UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 27, 1999
CenturyTel, Inc
(Exact name of registrant as specified in its charter)
Louisiana 1-7784 72-0651161
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
100 Century Park Drive, Monroe, Louisiana 71203
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (318) 388-9500
Item 5. Other Events
The following press release was issued by Century Telephone Enterprises.
Inc. on July 27, 1999:
FOR IMMEDIATE RELEASE FOR MORE INFORMATION CONTACT:
July 27, 1999 Jeffrey S. Glover (318)388-9648
[email protected]
CenturyTel Achieves 24% Increase in Second Quarter Core Earnings
----------------------------------------------------------------
Monroe, LA. . . CenturyTel, Inc.(NYSE Symbol: CTL) announces operating results
for second quarter 1999.
o Revenues climbed 7.3% to $416.8 million.
o Net income, excluding the effect of asset sales, jumped 23.7% to $61.2
million.
o Diluted earnings per share, excluding the effect of asset sales, rose 22.9% to
$.43.
o Earnings before interest, taxes, depreciation, amortization and the effect of
asset sales advanced 8.0% to $225.5 million.
Second Quarter Highlights
(In thousands, except per share amounts)
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Quarter Ended Quarter Ended % Change
6/30/99 6/30/98
- -------------------------------------------------------------------------------
Revenues $ 416,750 $ 388,378 7.3%
EBITDA (1) $ 225,474 $ 208,727 8.0%
Net Income (2) $ 61,215 $ 49,486 23.7%
Diluted Earnings Per Share (2)(3) $ .43 $ .35 22.9%
Average Diluted Shares Outstanding (3) 141,461 140,028 1.0%
Telephone Revenues $ 279,113 $ 265,322 5.2%
Cellular Revenues $ 109,932 $ 104,871 4.8%
Other Operations Revenues $ 27,705 $ 18,185 52.4%
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Telephone Access Lines 1,246,593 1,237,469 0.7%
Cellular Units in
Majority-Owned Markets 640,755 583,929 9.7%
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(1) Earnings before interest, taxes, depreciation, amortization and the
effect of asset sales
(2) Excludes after-tax loss on asset sales of $7.8 million, or $.05 per
share, in second quarter 1999 and after-tax gains of $14.7 million, or
$.11 per share, in second quarter 1998
(3) Reflects a three-for-two stock split effected as a stock dividend
distributed March 31, 1999
-----------------------------------------------
"CenturyTel achieved several milestones during the second quarter,"
Glen F. Post, III, President and Chief Executive Officer, said. "Our
long distance customer base surpassed the quarter of a million mark
while operating and cash flow margins in our cellular operations
reached record levels. CenturyTel produced excellent financial
results driven by strength in our core operations along with debt
reductions resulting from the sale of nonstrategic assets and
free cash flow generation."
-----------------------------------------------
Net income for the quarter climbed 23.7% to $61.2 million from $49.5 million
----------
in second quarter 1998 excluding the effect of asset sales. Diluted earnings per
share, excluding the effect of asset sales, increased 22.9% to $.43 from $.35.
Consolidated revenues rose 7.3% to $416.8 million from $388.4 million. Earnings
before interest, taxes, depreciation, amortization and the effect of asset sales
(EBITDA) grew to $225.5 million from $208.7 million, an 8.0% increase.
CenturyTel achieved a consolidated EBITDA margin of 54.1% during the quarter.
"During the second quarter, CenturyTel took a number of strategic
steps to strengthen our core operations and better position the
company for future growth. We completed the divestiture of
substantially all of our Alaska operations as well as our South
Texas cellular operations. In addition, we announced the
acquisition of more than 230,000 access lines and the formation of
a joint venture to purchase another 125,000 access lines from GTE,"
Post said.
Telephone revenues grew 5.2% to $279.1 million during the quarter, compared
------------------
with $265.3 million in second quarter 1998. Telephone operating income increased
4.8%, reaching $83.8 million from $80.0 million, and operating cash flow rose
4.9% to $152.7 million from $145.5 million a year ago. The December 1998
Wisconsin access line purchase from Ameritech contributed $10.9 million to
telephone revenues during the quarter. In mid-quarter, CenturyTel divested
134,900 access lines in the state of Alaska. The sale resulted in a decrease in
telephone revenues of $14.4 million during the quarter compared with the prior
year period. CenturyTel's second quarter telephone operating cash flow margin
was 54.7% while the operating income margin was 30.0%. Excluding the sale of the
Alaska properties, telephone revenues rose 11.9% during the quarter.
Cellular revenues grew 4.8% to $109.9 million in second quarter 1999,
-----------------
compared with $104.9 million in second quarter 1998. Cellular operating income
advanced 14.0%, reaching $42.8 million from $37.5 million, and operating cash
flow climbed 11.7% to $58.8 million from $52.7 million a year ago. CenturyTel's
second quarter cellular operating cash flow margin was 53.5% (54.8% based on
service revenues), and operating income margin was 38.9% (39.8% based on service
revenues). Average monthly cellular service revenue per user (ARPU) was $56
during second quarter 1999, a 5.1% decrease from $59 a year ago. During the
quarter, CenturyTel divested its South Texas cellular operations and one of its
Alaska cellular RSAs. As a result, CenturyTel divested 10,500 cellular
subscribers in these markets which led to a $511,000 revenue reduction compared
with the prior year period. Excluding these dispositions, cellular net additions
were more than 12,300 for the quarter, while the average monthly churn rate was
1.7%.
"During the second quarter, CenturyTel achieved record levels of
profitability in our cellular operations. Subscriber growth
accelerated over prior year levels, and average monthly churn
fell to a company record low 1.7%," Post said.
Revenues from other operations grew 52.4% to $27.7 million during second
------------------------------
quarter 1999, compared with $18.2 million in second quarter 1998. CenturyTel now
serves more than 259,000 long distance customers, adding more than 17,000 during
the quarter.
During the first six months of 1999, net income excluding the effect of
-----------------------------------
asset sales climbed 26.5% to $115.6 million from $91.4 million in 1998. Diluted
earnings per share, excluding the effect of asset sales, increased 24.2% to $.82
from $.66, and consolidated revenues rose 9.3% to $831.0 million from $760.1
million. Earnings before interest, taxes, depreciation, amortization and the
effect of asset sales (EBITDA) grew to $451.8 million from $402.9 million, a
12.1% increase.
In addition to historical information, this release includes certain
forward-looking statements that are subject to uncertainties that could cause
the Company's actual results to differ materially from such statements. Such
uncertainties include but are not limited to: the effects of ongoing
deregulation in the telecommunications industry; the effects of greater than
anticipated competition in the Company's markets; possible changes in the demand
for the Company's products and services; the Company's ability to successfully
introduce new offerings on a timely and cost-effective basis; the risks inherent
in rapid technological change; the Company's ability to effectively manage its
growth, including integrating newly-acquired properties into the Company's
operations; the success and expense of the remediation efforts of the Company
and its vendors in achieving year 2000 compliance; and the effects of more
general factors such as changes in overall market or economic conditions or in
legislation, regulation or public policy. These and other uncertainties related
to the Company's business are described in greater detail in the Company's
Annual Report on Form 10-K for the year ended December 31, 1998.
CenturyTel, Inc. provides integrated communications services including local
exchange, wireless, long distance, Internet access and security monitoring
services to more than two million customers in 21 states. The company,
headquartered in Monroe, Louisiana, is publicly traded on the New York Stock
Exchange under the symbol CTL. CenturyTel is the 9th largest local exchange
telephone company, based on access lines, and the 10th largest cellular company,
based on population equivalents owned, in the United States. Visit CenturyTel's
corporate website at (www.centurytel.com)
CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED JUNE 30, 1999 AND 1998
(UNAUDITED)
<TABLE>
<CAPTION>
INCREASE
In thousands, except per share amounts 1999 1998 (DECREASE)
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
TELEPHONE OPERATIONS
Operating revenues
Local service $ 89,452 81,456 9.8%
Network access 155,789 151,976 2.5%
Other 33,872 31,890 6.2%
- ----------------------------------------------------------------
279,113 265,322 5.2%
- ----------------------------------------------------------------
Operating expenses
Plant operations 63,492 57,548 10.3%
Customer operations 24,001 23,033 4.2%
Corporate and other 38,916 39,225 (0.8%)
Depreciation and amortization 68,938 65,562 5.1%
- ----------------------------------------------------------------
195,347 185,368 5.4%
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Telephone operating income 83,766 79,954 4.8%
- ----------------------------------------------------------------
CELLULAR OPERATIONS
Operating revenues
Service revenues 107,405 102,766 4.5%
Equipment sales 2,527 2,105 20.0%
- ----------------------------------------------------------------
109,932 104,871 4.8%
- ----------------------------------------------------------------
Operating expenses
Cost of equipment sold 5,254 3,702 41.9%
System operations 14,438 14,633 (1.3%)
General, administrative and
customer service 18,470 20,063 (7.9%)
Sales and marketing 12,922 13,791 (6.3%)
Depreciation and amortization 16,095 15,171 6.1%
- ----------------------------------------------------------------
67,179 67,360 (0.3%)
- ----------------------------------------------------------------
Cellular operating income 42,753 37,511 14.0%
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OTHER OPERATIONS
Operating revenues 27,705 18,185 52.4%
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Operating expenses
Cost of sales and other 22,620 13,411 68.7%
Depreciation and amortization 979 751 30.4%
- ----------------------------------------------------------------
23,599 14,162 66.6%
- ----------------------------------------------------------------
Other operating income 4,106 4,023 2.1%
- ----------------------------------------------------------------
TOTAL OPERATING INCOME 130,625 121,488 7.5%
OTHER INCOME (EXPENSE)
Gain on sales of assets 39,601 25,516 55.2%
Interest expense (37,487) (42,072) (10.9%)
Income from unconsolidated
cellular entities 9,267 9,066 2.2%
Minority interest (18,790) (4,002) 369.5%
Other income and expense 3,434 691 397.0%
Income tax expense (73,188) (46,496) 57.4%
- ----------------------------------------------------------------
NET INCOME $ 53,462 64,191 (16.7%)
================================================================
EARNINGS PER SHARE (1)
Basic (2) $ 0.38 0.47 (19.1%)
Diluted (3) $ 0.38 0.46 (17.4%)
SHARES OUTSTANDING (1)
Basic 138,852 136,922 1.4%
Diluted 141,461 140,028 1.0%
DIVIDENDS PER COMMON SHARE (1) $ 0.0450 0.0433 3.9%
(1) Reflects a three-for-two stock split effected as a stock dividiend
distributed March 31, 1999
(2) Excluding the effect of asset sales, basic earnings per share were $.44
and $.36 for 1999 and 1998, respectively
(3) Excluding the effect of asset sales, diluted earnings per share were $.43
and $.35 for 1999 and 1998, respectively
</TABLE>
CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30, 1999 AND 1998
(UNAUDITED)
<TABLE>
<CAPTION>
INCREASE
In thousands, except per share amounts 1999 1998 (DECREASE)
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
TELEPHONE OPERATIONS
Operating revenues
Local service $ 180,109 159,582 12.9%
Network access 322,944 303,154 6.5%
Other 69,021 62,399 10.6%
- ----------------------------------------------------------------
572,074 525,135 8.9%
- ----------------------------------------------------------------
Operating expenses
Plant operations 130,514 114,207 14.3%
Customer operations 45,895 45,849 0.1%
Corporate and other 75,835 79,008 (4.0%)
Depreciation and amortization 140,766 129,274 8.9%
- ----------------------------------------------------------------
393,010 368,338 6.7%
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Telephone operating income 179,064 156,797 14.2%
- ----------------------------------------------------------------
CELLULAR OPERATIONS
Operating revenues
Service revenues 203,381 194,864 4.4%
Equipment sales 5,022 4,173 20.3%
- ----------------------------------------------------------------
208,403 199,037 4.7%
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Operating expenses
Cost of equipment sold 9,635 7,398 30.2%
System operations 27,741 28,885 (4.0%)
General, administrative and
customer service 37,630 38,444 (2.1%)
Sales and marketing 26,935 27,433 (1.8%)
Depreciation and amortization 33,326 29,711 12.2%
- ----------------------------------------------------------------
135,267 131,871 2.6%
- ----------------------------------------------------------------
Cellular operating income 73,136 67,166 8.9%
- ----------------------------------------------------------------
OTHER OPERATIONS
Operating revenues 50,529 35,926 40.6%
- ----------------------------------------------------------------
Operating expenses
Cost of sales and other 39,580 26,576 48.9%
Depreciation and amortization 1,901 1,693 12.3%
- ----------------------------------------------------------------
41,481 28,269 46.7%
- ----------------------------------------------------------------
Other operating income 9,048 7,657 18.2%
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TOTAL OPERATING INCOME 261,248 231,620 12.8%
OTHER INCOME (EXPENSE)
Gain on sales of assets 49,959 49,859 0.2%
Interest expense (79,728) (84,881) (6.1%)
Income from unconsolidated
cellular entities 16,112 15,943 1.1%
Minority interest (22,100) (6,645) 232.6%
Other income and expense 5,614 1,295 333.5%
Income tax expense (116,538) (85,306) 36.6%
- ----------------------------------------------------------------
NET INCOME $ 114,567 121,885 (6.0%)
================================================================
EARNINGS PER SHARE (1)
Basic (2) $ 0.83 0.89 (6.7%)
Diluted (3) $ 0.81 0.87 (6.9%)
SHARES OUTSTANDING (1)
Basic 138,455 136,686 1.3%
Diluted 141,245 139,701 1.1%
DIVIDENDS PER COMMON SHARE (1) $ 0.0900 0.0866 3.9%
(1) Reflects a three-for-two stock split effected as a stock dividiend
distributed March 31, 1999
(2) Excluding the effect of asset sales, basic earnings per share were $.83
and $.67 for 1999 and 1998, respectively
(3) Excluding the effect of asset sales, diluted earnings per share were
$.82 and $.66 for 1999 and 1998, respectively
</TABLE>
CenturyTel, Inc.
CONSOLIDATED BALANCE SHEETS
JUNE 30, 1999 AND DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
- ------------------------------------------------------------------------
(in thousands)
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 93,893 5,742
Other current assets 222,141 220,496
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Total current assets 316,034 226,238
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PROPERTY, PLANT AND EQUIPMENT
Telephone 3,311,544 3,660,252
Cellular 434,285 428,984
Other 233,451 200,422
Accumulated depreciation (1,797,761) (1,938,205)
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Net property, plant and equipment 2,181,519 2,351,453
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INVESTMENTS AND OTHER ASSETS
Excess cost of net assets acquired 1,625,044 1,956,701
Other 436,116 401,063
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Total investments and other assets 2,061,160 2,357,764
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TOTAL ASSETS $ 4,558,713 4,935,455
========================================================================
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 53,360 53,010
Other current liabilities 376,800 251,834
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Total current liabilities 430,160 304,844
LONG-TERM DEBT 2,017,472 2,558,000
DEFERRED CREDITS AND OTHER LIABILITIES 461,930 541,129
STOCKHOLDERS' EQUITY 1,649,151 1,531,482
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TOTAL LIABILITIES AND EQUITY $ 4,558,713 4,935,455
========================================================================
</TABLE>
CAPITAL EXPENDITURES
SIX MONTHS ENDED JUNE 30, 1999 AND 1998
<TABLE>
<CAPTION>
INC
1999 1998 (DEC)
- -------------------------------------------------------------------
<S> <C> <C> <C>
Telephone $ 86,624 78,055 11.0%
Cellular 29,042 34,300 (15.3%)
Corporate and other 33,462 14,065 137.9%
- --------------------------------------------------------
Total capital expenditures $ 149,128 126,420 18.0%
========================================================
</TABLE>
CAPITAL EXPENDITURES
THREE MONTHS ENDED JUNE 30, 1999 AND 1998
<TABLE>
<CAPTION>
INC
1999 1998 (DEC)
- -------------------------------------------------------------------
<S> <C> <C> <C>
Telephone $ 48,320 42,768 13.0%
Cellular 21,879 16,168 35.3%
Corporate and other 15,928 4,880 226.4%
- ------------------------------------------------------
Total capital expenditures $ 86,127 63,816 35.0%
======================================================
</TABLE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
CENTURY TELEPHONE ENTERPRISES, INC.
By: /s/ Neil A. Sweasy
-------------------------
Neil A. Sweasy
Vice President and Controller
