United States
Securities and Exchange Commission
Washington, D.C. 20549
Form 11-K
[ X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 1-7784
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
CENTURY TELEPHONE ENTERPRISES, INC.
RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES AND TRUST
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
CENTURY TELEPHONE ENTERPRISES, INC.
100 CENTURY PARK DRIVE
MONROE, LA 71203
Independent Auditors' Report
The Board of Directors
Century Telephone Enterprises, Inc.:
We have audited the accompanying statements of assets available for benefits
with fund information of Century Telephone Enterprises, Inc. Retirement Savings
Plan for Bargaining Unit Employees and Trust as of December 31, 1997 and 1996,
and the related statement of changes in assets available for benefits with fund
information for the year ended December 31, 1997. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the assets available for benefits of Century Telephone
Enterprises, Inc. Retirement Savings Plan for Bargaining Unit Employees and
Trust as of December 31, 1997 and 1996, and the changes in assets available for
benefits for the year ended December 31, 1997, in conformity with generally
accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The fund information in the
statements of assets available for benefits and the statement of changes in
assets available for benefits is presented for purposes of additional analysis
rather than to present the assets available for plan benefits and changes in
assets available for plan benefits of each fund. The supplemental schedules and
fund information have been subjected to the auditing procedures applied in the
audits of the basic financial statements and, in our opinion, are fairly stated
in all material respects in relation to the basic financial statements taken as
a whole.
KPMG PEAT MARWICK LLP
/s/ KPMG PEAT MARWICK LLP
Shreveport, Louisiana
June 12, 1998
CENTURY TELEPHONE ENTERPRISES, INC.
RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES AND TRUST
Statements of Assets Available for Benefits With Fund Information
<TABLE>
<CAPTION>
Century Money Bond
Combined S & P 500 Common Market Index Loan Sweep
December 31, 1997 Funds Stock Fund Stock Fund Fund Fund Fund Account
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
PLAN ASSETS
Investments, at fair value $ 5,188,430 2,562,203 1,720,215 372,605 296,326 237,081 -
Cash 30,867 - 23,855 - - - 7,012
Contributions receivable - employer 34,051 18,081 10,140 3,285 2,545 - -
- ----------------------------------------------------------------------------------------------------------------------------------
ASSETS AVAILABLE
FOR BENEFITS $ 5,253,348 2,580,284 1,754,210 375,890 298,871 237,081 7,012
==================================================================================================================================
December 31, 1996
- ----------------------------------------------------------------------------------------------------------------------------------
PLAN ASSETS
Investments, at fair value $ 3,468,978 1,668,009 988,510 379,407 255,190 177,862 -
Cash 14,834 - 9,682 - - - 5,152
Contributions receivable - employer 32,278 15,807 9,951 3,874 2,646 - -
- ----------------------------------------------------------------------------------------------------------------------------------
ASSETS AVAILABLE
FOR BENEFITS $ 3,516,090 1,683,816 1,008,143 383,281 257,836 177,862 5,152
==================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
CENTURY TELEPHONE ENTERPRISES, INC.
RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT EMPLOYEES AND TRUST
Statement of Changes in Assets Available for Benefits With Fund Information
For the Year Ended December 31, 1997
<TABLE>
<CAPTION>
S & P 500 Century Money Bond
Combined Stock Common Market Index Loan Sweep
Funds Fund Stock Fund Fund Fund Fund Account
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to assets:
Investment income
Net appreciation in
fair value of investments $ 1,153,491 507,674 638,243 - 7,574 - -
Other income 126,663 88,356 - 19,901 18,406 - -
Interest income 25,141 - 751 - - 24,047 343
Dividends - Common Stock of
Century Telephone Enterprises, Inc. 12,641 - 12,641 - - - -
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income 1,317,936 596,030 651,635 19,901 25,980 24,047 343
- ----------------------------------------------------------------------------------------------------------------------------------
Contributions
Participants 404,144 213,019 118,480 40,715 31,930 - -
Company 206,225 106,735 60,975 21,721 16,794 - -
- ----------------------------------------------------------------------------------------------------------------------------------
Total contributions 610,369 319,754 179,455 62,436 48,724 - -
- ----------------------------------------------------------------------------------------------------------------------------------
Total additions 1,928,305 915,784 831,090 82,337 74,704 24,047 343
- ----------------------------------------------------------------------------------------------------------------------------------
Deductions from assets:
Participant withdrawals 189,008 64,440 45,910 57,784 15,179 5,695 -
Other, net 2,039 940 724 118 50 - 207
- ----------------------------------------------------------------------------------------------------------------------------------
Total deductions 191,047 65,380 46,634 57,902 15,229 5,695 207
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase prior to
interfund transfers 1,737,258 850,404 784,456 24,435 59,475 18,352 136
Interfund transfers - 46,064 (38,389) (31,826) (18,440) 40,867 1,724
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) 1,737,258 896,468 746,067 (7,391) 41,035 59,219 1,860
Assets available for benefits:
Beginning of year 3,516,090 1,683,816 1,008,143 383,281 257,836 177,862 5,152
- ----------------------------------------------------------------------------------------------------------------------------------
End of year $ 5,253,348 2,580,284 1,754,210 375,890 298,871 237,081 7,012
==================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
CENTURY TELEPHONE ENTERPRISES, INC.
RETIREMENT SAVINGS PLAN FOR BARGAINING
UNIT EMPLOYEES AND TRUST
Notes to Financial Statements
December 31, 1997
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PROVISIONS OF THE PLAN
Basis of Presentation
The Century Telephone Enterprises, Inc. Retirement Savings Plan for
Bargaining Unit Employees and Trust (the Plan) was established on April 1,
1992. The accompanying financial statements of the Plan have been prepared
on the accrual basis of accounting and present the assets available for
benefits and changes in assets available for benefits. The Plan has made
estimates in preparing the accompanying financial statements in accordance
with generally accepted accounting principles. Actual results could differ
from those estimates.
The assets of the Plan are invested by the Trustee in various investment
programs (funds) which are described in Note 2.
The following description of the Plan provides only general information.
Participants should refer to the Plan Document for a more complete
description of the Plan's provisions.
Participation
Participation in the Plan is available to each employee whose compensation
and conditions of employment are covered by a collective bargaining
agreement between the Communications Workers of America, Local 4370 and
CenturyTel of Ohio, Inc. The Plan sponsor is Century Telephone
Enterprises, Inc. (the Company).
In order to participate in the Plan, an employee must execute a Salary
Deferral Agreement with the Company. In the Salary Deferral Agreement, an
employee agrees to a deferral of between one percent and ten percent of
his base pay on a pre-tax basis, or between one percent and sixteen
percent of his base pay on an after-tax basis. An employee may elect a
deferral of his base pay using a combination of pre-tax and after-tax
elections provided the total deferral does not exceed sixteen percent and
the before-tax deferral does not exceed ten percent. The amount of
compensation deferred by each participant is credited to a pre-tax account
and/or an after-tax account (Participant Contribution Accounts) maintained
for each participant by the Trustee.
As of the end of each payroll period, the Company contributes to an
account (Employer Match Contribution Account) for each participant a
contribution equal to 50% of each such participant's contribution during
such payroll period, however, this matching contribution applies only to
the first 6% of such participant's base compensation contributed to the
Plan by the employee.
The Company may make additional match contributions to participants'
accounts (Additional Match Contribution Account) in an amount determined
by the Company.
During 1997 the Company contributed $206,225 to the Plan, of which
$172,173 related to contributions made to the Employer Contribution
Account and $34,052 related to contributions made to the Additional Match
Account.
An employee is permitted to transfer to the Plan as a contribution his
interest in another plan qualified under Section 401(k) of the Internal
Revenue Code, as amended (the Code). Such contribution must qualify as a
"rollover" amount described in Section 402(a)(5) of the Code, or a
"rollover" contribution described in Section 408(d)(3) of the Code. Such a
rollover will be credited to a rollover account on behalf of the
participant (the Participant Rollover Account).
The interest of a participant in his Participant Contribution Account and
his Participant Rollover Account is fully vested and non-forfeitable at
all times.
The interest of a participant in his Employer Match Contribution Account
and Additional Match Contribution Account becomes fully vested after five
years of service. A participant with less than five years of service has
no vested interest in these accounts.
Reports to Participants
Participants are furnished with quarterly statements which set forth the
status of their accounts in the Plan.
Forfeitures
A participant's non-vested account balances shall be forfeited as of the
date upon which the participant's employment has terminated with the
Company. Forfeiture amounts shall be utilized to reduce Company
contributions or may be added to additional match contributions as
directed by the administrator.
Distributions
If the employment of a participant with the employer ceases because of
death, retirement, disability, termination of employment or for any other
reason, the participant's vested interest in the Plan will be distributed
to him or to his beneficiary in a lump sum. If the participant dies
without designating a beneficiary, his beneficiary shall be, in the order
listed, (i) his spouse, (ii) his children, or (iii) his estate.
Withdrawals
A participant who is an employee may make two withdrawals within any
twelve month period from his after-tax investment account and may withdraw
the entire balance.
A participant who is an employee and over age 59 1/2 may make one
withdrawal from his vested investment accounts prior to normal
distribution requirements being met. Any additional withdrawals may be
made from a Participant Contribution Account or a Participant Rollover
Account only as a result of financial hardship related to unreimbursable
educational expenses, medical expenses which are not reimbursable by
insurance, the need to pay for the funeral expenses of a family member or
the prevention of eviction or foreclosure from the Participant's principal
residence, or for the purchase of the employee's principal residence. The
determination of the existence of a financial hardship and the amount
required to be distributed to meet the need created by the hardship shall
be made uniformly and without discrimination at the sole discretion of the
Plan Administrator.
Loans to Participants
The Plan has a provision whereby a participant can borrow from his
Participant Contribution Account or Participant Rollover Account. The
maximum loan is 50% of the vested account balance, up to $50,000. The
loans are repaid through payroll deductions and the interest rate is the
prime rate published in the Wall Street Journal plus 3%. The loan
repayment period may not exceed five years except for loans for the
purchase of the Participant's principal residence which may be for any
period not to exceed ten years.
Trustee
The Trustee of the Plan, as of December 31, 1997, was Barclays Global
Investors (BGI). The Board of Directors of the Company may remove the
Trustee and appoint a successor trustee. The Company and the Trustee have
entered into a Trust Agreement which provides for the establishment of a
Trust for the purpose of holding and investing the contributions to the
Trust pursuant to the provisions of the Plan.
Administration
The Company has appointed a committee to administer the Plan. The
individuals who administer the Plan serve at the discretion of the Board
of Directors of the Company and may be removed by the Board of Directors
at any time. The administrative costs of the Plan are paid by the Company.
Market Value Determination
Investments in Century Telephone Enterprises, Inc. Common Stock (Century
Common Stock) are valued at the closing market quote on December 31, 1997
and 1996, respectively. Other investments in the funds, which consist of
units of mutual funds, are valued by the Trustee based on the market value
at year-end of the underlying assets of each fund. Loans to participants
are valued at principal amount outstanding, which approximates market
value.
Plan Termination
Although it has not expressed any intention to do so, the Company has the
right under the Plan to change, suspend or terminate the Plan at any time,
subject to the provisions set forth in the Employee Retirement Income
Security Act of 1974. The Company, however, is required to maintain the
Plan under the terms of the labor agreement.
(2) DESCRIPTION OF THE FUNDS
The following is a description of each of the funds available to Plan
participants:
(a) S & P 500 Stock Fund - consists primarily of investments in the same
stocks and in substantially the same percentages as the S & P 500
Index (48.8% and 47.4% of assets at December 31, 1997 and 1996,
respectively).
(b) Century Common Stock Fund - consists primarily of shares of Century
Common Stock (32.7% and 28.1% of assets at December 31, 1997 and
1996, respectively).
(c) Money Market Fund - consists primarily of short-term investments in
various money market instruments (7.1% and 10.8% of assets at
December 31, 1997 and 1996, respectively).
(d) Bond Index Fund - consists primarily of investments in government and
corporate bonds (5.6% and 7.3% of assets at December 31, 1997 and
1996, respectively).
(e) Loan Fund - represents loans to participants from the participants'
investment accounts (4.5% and 5.1% of assets at December 31, 1997 and
1996, respectively).
A participant may instruct that all contributions to his accounts be
allocated among the various funds. A participant may change his investment
allocation instructions at any time, however, the participant can only
change his contribution percentage on a quarterly basis.
(3) INCOME TAXES
The Plan and related trust meet the necessary requirements of Internal
Revenue Code Section 401(a) and, accordingly, the trust underlying the
Plan is exempt from income taxation pursuant to Internal Revenue Code
Section 501(a). A favorable determination letter was received in October
1995 related to the Plan.
(4) RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by BGI. BGI is
the Trustee as defined by the Plan and, therefore, these transactions
qualify as party-in-interest transactions. Fees paid by the Company to BGI
for trustee, investment management, record keeping and other services
amounted to $15,251 for the year ended December 31, 1997.
(5) CONCENTRATION OF INVESTMENTS
As of December 31, 1997, 32.7% of the assets available for benefits were
invested in Century Common Stock. Substantially all of the remaining
assets available for benefits were invested in mutual funds managed by
BGI.
(6) STOCK SPLIT
On February 25, 1998, Century Telephone Enterprises, Inc.'s Board of
Directors declared a three-for-two common stock split effected as a 50%
stock dividend in March 1998. Number of shares and per share data included
in this report for the Century Common Stock Fund have been restated to
reflect this stock split.
(7) SUBSEQUENT EVENT
Effective January 1, 1998, Merrill Lynch Trust Company, FSB (Merrill
Lynch) replaced BGI as Trustee of the Plan pursuant to Merrill Lynch's
acquisition of the MasterWorks Division of BGI on August 29, 1997.
Schedule I
CENTURY TELEPHONE ENTERPRISES, INC.
RETIREMENT SAVINGS PLAN FOR BARGAINING
UNIT EMPLOYEES AND TRUST
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1997
<TABLE>
<CAPTION>
Current
Identity of issuer, borrower, Description Current Value Per
lessor or similar party of Investment Cost Value Unit/Share
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment in Century Common Stock 76,831 units/ 22.39
51,800* shares $1,003,290 1,720,215 (Note 2) 33.21*
Loan Fund (interest rates ranged
from 9% to 12%) - 237,081 237,081 -
Barclays Global Investors
Money Market Account 30,867 units 30,867 30,867 1.00
Investments in Mutual Funds for
Qualified Employee Benefit
Plans Managed by Barclays
Global Investors:
S & P 500 Stock Fund 125,660 units 1,740,820 2,562,203 (Note 2) 20.39
Money Market Fund 372,605 units 372,605 372,605 (Note 2) 1.00
Bond Index Fund 30,424 units 292,189 296,326 (Note 2) 9.74
- -------------------------------------------------------------------------------------------------
$3,676,852 5,219,297
=================================================================================================
</TABLE>
Notes: (1) The above data is based on information which has been certified as
accurate and complete by the trustee, Barclays Global Investors.
Barclays Global Investors sponsors these funds and, accordingly,
is a party-in-interest. Additionally, Century Telephone Enterprises,
Inc., as sponsor of the Plan, is considered a party-in-interest.
(2) These investments are greater than 5% of assets available
for benefits.
* Adjusted to reflect stock split. See Note 6.
Schedule II
CENTURY TELEPHONE ENTERPRISES, INC.
RETIREMENT SAVINGS PLAN FOR BARGAINING
UNIT EMPLOYEES AND TRUST
Item 27d - Schedule of Reportable Transactions
For the Year Ended December 31, 1997
<TABLE>
<CAPTION>
Current Value of
Redemption Asset at Date of
Purchase or Selling Lease Expense Cost of Acquisition or Net
Description of Transaction Price Price Rental Incurred Asset Disposition Gain
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
(Note 2)
Category (3) - A series of
transactions in excess of 5%
of beginning of period Plan
assets available for benefits
Investments in Century Common
Stock (61 purchases, 33 sales) $ 262,594 168,352 - - 136,451 (Note 3) 31,901
Investments in Mutual Funds for
Qualified Employee Benefit
Plans Managed by Barclays
Global Investors:
S & P 500 Stock Fund (67
purchases, 36 sales) 756,076 369,555 - - 248,676 (Note 3) 120,879
Money Market Fund (49
purchases, 31 sales) 351,506 358,308 - - 358,308 (Note 3) -
</TABLE>
Notes: (1) The above data is based on information which has been certified
as accurate and complete by the trustee, Barclays Global
Investors. Barclays Global Investors sponsors these funds and,
accordingly, is a party-in-interest. Additionally, Century
Telephone Enterprises, Inc., as sponsor of the Plan, is
considered a party-in-interest.
(2) The purchase price denotes cost and current value of the
security on the transaction date.
(3) Current value is substantially the same as purchase price or
selling price of the security on the transaction date.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Retirement Committee has duly caused this annual report to be signed on its
behalf by the undersigned thereunto duly authorized.
Century Telephone Enterprises, Inc.
Retirement Savings Plan For Bargaining
Unit Employees and Trust
June 25, 1998 By: /s/ Ray B. Finney
----------------------
Ray B. Finney
Vice President, Human Resources
CENTURY TELEPHONE ENTERPRISES, INC.
RETIREMENT SAVINGS PLAN FOR BARGAINING UNIT
EMPLOYEES AND TRUST
Index to Exhibit
Exhibit
Number
---------------------------------------------------------------------------
23.1 Independent Auditors' Consent
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
-----------------------------
The Board of Directors
Century Telephone Enterprises, Inc.:
We consent to incorporation by reference in the Registration Statement (No.
33-46562) on Form S-8 of Century Telephone Enterprises, Inc. of our report dated
June 12, 1998, relating to the statements of assets available for benefits with
fund information of Century Telephone Enterprises, Inc. Retirement Savings Plan
for Bargaining Unit Employees and Trust as of December 31, 1997 and 1996, and
the related statement of changes in assets available for benefits with fund
information for the year ended December 31, 1997, and related financial
statement schedules as of and for the year ended December 31, 1997, which report
appears in the December 31, 1997 annual report on Form 11-K of Century Telephone
Enterprises, Inc. Retirement Savings Plan for Bargaining Unit Employees and
Trust.
KPMG PEAT MARWICK LLP
/s/ KPMG PEAT MARWICK LLP
Shreveport, Louisiana
June 25, 1998
