be made a part hereof from their
respective dates of filing. Information appearing herein or in
any particular document incorporated herein by reference is not
necessarily complete and is qualified in its entirety by the
information and financial statements appearing in all of the
documents incorporated herein by reference and should be read
together therewith. Any statements contained in a document
incorporated or deemed to be incorporated by reference shall be
deemed to be modified or superseded to the extent that a
statement contained herein or in any other document subsequently
filed or incorporated by reference herein modifies or supersedes
such statement. Any statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute
a part of this Prospectus.
Century will provide without charge to each person to whom a
copy of this Prospectus has been delivered, upon the written or
oral request of any such person, a copy of any of the documents
incorporated herein by reference, other than exhibits to such
documents, unless such exhibits are specifically incorporated by
reference in such documents. Requests for such copies should be
directed to Harvey P. Perry, Senior Vice President, General
Counsel and Secretary, Century Telephone Enterprises, Inc., 100
Century Park Drive, Monroe, Louisiana 71203, telephone (318) 388-
9500.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by
reference to the more detailed information and financial statements
appearing elsewhere herein and in the documents incorporated herein
by reference. All share and per share data relating to Century's
common stock contained herein has been adjusted for stock splits
effected as 50% stock dividends distributed in February 1989 and
December 1992. When used in this Prospectus or any Prospectus
Supplement, (i) the term "pops" means the population of the
Company's licensed cellular telephone markets (based on
Donnelley Marketing Information Services Estimates) multiplied by
the Company's proportionate equity interests in the licensed
operators thereof, (ii) the term "Series" means any particular
series of Senior Debt Securities, (iii) the term "Century" means
Century Telephone Enterprises, Inc. and (iv) the term "Company"
means Century and its subsidiaries.
The Company
The Company is a regional diversified telecommunications
company that is primarily engaged in providing local telephone and
mobile communications services. At December 31, 1993, the
Company's telephone subsidiaries served approximately 434,000
telephone access lines, primarily in rural, suburban and small
urban communities in 14 states, with its largest customer bases
located in Wisconsin, Louisiana, Michigan, Ohio and Arkansas.
Through its cellular operations (including those acquired in
February 1994), the Company controls approximately 7.1 million pops
in 27 MSAs (Metropolitan Statistical Areas) and 32 RSAs (Rural
Service Areas), primarily concentrated in Michigan, Louisiana,
Texas, Arkansas and Mississippi. The Company is the majority owner
and operator in 18 of these MSAs and 13 of these RSAs. At December
31, 1993, the Company's majority-owned cellular systems had more
than 116,000 cellular subscribers, not including approximately
28,000 subscribers acquired by the Company in connection with its
February 1994 acquisition of Celutel, Inc. ("Celutel") described
below. Unless otherwise provided herein, the financial and
operating data set forth in this Prospectus does not reflect the
Celutel acquisition. During 1993, telephone operations provided
80% of the Company's consolidated revenues, with mobile
communications operations providing the balance.
Summary Financial and Operating Data
(In thousands, except access lines and cellular units in service)
<TABLE>
<CAPTION>
Year Ended December 31,
_______________________________________________________________________
1989 1990 1991 1992 1993
____ ____ ____ ____ _____
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Revenues $ 215,390 $ 250,365 $ 282,527 $ 359,602 $ 433,197
Cost of sales and
operating expenses 127,022 142,169 155,200 187,076 231,855
Depreciation and
amortization 41,185 47,095 52,240 62,898 76,534
Operating income 47,183 61,101 75,087 109,628 124,808
Interest expense (22,417) (24,132) (22,504) (27,166) (30,149)
Interest before income
taxes and cumulative
effect of changes in
accounting principles 32,904 48,494 57,489 92,572 106,256
Net Income $ 22,164 $ 31,098 $ 37,419 $ 44,305 $ 69,004
Year Ended December 31,
_______________________________________________________________________
1989 1990 1991 1992 1993
____ ____ ____ ____ _____
Operating Data:
Telephone access lines 296,034 304,915 314,819 397,300 434,691
Cellular units in service
in majority-owned and
operated markets 23,199 35,815 51,083 73,084 116,484
Cellular pops 4,821 5,002 5,437 5,497 5,947
Year Ended December 31,
________________________________________________________________________
1989 1990 1991 1992 1993
____ ____ ____ ____ _____
Balance Sheet Data:
Net property, plant
and equipment $ 474,158 $ 490,957 $ 534,998 $ 675,878 $ 827,776
Excess cost of net
assets acquired, net 109,197 110,013 114,258 217,688 297,158
Total assets 691,569 706,411 764,539 1,040,487 1,319,390
Short-term debt 28,873 37,500 28,110 42,124 83,433
Long-term debt, excluding
current maturities 257,708 230,715 254,753 391,944 460,933
Stockholders' equity $ 256,530 $ 280,915 $ 319,977 $ 385,449 $ 513,768
</TABLE>
THE COMPANY
The Company is a regional diversified telecommunications
company that is primarily engaged in providing local telephone
and mobile communications services. At December 31, 1993, the
Company's telephone subsidiaries served approximately 434,000
telephone access lines, primarily in rural, suburban and small
urban communities in 14 states, with its largest customer bases
located in Wisconsin, Louisiana, Michigan, Ohio and Arkansas.
Through its cellular operations (including those acquired in
February 1994), the Company controls approximately 7.1 million
pops in 27 MSAs (Metropolitan Statistical Areas) and 32 RSAs
(Rural Service Areas), primarily concentrated in Michigan,
Louisiana, Texas, Arkansas and Mississippi. The Company is the
majority owner and operator in 18 of these MSAs and 13 of these
RSAs. At December 31, 1993, the Company's majority-owned
cellular systems had more than 116,000 cellular subscribers, not
including approximately 28,000 subscribers acquired by the
Company in connection with its February 1994 acquisition of
Celutel described below. Unless otherwise provided herein, the
financial and operating data set forth in this Prospectus does
not reflect the Celutel acquisition. During 1993, telephone
operations provided 80% of the Company's consolidated revenues,
with mobile communications operations providing the balance.
Century is incorporated in Louisiana; its principal
executive offices are located at 100 Century Park Drive, Monroe,
Louisiana 71203, and its telephone number is (318) 388-9500. At
December 31, 1993, the Company employed approximately 2,800
persons.
Telephone Operations
General. According to published sources, the Company is the
15th largest local exchange carrier in the United States, based
on the approximately 434,000 telephone access lines it served at
year end. At December 31, 1993, 93% of the Company's access
lines were served by digital switching technology, which allows
the Company to offer additional premium services to its
customers, including call forwarding, conference calling, caller
identification, selective call ringing and call waiting.
Revenues and Operating Income. The following table provides
a breakdown of revenues and operating income for the Company's
local exchange carrier subsidiaries in 1991, 1992 and 1993:
<TABLE>
<CAPTION>
Year Ended December 31,
_______________________________________________
1991 1992 1993
__________ ____________ __________
(In millions)
<S> <C> <C> <C>
Revenues:
Local service $ 58.7 $ 78.1 $ 88.7
Network access and
long distance 145.3 182.7 217.1
Other (including revenues
relating to equipment
maintenance and sales, billing
and collection services, network
facilities leases and
directories) 31.8 36.7 42.7
___________ ____________ __________
Total revenues $ 235.8 $ 297.5 $ 348.5
=========== ============ ===========
Operating income $ 80.0 $ 103.7 $ 114.9
=========== ============ ===========
</TABLE>
Certain Considerations Relating to Telephone Operations.
The Federal Communications Commission (the "FCC") and various
state public utility commissions regulate significant portions of
the business of local exchange carriers ("LECs"), including the
licensing, construction, operation, sale and acquisition of LECs.
The FCC and substantially all of the state public utility
commissions having jurisdiction over the Company's telephone
operations regulate the rates and authorized rates of return that
the Company's LECs are allowed to earn. The FCC and a limited
number of state regulatory commissions (including at least three
having jurisdiction over the Company) have begun to relax the
regulation of LECs, including their rates and authorized rates of
return. Coincident with this movement toward reduced regulation
is the introduction and encouragement of local exchange
competition by the FCC and various state public utility
commissions, along with the emergence of certain companies
providing competitive access and other services that compete with
LECs' services and the announcement by certain well-established
interexchange carriers of their desire to enter the LEC business.
In addition, several bills have been filed in the U.S. Congress
that have the potential to significantly alter the regulatory
framework of telephone companies. Moreover, the FCC and certain
state public utility commissions have explored or implemented
initiatives to reduce the funding of certain support mechanisms
that have traditionally benefitted several of the Company's LECs.
There is no assurance that these initiatives will not have a
material adverse effect on the Company.
In connection with the well-publicized convergence of
telecommunications, cable, video, computer and other
technologies, several large companies have recently announced
plans to offer products that would significantly enhance current
communications and data transmission services and, in some
instances, introduce new two-way video, entertainment, data,
consumer and other multimedia services. No assurance can be
given that the Company will have the resources to offer these
products or services, or that the offering of these products or
services by others will not have a material adverse effect on the
Company. Moreover, as the mobile communications industry
matures, the Company anticipates that existing and emerging
mobile communications technologies will increasingly compete with
traditional LEC services.
Mobile Communications Operations
General. According to published sources, the Company is the
15th largest operator of cellular telephone systems in the United
States, based on the population of its majority-owned and
operated markets. After giving effect to the Company's
acquisition of Celutel in February 1994, the Company currently
operates and has majority interests in cellular systems serving
18 MSAs and 13 RSAs, which collectively represent 5.5 million
pops, and has minority interests in nine other MSAs and 19 other
RSAs, which collectively represent 1.6 million pops. The
Company's business strategy for its cellular operations is to
secure operating control of service areas that are geographically
clustered. Clustered cellular systems aid the Company's
marketing effort and provide various operating and service
advantages. After giving effect to the Celutel acquisition, 51%
of the Company's pops in markets operated by the Company are in a
single, contiguous cluster of eight MSAs and six RSAs in
Michigan, and another 19% are in a cluster of four MSAs and seven
RSAs in northern and central Louisiana, southern Arkansas and
eastern Texas. The Company also provides paging services in
conjunction with the operation of its Louisiana and Michigan
cellular systems.
Revenues and Operating Income. The following table provides
a breakdown of revenues and operating income for the Company's
mobile communications operations in 1991, 1992 and 1993:
<TABLE>
<CAPTION>
Year Ended December 31,
_______________________________________________
1991 1992 1993
__________ ____________ __________
(In millions)
<S> <C> <C> <C>
Revenues:
Cellular access fees,
toll revenues and
equipment sales $ 33.8 $ 48.8 $ 68.2
Cellular roaming 7.7 8.9 12.3
Paging services 5.2 4.4 4.2
___________ _____________ __________
Total Revenues $ 46.7 $ 62.1 $ 84.7
=========== ============= ==========
Operating income (loss) $ (5.0) $ 6.0 $ 9.9
=========== ============= ==========
</TABLE>
Certain Considerations Relating to Mobile Communications
Operations. The FCC and various state public utility commissions
that have jurisdiction over the Company's cellular operations
regulate the licensing, construction, operation, interconnection
arrangements, sale and acquisition of the Company's cellular
telephone systems. Certain state public utility commissions also
regulate certain aspects of pricing by cellular operators,
although the effect of these regulations on the Company has thus
far not been significant. Changes in the regulation of cellular
operators (such as increased price regulation by state
authorities or a decision by the FCC to grant additional licenses
in each cellular market) could have a material adverse effect on
the Company.
The Company faces significant competition from the other
cellular licensee in each of its markets, from resale carriers
within such markets and from other communications technologies
that now exist, including specialized mobile radio systems (which
the Company believes are operating in a majority of its markets)
and paging services, and may in the future face competition from
other telecommunications technologies that may be developed or
perfected. Several recent FCC initiatives have resulted in the
allocation of additional frequency spectrum or the issuance of
experimental licenses for mobile communications technologies that
will or may be competitive with cellular communications,
including personal communication services (for which the FCC
intends to begin auctioning certain operating licenses in 1994)
and mobile satellite services. In addition, the FCC has
authorized certain specialized mobile radio service licensees to
configure their systems so as to operate in a manner similar to
cellular systems, and certain of these licensees recently
announced their intention to create a nationwide mobile
communications system to compete with cellular systems. These
initiatives as well as other continuing and rapid technological
advances in the communications field, coupled with legislative
and regulatory uncertainty, make it impossible to predict the
extent of future competition with cellular systems.
The cellular industry has a relatively limited operating
history, and there continues to be uncertainty regarding its
future. Among other factors, there is uncertainty regarding (i)
the continued growth in the number of customers, (ii) the usage
and pricing of cellular services, particularly as market
penetration increases and lower-usage customers subscribe for
service, (iii) the number of customers who will terminate service
each month, and (iv) the impact of changes in technology,
regulation and competition.
Cellular interests are frequently analyzed by reviewing the
number of pops controlled by a cellular provider. The population
of a particular cellular market, however, does not necessarily
bear a direct relationship to the number of subscribers or the
revenues that may be realized from the operation of the related
cellular system. The future value and cash flow of the Company's
cellular interests will depend on, among other things, the
success of its cellular operations.
Acquisition Strategy
The Company's general strategy has been to provide
diversified telecommunications services and to achieve growth
largely through the acquisition of attractive telecommunications
companies. The Company is continually evaluating the possibility
of acquiring additional telephone access lines and cellular
interests. Although the Company's primary focus will be on
acquiring telephone and cellular interests that are proximate to
its properties or that serve a customer base large enough for the
Company to operate efficiently, other communications interests
may also be acquired.
Recent Acquisitions
In February 1994, Century acquired Celutel in exchange for
approximately $51.4 million cash and approximately 1.9 million
shares of Century's common stock. In connection with the
acquisition, Century prepaid approximately $41.7 million of
Celutel's debt. The acquisition was accounted for as a purchase,
resulting in an increase in goodwill of approximately $138
million. Celutel provides cellular service in three Mississippi
MSAs (Jackson, Pascagoula and Biloxi-Gulfport) and two Texas MSAs
(Brownsville-Harlingen and McAllen-Edenburg-Mission). With this
transaction, the Company acquired approximately 1.1 million pops
and approximately 28,000 cellular subscribers.
In March 1994, Century acquired Kingsley Telephone Company
("Kingsley") in exchange for Century common and preferred stock
valued at $4.25 million. Kingsley operates approximately 2,400
access lines in northern Michigan and holds a minority interest
in two northern Michigan RSAs (representing approximately 33,000
pops) that are currently operated by Century.
USE OF PROCEEDS
Unless otherwise indicated in any Prospectus Supplement, the
net proceeds from Century's sale of Senior Debt Securities will
be used for general corporate purposes, including the financing
of acquisitions and capital expenditures and the refinancing of
outstanding indebtedness. Any specific allocation of the net
proceeds from the sale of a particular Series will be determined
at the time of the offering thereof and will be described in the
Prospectus Supplement relating to that Series.
Century expects that it will from time to time engage in
additional private or public financings as market conditions
warrant and as the need arises.
CAPITALIZATION
The following table sets forth the capitalization of the
Company at December 31, 1992 and 1993:
<TABLE>
<CAPTION>
December 31,
______________________________
1992 1993
__________ __________
(In thousands)
<S> <C> <C>
Short-term debt:
Current maturities of long-term debt $ 9,709 $ 14,233
Notes payable to banks 32,415 69,200
_________ ___________
Total short-term debt 42,124 83,433
_________ ___________
Long-term debt, excluding current maturities:
Century 229,615 272,115
Subsidiaries 162,329 188,818
_________ ___________
Total long-term debt, excluding current maturities 391,944 460,933
_________ ___________
Stockholders' equity:
Common Stock, $1.00 par value,
100,000,000 shares authorized,
48,896,876 and 51,294,705 shares
issued and outstanding 48,897 51,295
Paid-in capital 191,522 262,294
Retained earnings 155,676 208,945
Employee Stock Ownership Plan commitment (11,100) (9,220)
Preferred Stock - non-redeemable 454 454
_________ ___________
Total stockholders' equity 385,449 513,768
_________ ___________
Total capitalization $ 819,517 $1,058,134
========= ===========
</TABLE>
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's consolidated
ratio of earnings to fixed charges for the periods shown.
<TABLE>
<CAPTION>
Year Ended December 31,
_________________________________________________________
1989 1990 1991 1992 1993
__________ __________ __________ __________ _________
<S> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges 2.39 2.98 3.48 4.32 4.33
</TABLE>
For purposes of computing these ratios, (i) earnings
consist of income before income taxes and fixed charges with
adjustments primarily for earnings of unconsolidated
subsidiaries and (ii) fixed charges consist of interest expense
(including amortized debt issuance costs) and preferred stock
dividends of subsidiaries.
SELECTED FINANCIAL DATA
(In thousands, except per share data)
The following selected consolidated financial data for, and
as of the end of, each of the years in the five-year period
ended December 31, 1993, are derived from the consolidated
financial statements of Century and its subsidiaries, which
financial statements have been audited by KPMG Peat Marwick,
independent certified public accountants. The consolidated
financial statements as of December 31, 1993 and 1992, and for
each of the years in the three-year period ended December 31,
1993, and the report thereon, are incorporated herein by
reference. The information set forth below is not necessarily
indicative of the results of future operations and should be
read in conjunction with the consolidated financial statements
and notes thereto incorporated herein by reference.
<TABLE>
<CAPTION>
Year Ended December 31,
____________________________________________________________________
1989 1990 1991 1992 1993
___________ ___________ ___________ __________ __________
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Revenues:
Telephone $ 190,538 $ 215,771 $ 235,796 $ 297,510 $ 348,485
Mobile Communications:
Cellular 21,481 29,070 41,515 57,683 80,513
Paging 3,371 5,524 5,216 4,409 4,199
___________ ____________ _____________ ____________ ___________
Total revenues 215,390 250,365 282,527 359,602 433,197
___________ ____________ _____________ ____________ ____________
Expenses:
Cost of sales and
operating expenses 127,022 142,169 155,200 187,076 231,855
Depreciation and
amortization 41,185 47,095 52,240 62,898 76,534
___________ ____________ ______________ ____________ ____________
Total expenses 168,207 189,264 207,440 249,974 308,389
___________ ____________ ______________ ____________ ____________
Operating income 47,183 61,101 75,087 109,628 124,808
___________ ____________ ______________ ____________ ____________
Other income (expense):
Interest expense (22,417) (24,132) (22,504) (27,166) (30,149)
Earnings (loss) from
unconsolidated cellular
partnerships 117 (68) 697 1,692 6,626
Gain on sale of assets -- 4,094 -- 3,985 1,661
Other income, net 8,021 7,499 4,209 4,433 3,310
___________ ____________ ______________ ____________ ___________
Total other income (expense) (14,279) (12,607) (17,598) (17,056) (18,552)
___________ ____________ ______________ ____________ ___________
Income before income taxes
and cumulative effect of
changes in accounting
principles 32,904 48,494 57,489 92,572 106,256
Income taxes 10,740 17,396 20,070 32,599 37,252
___________ ____________ ______________ ____________ ____________
Income before cumulative
effect of changes in
account principles 22,164 31,098 37,419 59,973 69,004
Cummulative effect of
changes in accounting
principles -- -- -- (15,668) --
___________ ____________ ______________ ____________ ____________
Net Income $ 22,164 $ 31,098 $ 37,419 $ 44,305 $ 69,004
=========== ============ ============== ============ ============
Primary earnings per share:
Income before cumulative
effect of changes in
accounting principles $ .49 $ .66 $ .79 $ 1.23 $ 1.35
Cumulative effect of changes
in accounting principles -- -- -- (.32) --
___________ ___________ ______________ ____________ ____________
Primary earnings per share $ .49 $ .66 $ .79 $ .91 $ 1.35
=========== =========== ============== ============ ============
Fully diluted earnings per
share:
Income before cumulative
effect of changes in
accounting principles $ .49 $ .66 $ .79 $ 1.22 $ 1.32
Cumulative effect of changes
in accounting principles -- -- -- (.31) --
___________ ____________ ______________ ____________ ___________
Fully diluted earnings per
share $ .49 $ .66 $ .79 $ .91 $ 1.32
=========== ============ ============== ============ ===========
Dividends per common share $ .272 $ .280 $ .287 .293 .310
=========== ============ ============== ============ ===========
December 31,
____________________________________________________________________
1989 1990 1991 1992 1993
___________ ___________ ___________ __________ __________
Balance Sheet Data:
Net property, plant and
equipment $ 474,158 $ 490,957 $ 534,998 $ 675,878 $ 827,776
Excess cost of net assets
acquired, net 109,197 110,013 114,258 217,688 297,158
Total assets 691,569 706,411 764,539 1,040,487 1,319,390
Short-term debt 28,873 37,500 28,110 42,124 83,433
Long-term debt, excluding
current maturities 257,708 230,715 254,753 391,944 460,933
Stockholder' equity 256,530 280,915 319,977 385,449 513,768
</TABLE>
DESCRIPTION OF SENIOR DEBT SECURITIES
Set forth below are certain general terms and provisions of
the Senior Debt Securities, which may be issued from time to
time in one or more Series. The particular terms of each Series
will be described in a Prospectus Supplement relating thereto.
Accordingly, for a description of the terms of any particular
Series, reference must be made to both the description set forth
below and the Prospectus Supplement relating thereto.
The Senior Debt Securities will be issued under an
Indenture, dated as of March 31, 1994 (the "Indenture"), between
Century and First American Bank & Trust of Louisiana, Monroe,
Louisiana, as Trustee (the "Trustee"). The particular terms of
each Series will be set forth in a resolution of the Executive
Committee of Century's Board of Directors specifically
authorizing such Series (a "Board Resolution") or in one or more
supplemental indentures. The following summary does not purport
to be complete and is subject in all respects to the provisions
of, and is qualified in its entirety by express reference to,
the Indenture and Board Resolution, forms of which are filed
as exhibits to the Registration Statement. Unless otherwise
indicated, each reference italicized in parentheses below
or in any Prospectus Supplement applies to section numbers in
the Indenture and each capitalized term not otherwise defined
herein has the meaning ascribed to it in the Indenture.
General
The Senior Debt Securities will be general unsecured
obligations of Century and will rank prior to all subordinated
indebtedness of Century and pari passu with all other unsecured
indebtedness of Century. For further information on Century's
debt, see "Capitalization." Century is a holding company and
derives substantially all of its income and operating cash flow
from its subsidiaries. As a result, Century relies upon its
subsidiaries to generate the funds necessary to meet its
obligations, including the payment of principal and interest on
any Senior Debt Securities to be issued hereunder. Certain of
the subsidiaries' loan agreements contain various restrictions
on the transfer of funds to Century, including certain
provisions that restrict the amount of dividends that may be
paid to Century. At December 31, 1993, the amount of retained
earnings of Century's subsidiaries not subject to dividend
restrictions was $286,340,000. Moreover, Century's rights to
receive assets of any subsidiary upon its liquidation or
reorganization (and the ability of holders of Senior Debt
Securities to benefit indirectly therefrom) are subject to the
prior claims of creditors of that subsidiary.
Except to the extent otherwise provided below or in any
Prospectus Supplement, neither the Indenture nor the Senior Debt
Securities to be offered thereby (i) limit the amount of secured
or unsecured indebtedness that may be issued or incurred by
Century or any of its subsidiaries, (ii) restrict the payment of
dividends by Century or the sale or transfer of Century's assets
or (iii) contain provisions that would afford holders of Senior
Debt Securities protection in the event of a change in control,
highly leveraged transaction, recapitalization or similar
transaction involving Century, any of which could adversely
affect the holders of Senior Debt Securities.
The Prospectus Supplement relating to any particular Series
being offered thereby will set forth a description of such
Series, including (i) the title and aggregate principal amount
of such Series; (ii) Century's net proceeds from the sale
thereof; (iii) the price or prices at which such Series will be
issued; (iv) the date or dates of maturity; (v) the rate or
rates per annum, if any, at which such Series will bear interest
or the method of determining such rate or rates; (vi) the date
or dates from which any such interest will accrue and the date
or dates at which any such interest will be payable; (vii) the
terms for redemption or early payment, if any, including any
mandatory or optional sinking fund or similar provisions; (viii)
any special United States federal income tax considerations
applicable to such Series; (ix) any special provisions relating
to the defeasance of such Series or (x) any other special
considerations or specific provisions applicable to such Series.
Reference is also made to such Prospectus Supplement for
information regarding any additional covenants that may relate
to such Series.
The Senior Debt Securities may bear interest at a fixed or
floating rate. Senior Debt Securities bearing no interest or
interest at a rate that at the time of issuance is below the
prevailing market rate may be sold at a discount below their
stated principal amount.
None of the Senior Debt Securities will entitle the holder
thereof to convert or exchange the Senior Debt Securities for or
into any other security of Century.
The Indenture is, and the Senior Debt Securities will be,
governed by Louisiana law. The Indenture is subject to and
governed by the Trust Indenture Act of 1939, as amended.
Denominations, Registration and Transfer
Unless otherwise provided in any Board Resolution and
described in the related Prospectus Supplement, the Senior Debt
Securities will be issued only in fully registered form and in
denominations of $1,000 or any multiples thereof (Section
2.03). The Trustee will act as the registrar of each Series
(Section 2.05). No service charge will be made for any
registration of transfer or exchange of Senior Debt Securities,
or issue of new Senior Debt Securities in the event of a partial
redemption of any Series, but Century may generally require
payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith (Section
2.05). The Trustee may appoint an authenticating agent for any
Series to act on the Trustee's behalf in connection with
authenticating Senior Debt Securities of such Series issued upon
the exchange, transfer or partial redemption thereof (Section
2.10). The Trustee may at any time rescind the designation of
any such agent (Section 2.10).
Century shall not be required (i) to issue, register the
transfer of or exchange the Senior Debt Securities of any Series
during a period beginning 15 days before any selection of Senior
Debt Securities of that Series to be redeemed and ending at
the close of business on the day of mailing of the relevant
redemption notice or (ii) to register the transfer of or
exchange any Senior Debt Securities of any Series, or portions
thereof, called for redemption (Section 2.05).
Payment and Paying Agents
Unless otherwise indicated in any Prospectus Supplement,
payment of principal of (and premium, if any) and interest on
Senior Debt Securities of any Series will be made in U.S.
dollars at the principal office of Century's Paying Agent or, at
the option of Century, by check in U.S. dollars mailed or
delivered to the person in whose name such Senior Debt Security
is registered. Unless otherwise indicated in any Prospectus
Supplement and subject to certain exceptions provided for in the
Indenture, payment of any installment of interest on any Series
will be made to the person in whose name such Senior Debt
Security is registered at the close of business on the record
date established under the Indenture for the payment of interest
(Section 2.03).
Unless otherwise indicated in any Prospectus Supplement,
the Trustee will act as Century's sole Paying Agent and the
principal office of the Trustee, 1500 North 18th Street, Monroe,
Louisiana, will be designated as such agent's office for
purposes of payments with respect to Senior Debt Securities.
Any other Paying Agents initially designated by Century with
respect to any Series will be named in the related Prospectus
Supplement. Century may at any time designate additional Paying
Agents or rescind the designation of any Paying Agents or
approve a change in the office through which any Paying Agent
acts, except that Century will be required to maintain a Paying
Agent in the Borough of Manhattan, City and State of New York,
or Monroe, Louisiana. (Sections 4.02 and 4.03).
Any money set aside by Century for the payment of principal
of (and premium, if any) or interest on any Senior Debt
Securities that remains unclaimed two years after such payment
has become due and payable will be repaid to Century on May 31
following the expiration of such two-year period and the holder
of such Senior Debt Security may thereafter look only to Century
for payment thereof (Section 11.05).
Redemption and Sinking Fund Provisions
Each Series may be redeemed, in whole or in part, upon not
less than 30 days' and not more than 60 days' notice at the
redemption prices and subject to the terms and conditions
(including those relating to any sinking fund established with
respect to such Series) that will be set forth in a Board
Resolution or supplemental indenture and in the Prospectus
Supplement relating to such Series (Sections 3.01 and 3.02). If
less than all of the Senior Debt Securities of the Series are to
be redeemed, the Trustee shall select the Senior Debt Securities
of such Series, or portions thereof, to be redeemed pro rata, by
lot or by any other method the Trustee shall deem fair and
reasonable (Section 3.02).
Replacement of Securities
Any Senior Debt Security that becomes mutilated, destroyed,
lost or stolen will be replaced by Century at the expense of the
holder upon delivery to Century and the Trustee of the Senior
Debt Security or evidence of the destruction, loss or theft
thereof satisfactory to Century and the Trustee. An indemnity
satisfactory to the Trustee and Century may be required before a
replacement security will be issued (Section 2.07).
Events of Default and Notice Thereof
Unless otherwise specified in any Prospectus Supplement,
the terms and conditions set forth under this heading will
govern defaults under the Indenture.
The Indenture provides that the following described events
constitute Events of Default with respect to each Series: (a)
failure for 30 Business Days to pay interest on the Senior Debt
Securities of that Series when due; (b) failure to pay principal
of (or premium, if any, on) the Senior Debt Securities of that
Series when due (whether at maturity, upon redemption, by
declaration or otherwise) or to make any sinking or analogous
fund payment with respect to that Series unless caused solely by
a wire transfer malfunction or similar problem outside Century's
control; (c) failure to observe or perform any other covenant of
that Series for 60 days after written notice with respect
thereto or (d) certain events relating to bankruptcy,
insolvency or reorganization (Section 6.01).
If an Event of Default shall occur and be continuing (the
default not having been cured or waived) with respect to any
Series and if it is known to the Trustee, the Trustee is
required to mail to each holder of such Series a notice of the
Event of Default within 90 days of such default (Section 6.07).
Upon an Event of Default, the Trustee or the holders of not
less than 25% in aggregate outstanding principal amount of any
Series, by notice in writing to the Company (and to the Trustee
if given by such holders), may declare the principal of all
Senior Debt Securities of that Series due and payable
immediately, but the holders of a majority in aggregate
outstanding principal amount of such Series may rescind such
declaration and waive the default if the default has been cured
and a sum sufficient to pay all matured installments of interest
and principal (and premium, if any) has been deposited with the
Trustee before any judgment or decree for such payment has been
obtained or entered (Section 6.01).
Holders of Senior Debt Securities may not enforce the
Indenture except as provided therein. Subject to the provisions
of the Indenture relating to the duties of the Trustee, if an
Event of Default occurs and is continuing the Trustee will be
under no obligation to exercise any of the rights or powers
under the Indenture at the request or direction of any holders
of the affected Series, unless, among other things, the holders
shall have offered the Trustee indemnity reasonably satisfactory
to it. Subject to the indemnification provisions and certain
limitations contained in the Indenture, the holders of a
majority in aggregate principal amount of the Senior Debt
Securities of such Series then outstanding will have the right
to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee. The holders of a
majority in aggregate principal amount of the then outstanding
Senior Debt Securities of any Series affected by a default
may, in certain cases, waive such default except a default in
payment of principal of, or any premium, if any, or interest
on, the Senior Debt Securities of that Series or a call for
redemption of the Senior Debt Securities of that Series
(Sections 6.04 and 6.06).
Century will be required to furnish to the Trustee annually
a statement as to the performance by it of certain of its
obligations under the Indenture and as to any default in such
performance (Section 5.03).
Discharge and Defeasance
The Indenture provides that Century may discharge the
Indenture with respect to any Series, subject to certain
exceptions, if at any time (i) Century delivers to the Trustee
for cancellation all outstanding Senior Debt Securities of such
Series previously authenticated and for whose payment money or
U.S. Government Obligations have been deposited in trust by
Century or (ii) all outstanding Senior Debt Securities of such
Series not previously delivered to the Trustee for cancellation
by Century shall have become due and payable or are to become
due and payable or called for redemption within one year and
Century has deposited or caused to be deposited with the Trustee
the entire amount in moneys or U.S. Government Obligations
sufficient, without reinvestment, to pay at maturity or upon
redemption such outstanding Senior Debt Securities, including
principal (and premium, if any) and interest due or to become
due to such date of maturity or redemption, and if Century shall
also pay or cause to be paid all other sums payable thereunder
with respect to such Series (Section 11.01).
Additionally, the Indenture provides that Century may
discharge all of its obligations under the Indenture with
respect to any Series, subject to certain exceptions, if at any
time all outstanding Senior Debt Securities of such Series not
previously delivered to the Trustee for cancellation by Century
or which have not become due and payable as described above
shall have been paid by Century by depositing irrevocably with
the Trustee moneys or U.S. Government Obligations sufficient to
pay at maturity or upon redemption such outstanding Senior Debt
Securities, including principal (and premium, if any) and
interest due or to become due to such date of maturity or
redemption, and if Century shall also pay or cause to be paid
all other sums payable thereunder with respect to such Series
(Section 11.02).
Merger and Consolidation
Nothing in the Indenture or any of the Senior Debt
Securities prevents Century from consolidating or merging with
or into, or selling or otherwise disposing of all or
substantially all of its assets to, another corporation, subject
to Century's agreement (i) to obtain in connection therewith a
supplemental indenture pursuant to which the surviving entity or
transferee agrees to assume Century's obligations under all
outstanding Senior Debt Securities, including the due and
punctual payment of the principal of (and premium, if any, on)
and interest on such outstanding Senior Debt Securities, and
(ii) that such surviving entity or transferee is organized under
the laws of the United States, any state thereof or the District
of Columbia (Section 10.01).
Modification of Indenture
The Indenture contains provisions permitting Century, when
authorized by a Board Resolution, and the Trustee, with the
consent of the holders of not less than a majority in aggregate
principal amount of the Senior Debt Securities of any Series at
the time outstanding and affected by such modification, to
modify the Indenture or any supplemental indenture affecting
that Series or the rights of the holders thereof. However, no
such modification shall (i) extend the fixed maturity of any
Senior Debt Securities of any Series, reduce the principal
amount thereof, reduce the rate or extend the time of payment of
interest thereon or reduce any premium payable upon the
redemption thereof, without the consent of the holder of each
Senior Debt Security so affected, or (ii) reduce the aforesaid
percentage of Senior Debt Securities, the holders of which are
required to consent to any such supplemental indenture, without
the consent of the holder of each Senior Debt Security then
outstanding and affected thereby (Section 9.02).
Century and the Trustee may execute, without the consent of
any holder of Senior Debt Securities, any supplemental indenture
for certain other usual purposes such as (i) creating a new
Series; (ii) evidencing the assumption by any successor to
Century of Century's obligations under the Indenture; (iii)
adding covenants to the Indenture for the protection of the
holders of Senior Debt Securities; (iv) curing any ambiguity or
inconsistency in the Indenture; and (v) changing or eliminating
any provisions of the Indenture provided that there is no
outstanding Senior Debt Security of any Series created prior to
such change which would benefit therefrom (Sections 2.01, 9.01
and 10.01).
Limitations on Liens
The Indenture provides that Century will not, while any of
the Senior Debt Securities remain outstanding, create or suffer
to exist any mortgage, lien, pledge, security interest or other
encumbrance (individually, a "Lien" and collectively, "Liens")
upon Century's property, whether now owned or hereafter
acquired, unless it shall secure the Senior Debt Securities then
outstanding by such Lien equally and ratably with all
obligations and indebtedness thereby secured so long as such
obligations and indebtedness remain so secured. Notwithstanding
the foregoing, the Indenture will not restrict Century from
creating or suffering to exist:
(i) Liens upon property hereafter acquired by Century or
Liens on such property at the time of the acquisition
thereof, or conditional sales agreements or title
retention agreements with respect to any such
property;
(ii) Liens on the stock of a corporation which, when such
Liens arise, concurrently becomes a subsidiary of
Century, or Liens on all or substantially all of the
assets of a corporation arising in connection with
Century's purchase thereof;
(iii) Liens for taxes and similar levies; deposits to secure
performance or obligations under certain specified
circumstances and laws; mechanics' Liens and similar
Liens arising in the ordinary course of business;
Liens created by or resulting from legal proceedings
being contested in good faith; certain specified
zoning restrictions and other restrictions on the use
of real property; interests of lessors in property
subject to any capitalized lease; and certain other
similar Liens generally arising in the ordinary course
of business;
(iv) Liens existing on the date of the Indenture;
(v) Liens upon Century's property arising in connection
with the merger or consolidation of affiliates of
Century with or into Century; and
(vi) Liens that replace, extend or renew any Lien otherwise
permitted under the Indenture (Sections 4.05 and
4.06).
The restriction in the Indenture described above would not
afford the holders of the Senior Debt Securities protection in
the event of a highly leveraged transaction in which unsecured
indebtedness was incurred or in which the Liens arising in
connection therewith were freely permitted under the Indenture,
nor would it afford protection in the event of one or more
highly leveraged transactions in which secured indebtedness was
incurred by Century's subsidiaries. However, in the event of
one or more highly leveraged transactions in which secured
indebtedness was incurred by Century, these provisions would
require the Senior Debt Securities to be secured equally and
ratably with such indebtedness, subject to the exceptions
described above.
Concerning the Trustee
The Trustee, prior to the occurrence of an Event of
Default, undertakes to perform only such duties as are
specifically set forth in the Indenture and, after the
occurrence of an Event of Default, shall exercise the same
degree of care as a prudent person would exercise in the conduct
of such person's own affairs (Section 7.01). Subject to such
provision, the Trustee is under no obligation to exercise any of
the rights or powers vested in it by the Indenture at the
request, order or direction of any holders of Senior Debt
Securities, unless offered reasonable security or indemnity by
such holders against the costs, expenses and liabilities which
might be incurred thereby (Section 7.02). The Trustee is not
required to expend or risk its own funds or incur personal
financial liability in the performance of its duties if the
Trustee reasonably believes that repayment of such funds or
liability or adequate indemnity is not reasonably assured to it
(Section 7.01). Century shall pay the Trustee reasonable
compensation and reimburse it for all reasonable expenses
incurred in accordance with the Indenture (Section 7.06).
The Trustee may resign with respect to one or more Series
and a successor Trustee may be appointed to act with respect to
such Series (Section 7.10).
The Trustee also serves as trustee for certain of Century's
employee benefit plans and provides revolving credit and other
traditional banking services to Century. The following officers
and directors of Century are members of the board of directors
of the Trustee: Clarke M. Williams, Chairman of the Board, Glen
F. Post, III, President, Chief Executive Officer and Vice
Chairman of the Board, and William R. Boles, Jr., Director.
PLAN OF DISTRIBUTION
Century may sell Senior Debt Securities (i) through
underwriters or dealers, (ii) directly to one or more
purchasers, (iii) through agents, or (iv) through a combination
of any such methods of sale. The applicable Prospectus
Supplement will set forth the terms of the offering of the
Senior Debt Securities offered thereby, including the initial
public offering price, the name or names of any underwriters,
dealers or agents, any underwriting discounts and other items
constituting underwriters' compensation from Century, any
agents' commissions and any discounts, concessions or
commissions allowed or reallowed or paid by any underwriters to
other dealers. Only underwriters so named in the Prospectus
Supplement shall be deemed to be underwriters in connection with
the Senior Debt Securities offered thereby.
Underwriters may offer and sell any Series at a fixed price
or prices, which may be changed, or from time to time at market
prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. Century also
may directly offer and sell any Series in exchange for, among
other things, one or more of its outstanding issues of debt or
convertible debt securities. Century also may from time to time
authorize agents acting on a best efforts basis to solicit or
receive offers to purchase any Series upon the terms and
conditions set forth in the related Prospectus Supplement. In
connection with the sale of any Series, underwriters or agents
may be deemed to have received compensation from Century in the
form of underwriting discounts or commissions and may also
receive commissions from purchasers of such Series for whom they
may act as agents. Underwriters may sell any Series to or
through dealers, and such dealers may receive compensation in
the form of discounts, concessions or commissions from the
underwriters or commissions from the purchasers for whom they
may act as agent, or both.
Underwriters, dealers and agents may be entitled, under
agreements entered into with Century, to indemnification against
and contributions toward certain civil liabilities, including
liabilities under the Securities Act. Century may agree to
reimburse underwriters or agents for certain expenses incurred
in connection with the distribution of any Series. Certain of
the underwriters, dealers or agents and their respective
associates may be customers of, engage in transactions with, and
perform services for, Century in the ordinary course of
business. The obligations of the underwriters to purchase the
Senior Debt Securities of the Series offered will be subject to
certain conditions precedent, and, unless otherwise indicated in
the related Prospectus Supplement, the underwriters will be
obligated to purchase all such Senior Debt Securities if any
such securities are purchased.
If so indicated in the applicable Prospectus Supplement,
Century will authorize agents, underwriters, or dealers to
solicit offers by certain institutional investors to purchase
Senior Debt Securities providing for payment and delivery on a
future date specified in the Prospectus Supplement. There may
be limitations on the minimum amount which may be purchased by
any such institutional investor or on the portion of the
aggregate principal amount of the particular Series of Senior
Debt Securities that may be sold pursuant to such arrangements.
Institutional investors to which such offers may be made, when
authorized, include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and
charitable institutions, and such other institutions as may be
approved by Century. The obligations of any such purchasers
pursuant to such delayed delivery and payment arrangements will
not be subject to any conditions except (i) the purchase by an
institution of the particular Senior Debt Securities shall not
at the time of delivery be prohibited under the laws of any
jurisdiction in the United States to which such institution is
subject and (ii) if the particular Senior Debt Securities are
being sold to underwriters, Century shall have sold to such
underwriters the total principal amount of such Senior Debt
Securities less the principal amount thereof covered by such
delayed payment and delivery arrangements. Underwriters will
not have any responsibility in respect of the validity of such
arrangements or the performance of Century or such institutional
investors thereunder.
The Senior Debt Securities of each Series, when first
issued, will not have an established trading market. Any
underwriters or agents to or through whom Senior Debt Securities
are sold by Century for public offering and sale may make a
market in such Senior Debt Securities, but such Underwriters or
agents will not be obligated to do so and may discontinue any
market making at any time without notice. If the Senior Debt
Securities are traded after their initial issuance, they may
trade at a discount from their initial public offering price,
depending upon prevailing interest rates, the market for similar
securities, the Company's performance and other factors. There
can be no assurance that an active public market for the Senior
Debt Securities will develop or be maintained.
LEGAL MATTERS
The validity of the Senior Debt Securities being offered
hereby will be passed upon for Century by Jones, Walker,
Waechter, Poitevent, Carrere & Denegre, L.L.P., New Orleans,
Louisiana. Certain legal matters relating to offerings of
Senior Debt Securities will be passed upon on behalf of the
applicable underwriters, dealers or agents by counsel named in
the applicable Prospectus Supplement.
EXPERTS
The consolidated financial statements and related financial
statement schedules of Century as of December 31, 1993 and 1992,
and for each of the years in the three-year period ended
December 31, 1993 incorporated by reference herein have been
incorporated by reference in reliance upon the report, also
incorporated by reference herein, of KPMG Peat Marwick,
independent certified public accountants, and upon the authority
of said firm as experts in accounting and auditing. The report
of KPMG Peat Marwick covering the consolidated financial
statements and related financial statement schedules refers to
changes in methods of accounting for income taxes and
postretirement benefits other than pensions in 1992.
The consolidated balance sheets of Celutel as of April 30,
1993 and 1992, and the related consolidated statements of
operations, changes in shareholders' deficit and cash flows for
each of the years in the three-year period ended April 30, 1993,
have been incorporated by reference herein in reliance on the
report of Coopers & Lybrand, independent certified public
accountants, given on the authority of such firm as experts in
accounting and auditing.
<PAGE>
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No person has been authorized to
give any information or to make any
representations in connection with this
offering other than those contained or
incorporated by reference in this $150,000,000
Prospectus Supplement and the accompanying
Prospectus and, if given or made, such
other information and representations must
not be relied upon as having been Century Telephone
authorized by the Company or the Enterprises, Inc.
Underwriters. Neither the delivery of
this Prospectus Supplement and the
accompanying Prospectus nor any sale made
hereunder shall, under any circumstances,
create any implication that there has been
no change in the affairs of the Company $50,000,000 7 3/4% Senior Notes,
since the date hereof or that the Series A, Due 2004
information contained herein is correct as
of any time subsequent to its date.
Neither this Prospectus Supplement nor the
accompanying Prospectus constitute an
offer to sell or a solicitation of an $100,000,000 8 1/4% Senior Notes,
offer to buy any securities other than the Series B, Due 2024
registered securities to which they relate
or constitute an offer to sell or a
solicitation of an offer to buy such
securities in any circumstances in which
such offer or solicitation is unlawful.
_________________
______________ PROSPECTUS SUPPLEMENT
_________________
TABLE OF CONTENTS
Page
____ PAINE WEBBER INCORPORATED
Prospectus Supplement
Selected Quarterly Financial and
Operating Data...................... S-3
Use of Proceeds....................... S-4 STEPHENS INC.
Capitalization........................ S-4
Supplemental Description of
Senior Notes........................ S-5
Underwriting.......................... S-6 GOLDMAN, SACHS & CO.
Legal Matters......................... S-6
Prospectus
Available Information................ 2 MERRILL LYNCH & CO.
Incorporation of Certain Documents
by Reference....................... 2 _________________
Prospectus Summary................... 3
The Company.......................... 5
Use of Proceeds...................... 7
Capitalization....................... 8
Ratio of Earnings to Fixed Charges... 8
Selected Financial Data.............. 9
Description of Senior Debt
Securities......................... 10
Plan of Distribution................. 15 April 29, 1994
Legal Matters........................ 16
Experts.............................. 16
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