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, 1998
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.
DOLLARS AND SENSE PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
CENTURYTEL, INC.
100 CENTURY PARK DRIVE
MONROE, LA 71203
<PAGE>
Independent Auditors' Report
----------------------------
The Board of Directors
CenturyTel, Inc.:
We have audited the accompanying statements of assets available for benefits
with fund information of Century Telephone Enterprises, Inc. Dollars and Sense
Plan as of December 31, 1998 and 1997, and the related statement of changes in
assets available for benefits with fund information for the year ended December
31, 1998. 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. Dollars and Sense Plan as of December 31, 1998 and 1997, and
the changes in assets available for benefits for the year ended December 31,
1998, 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 LLP
/S/ KPMG LLP
Shreveport, Louisiana
June 11, 1999
2
<PAGE>
CENTURY TELEPHONE ENTERPRISES, INC.
DOLLARS AND SENSE PLAN
Statement of Assets Available for Benefits With Fund Information
December 31, 1998
<TABLE>
<CAPTION>
CenturyTel Asset Growth Money Bond
Common S & P 500 Allocation Stock Loan Market Index
Stock Fund Stock Fund Fund Fund Fund Fund Fund Sub-total
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PLAN ASSETS
Investments, at
fair value $95,609,614 39,094,971 24,636,440 - 6,934,947 16,371,330 4,907,828 187,555,130
Cash 1,117,790 - - - - - - 1,117,790
Contributions
receivable -
employer 687,035 - - - - - - 687,035
Contributions
receivable -
participants 7,055 6,829 1,126 - - 342 417 15,769
- --------------------------------------------------------------------------------------------------------------------
ASSETS AVAILABLE
FOR BENEFITS $97,421,494 39,101,800 24,637,566 - 6,934,947 16,371,672 4,908,245 189,375,724
====================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Norwest Large
Lifepath Lifepath Lifepath Lifepath Lifepath Company Sweep Combined
Sub-total 2000 Fund 2010 Fund 2020 Fund 2030 Fund 2040 Fund Growth Fund Account Funds
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PLAN ASSETS
Investments, at
fair value $187,555,130 536,167 2,450,427 1,921,73 1,617,350 3,374,821 13,334,550 - 210,790,176
Cash 1,117,790 - - - - - - - 1,117,790
Contributions
receivable -
employer 687,035 - - - - - - - 687,035
Contributions
receivable -
participants 15,769 134 259 52 637 1,454 3,798 - 22,103
- ----------------------------------------------------------------------------------------------------------------------------------
ASSETS AVAILABLE
FOR BENEFITS $189,375,724 536,301 2,450,686 1,921,783 1,617,987 3,376,275 13,338,348 - 212,617,104
==================================================================================================================================
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
CENTURY TELEPHONE ENTERPRISES, INC.
DOLLARS AND SENSE PLAN
Statement of Assets Available for Benefits With Fund Information
December 31, 1997
<TABLE>
<CAPTION>
CenturyTel Asset Growth Money Bond
Common S & P 500 Allocation Stock Loan Market Index
Stock Fund Stock Fund Fund Fund Fund Fund Fund Sub-total
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PLAN ASSETS
Investments,
at fair value $39,314,118 10,877,636 8,679,893 8,377,309 4,000,875 3,706,499 1,386,612 76,342,942
Cash 545,485 - - - - - - 545,485
Contributions
receivable -
employer 481,963 - - - - - - 481,963
Contributions
receivable -
participants 4,722 7,906 2,839 4,007 - 142,629 814 162,917
- ----------------------------------------------------------------------------------------------------------------------
ASSETS AVAILABLE
FOR BENEFITS $40,346,288 10,885,542 8,682,732 8,381,316 4,000,875 3,849,128 1,387,426 77,533,307
======================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Lifepath Lifepath Lifepath Lifepath Lifepath Sweep Combined
Sub-total 2000 Fund 2010 Fund 2020 Fund 2030 Fund 2040 Fund Account Funds
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PLAN ASSETS
Investments,
at fair value $76,342,942 23,830 713,776 621,617 329,248 961,110 - 78,992,523
Cash 545,485 - - - - - - 545,485
Contributions
receivable -
employer 481,963 - - - - - - 481,963
Contributions
receivable -
participants 162,917 - 118 2,978 1,244 893 - 168,150
- --------------------------------------------------------------------------------------------------------------------
ASSETS AVAILABLE
FOR BENEFITS $77,533,307 23,830 713,894 624,595 330,492 962,003 - 80,188,121
====================================================================================================================
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
CENTURY TELEPHONE ENTERPRISES, INC.
DOLLARS AND SENSE PLAN
Statement of Changes in Assets Available for Benefits With Fund Information
For the Year Ended December 31, 1998
<TABLE>
<CAPTION>
CenturyTel Asset Growth Money Bond
Common S & P 500 Allocation Stock Loan Market Index
Stock Fund Stock Fund Fund Fund Fund Fund Fund Sub-total
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to assets:
Investment income
Net appreciation
(depreciation) in fair
value of investments $ 45,904,201 6,486,715 2,307,232 (2,464,113) - - 73,420 52,307,455
Other income - 2,279,822 2,821,032 2,698,282 - 526,262 252,287 8,577,685
Interest income 45,815 - - - 780,409 - - 826,224
Dividends - Common Stock
of CenturyTel, Inc. 349,687 - - - - - - 349,687
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income 46,299,703 8,766,537 5,128,264 234,169 780,409 526,262 325,707 62,061,051
- ----------------------------------------------------------------------------------------------------------------------------------
Contributions
Transfer from acquired
subsidiary's plan - 21,141,926 13,701,038 6,725,308 3,399,458 8,003,342 2,773,472 55,744,544
Participants 2,367,835 3,080,449 1,332,963 1,315,778 - 506,929 237,903 8,841,857
Company 4,364,053 - - - - - - 4,364,053
- ----------------------------------------------------------------------------------------------------------------------------------
Total contributions 6,731,888 24,222,375 15,034,001 8,041,086 3,399,458 8,510,271 3,011,375 68,950,454
- ----------------------------------------------------------------------------------------------------------------------------------
Total additions 53,031,591 32,988,912 20,162,265 8,275,255 4,179,867 9,036,533 3,337,082 131,011,505
- ----------------------------------------------------------------------------------------------------------------------------------
Deductions from assets:
Participant withdrawals 6,538,718 4,681,038 2,364,519 1,658,764 822,649 2,691,744 521,919 19,279,351
Other, net (19,402) 1,857 11,391 4,879 - (77,767) (15,376) (94,418)
- ----------------------------------------------------------------------------------------------------------------------------------
Total deductions 6,519,316 4,682,895 2,375,910 1,663,643 822,649 2,613,977 506,543 19,184,933
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
prior to interfund
transfers 46,512,275 28,306,017 17,786,355 6,611,612 3,357,218 6,422,556 2,830,539 111,826,572
Interfund transfers 10,562,931 (89,759) (1,831,521)(14,992,928) (423,146) 6,099,988 690,280 15,845
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) 57,075,206 28,216,258 15,954,834 (8,381,316) 2,934,072 12,522,544 3,520,819 111,842,417
Assets available
for benefits:
Beginning of year 40,346,288 10,885,542 8,682,732 8,381,316 4,000,875 3,849,128 1,387,426 77,533,307
- ----------------------------------------------------------------------------------------------------------------------------------
End of year $ 97,421,494 39,101,800 24,637,566 - 6,934,947 16,371,672 4,908,245 189,375,724
==================================================================================================================================
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
CENTURY TELEPHONE ENTERPRISES, INC.
DOLLARS AND SENSE PLAN
Statement of Changes in Assets Available for Benefits
With Fund Information, Continued
For the Year Ended December 31, 1998
<TABLE>
<CAPTION>
Norwest Large
Lifepath Lifepath Lifepath Lifepath Lifepath Company PacifiCorp Sweep Combined
Sub-total 2000 Fund 2010 Fund 2020 Fund 2030 Fund 2040 Fund Growth Fund Stock Fund Account Funds
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to assets:
Investment income
Net appreciation
(depreciation)
in fair value
of investments $ 52,307,455 (788) 162,347 181,863 178,280 447,767 1,174,469 (2,824,802) - 51,626,591
Other income 8,577,685 25,490 158,167 132,464 89,231 214,062 - - - 9,197,099
Interest income 826,224 - - - - - - - 29,734 855,958
Dividends -
Common Stock
of CenturyTel,Inc. 349,687 - - - - - - - - 349,687
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment
income 62,061,051 24,702 320,514 314,327 267,511 661,829 1,174,469 (2,824,802) 29,734 62,029,335
- -----------------------------------------------------------------------------------------------------------------------------------
Contributions
Transfer from
acquired sub-
sidiary's plan 55,744,544 88,844 1,261,021 1,072,268 746,087 1,342,388 - 16,712,156 - 76,967,308
Participants 8,841,857 34,830 204,257 315,919 317,265 682,157 145,684 - (55) 10,541,914
Company 4,364,053 - - - - - - - 4,364,053
- -----------------------------------------------------------------------------------------------------------------------------------
Total contri-
butions 68,950,454 123,674 1,465,278 1,388,187 1,063,352 2,024,545 145,684 16,712,156 (55) 91,873,275
- -----------------------------------------------------------------------------------------------------------------------------------
Total additions 131,011,505 148,376 1,785,792 1,702,514 1,330,863 2,686,374 1,320,153 13,887,354 29,679 153,902,610
- -----------------------------------------------------------------------------------------------------------------------------------
Deductions from
assets:
Participant
withdrawals 19,279,351 73,417 146,623 312,598 230,695 303,811 24,437 1,165,864 53,255 21,590,051
Other, net (94,418) 36 (27,904) 199 167 526 664 4,085 221 (116,424)
- -----------------------------------------------------------------------------------------------------------------------------------
Total
deductions 19,184,933 73,453 118,719 312,797 230,862 304,337 25,101 1,169,949 53,476 21,473,627
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease) prior
to interfund
transfers 111,826,572 74,923 1,667,073 1,389,717 1,100,001 2,382,037 1,295,052 12,717,405 (23,797) 132,428,983
Interfund transfers 15,845 437,548 69,719 (92,529) 187,494 32,235 12,043,296 (12,717,405) 23,797 -
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase
(decrease) 111,842,417 512,471 1,736,792 1,297,188 1,287,495 2,414,272 13,338,348 - - 132,428,983
Assets available
for benefits:
Beginning of year 77,533,307 23,830 713,894 624,595 330,492 962,003 - - - 80,188,121
- -----------------------------------------------------------------------------------------------------------------------------------
End of year $189,375,724 536,301 2,450,686 1,921,783 1,617,987 3,376,275 13,338,348 - - 212,617,104
===================================================================================================================================
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
CENTURY TELEPHONE ENTERPRISES, INC.
DOLLARS AND SENSE PLAN
Notes to Financial Statements
December 31, 1998
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PROVISIONS OF THE PLAN
Basis of Presentation
The Century Telephone Enterprises, Inc. Dollars and Sense Plan (the Plan)
was established on May 1, 1986. 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 of CenturyTel, Inc.
and its participating subsidiaries (the Company), other than those who are
classified as temporary employees or employees covered under a collective
bargaining agreement.
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
compensation. The percentage of compensation a participant elects to defer
applies to the participant's base pay plus certain incentive compensation
received, including certain cash bonuses, commissions, and lump sums
granted in lieu of pay increases. The amount of compensation deferred by
each participant is credited to an account (Participant Contribution
Account) maintained for each participant by the Trustee. The Participant
Contribution Account is self-directed.
As of the end of each payroll period, the Company contributes to an account
(Employer 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 compensation contributed to the Plan. The Board of Directors
of the Company may, at its discretion, elect at the end of each year to
contribute an additional amount to the Plan. Company contributions may be
made in cash or CenturyTel, Inc. Common Stock (CenturyTel Common Stock). If
made in cash, such cash is applied by the Trustee to the purchase of
CenturyTel Common Stock.
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, his
Participant Rollover Account and his Employer Contribution Account is fully
vested and non-forfeitable at all times.
Reports to Participants
All participants are furnished with quarterly statements which set forth
the status of their accounts in the Plan.
7
<PAGE>
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 entire interest in the Plan may 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 and over age 59 1/2 may make withdrawals
from his vested accounts prior to meeting normal distribution requirements.
In addition, a withdrawal 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. 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.
Plan Termination
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of the Employee Retirement
Income Security Act of 1974.
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 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, 1998, was Merrill Lynch Trust
Company, FSB (Merrill Lynch). 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 CenturyTel Common Stock are valued at the closing market
quote on December 31, 1998 and 1997, 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.
8
<PAGE>
(2) DESCRIPTION OF THE FUNDS
The following is a description of each of the funds available to Plan
participants as of December 31, 1998:
(a) CenturyTel Common Stock Fund - consists primarily of shares of
CenturyTel Common Stock (45.0% and 49.0% of assets at December 31,
1998 and 1997, respectively).
(b) 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
(18.4% and 13.6% of assets at December 31, 1998 and 1997,
respectively).
(c) Asset Allocation Fund - consists primarily of investments in common
stocks, U. S. Treasury bonds and money market instruments (11.6% and
10.8% of assets at December 31, 1998 and 1997, respectively).
(d) Loan Fund - represents loans to participants from the participants'
investment accounts (3.3% and 5.0% of assets at December 31, 1998 and
1997, respectively).
(e) Money Market Fund - consists primarily of short-term investments in
various money market instruments (7.7% and 4.6% of assets at
December 31, 1998 and 1997, respectively).
(f) Bond Index Fund - consists primarily of investments in government and
corporate bonds (2.3% and 1.7% of assets at December 31, 1998 and
1997, respectively).
(g) Lifepath 2000 Fund - consists primarily of investments in U.S. and
foreign equity and debt securities and money market instruments and is
managed for investors planning to retire (or begin to withdraw
substantial portions of their investment) around the year 2000 (.3% and
.03% of assets at December 31, 1998 and 1997, respectively).
(h) Lifepath 2010 Fund - consists primarily of investments in U.S. and
foreign equity and debt securities and money market instruments and is
managed for investors planning to retire (or begin to withdraw
substantial portions of their investment) around the year 2010 (1.2%
and .9% of assets at December 31, 1998 and 1997, respectively).
(i) Lifepath 2020 Fund - consists primarily of investments in U.S. and
foreign equity and debt securities and money market instruments and is
managed for investors planning to retire (or begin to withdraw
substantial portions of their investment) around the year 2020 (.9% and
.8% of assets at December 31, 1998 and 1997, respectively).
(j) Lifepath 2030 Fund - consists primarily of investments in U.S. and
foreign equity and debt securities and money market instruments and is
managed for investors planning to retire (or begin to withdraw
substantial portions of their investment) around the year 2030 (.8% and
.4% of assets at December 31, 1998 and 1997, respectively).
(k) Lifepath 2040 Fund - consists primarily of investments in U.S. and
foreign equity and debt securities and money market instruments and is
managed for investors planning to retire (or begin to withdraw
substantial portions of their investment) around the year 2040 (1.6%
and 1.2% of assets at December 31, 1998 and 1997, respectively).
(l) Norwest Large Company Growth Fund - consists primarily of investments
in common stocks (6.3% of assets at December 31, 1998).
9
<PAGE>
A participant may instruct that his contribution be allocated among the
various funds. A participant may change his investment allocation
instructions at any time, however, a participant can only change his
contribution percentage on a quarterly basis.
All amounts allocated to a participant's Employer Contribution Account are
invested in CenturyTel Common Stock. Participants who have not attained age
55 have no power to transfer amounts in the Employer Contribution Account
to an investment fund other than the CenturyTel Common Stock Fund.
Participants who have attained age 55 may redirect the investment of the
balance in their Employer Contribution Account.
(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 July 1996 related
to the Plan.
(4) RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by Barclays
Global Fund Advisors (Barclays) or Peregrine Capital Management
(Peregrine). Merrill Lynch is the Trustee as defined by the Plan.
Therefore, Barclays, Merrill Lynch and Peregrine qualify as
parties-in-interest. Fees paid by the Company to Merrill Lynch for trustee,
record keeping and other services amounted to $275,799 for the year ended
December 31, 1998.
(5) TRANSFER FROM ACQUIRED SUBSIDIARY'S PLAN
On December 1, 1997, the Company acquired Pacific Telecom, Inc. (PTI) and
PTI employees were thus eligible to contribute to the Plan. Prior to the
acquisition, PTI employees were eligible to participate in the PacifiCorp K
Plus Employee Stock Ownership Plan (PacifiCorp Plan). In January 1998 the
PacifiCorp Plan assets for active PTI employees were transferred to the
Plan through a plan-to-plan transaction. The total PacifiCorp Plan account
balances and outstanding loans transferred to the Plan was $76,967,308.
(6) CONCENTRATION OF INVESTMENTS
As of December 31, 1998, 45.0% of the assets available for benefits were
invested in CenturyTel Common Stock. Substantially all of the remaining
assets available for benefits were invested in mutual funds managed by
Barclays or Peregrine.
(7) COMPANY/PARTICIPANT DIRECTED FUNDS
The CenturyTel Common Stock Fund includes contributions from the Company
and participants. Participant contributions are directed solely by the
participants. Contributions from the Company are directed by the Company,
except for contributions made on behalf of participants who are age 55 or
older. Such contributions can be redirected by these participants to the
funds of their choice. All other funds are participant directed.
The following Statements of Assets Available for Benefits - CenturyTel
Common Stock Fund and Statement of Changes in Assets Available for Benefits
- CenturyTel Common Stock Fund, which include estimates made by Merrill
Lynch, detail the Company directed and Participant directed portions of the
CenturyTel Common Stock Fund.
10
<PAGE>
CENTURY TELEPHONE ENTERPRISES, INC.
DOLLARS AND SENSE PLAN
Notes to Financial Statements
Statements of Assets Available for Benefits - CenturyTel Common Stock Fund
<TABLE>
<CAPTION>
Total
Company Participant CenturyTel Common
December 31, 1998 Directed Portion Directed Portion Stock Fund
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PLAN ASSETS
Investments $ 44,945,102 50,664,512 95,609,614
Cash 525,361 592,429 1,117,790
Contributions receivable - employer 687,035 - 687,035
Contributions receivable - employee - 7,055 7,055
- --------------------------------------------------------------------------------------------------
ASSETS AVAILABLE FOR BENEFITS $ 46,157,498 51,263,996 97,421,494
==================================================================================================
December 31, 1997
- --------------------------------------------------------------------------------------------------
PLAN ASSETS
Investments $ 21,936,299 17,377,819 39,314,118
Cash 304,381 241,104 545,485
Contributions receivable - employer 481,963 - 481,963
Contributions receivable - employee - 4,722 4,722
- --------------------------------------------------------------------------------------------------
ASSETS AVAILABLE FOR BENEFITS $ 22,722,643 17,623,645 40,346,288
==================================================================================================
</TABLE>
11
CENTURY TELEPHONE ENTERPRISES, INC.
DOLLARS AND SENSE PLAN
Notes to Financial Statements
Statement of Changes in Assets Available for
Benefits - CenturyTel Common Stock Fund
For the Year Ended December 31, 1998
<TABLE>
<CAPTION>
Total
Company Participant CenturyTel Common
Directed Portion Directed Portion Stock Fund
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Additions to assets:
Investment income
Net appreciation in
fair value of
investments $ 22,349,546 23,554,655 45,904,201
Interest income 21,533 24,282 45,815
Dividends-Common
Stock of CenturyTel,Inc. 164,353 185,334 349,687
- --------------------------------------------------------------------------------
Net investment income 22,535,432 23,764,271 46,299,703
- --------------------------------------------------------------------------------
Contributions
Participants - 2,367,835 2,367,835
Company 4,364,053 - 4,364,053
- --------------------------------------------------------------------------------
Total contributions 4,364,053 2,367,835 6,731,888
- --------------------------------------------------------------------------------
Total additions 26,899,485 26,132,106 53,031,591
- --------------------------------------------------------------------------------
Deductions from assets:
Participant withdrawals 3,512,124 3,026,594 6,538,718
Other, net (28,861) 9,459 (19,402)
- --------------------------------------------------------------------------------
Total deductions 3,483,263 3,036,053 6,519,316
- --------------------------------------------------------------------------------
Net increase prior to
interfund transfers 23,416,222 23,096,053 46,512,275
Interfund transfers 18,633 10,544,298 10,562,931
- --------------------------------------------------------------------------------
Net increase 23,434,855 33,640,351 57,075,206
Net assets available
for benefits:
Beginning of year 22,722,643 17,623,645 40,346,288
- --------------------------------------------------------------------------------
End of year $ 46,157,498 51,263,996 97,421,494
================================================================================
</TABLE>
(8) STOCK SPLIT
On February 23, 1999, CenturyTel, Inc.'s Board of Directors declared a
three-for-two common stock split effected as a 50% stock dividend in March
1999. Number of shares and per share data included in this report for the
CenturyTel Common Stock Fund have been restated to reflect this stock
split.
(9) YEAR 2000 READINESS DISCLOSURE (UNAUDITED)
The Year 2000 issue concerns the inability of computer systems and certain
other equipment to properly recognize and process data that uses two digits
rather than four to designate particular years. The Company has initiated a
Year 2000 Project Plan (the "Project") to assess whether its systems that
process date sensitive information will perform satisfactorily
12
<PAGE>
leading up to and beyond January 1, 2000. The goal of the Project is to
correct, prior to January 1, 2000, any Year 2000-related problem with
critical systems, the failure of which could have a material adverse effect
on the Company's operations. The Project includes steps to (i) identify
each critical system element that requires date code remediation, (ii)
establish a plan to remediate such systems, (iii) implement all required
remediations and (iv) selectively test the remediated systems.
One component of the Project involves the review of third-party vendors and
includes identifying critical third-parties and determining their plans and
progress in addressing the Year 2000 issue. One critical third-party for
the Plan is Merrill Lynch, which handles record keeping and administrative
duties as Trustee. Current information received from Merrill Lynch
indicates that their system that supports the Plan has been fully
renovated, has completed production testing and is undergoing certification
testing which is anticipated to be completed mid-year 1999.
Failure by the Company to timely and effectively remediate its systems, or
the failure of critical vendors and suppliers to remediate affected
systems, could have a material adverse impact on the Plan. Because the
impact of Year 2000 issues on the Company is materially dependent on the
mitigation efforts of parties outside the Company's control, the Company
cannot assess with certainty the magnitude of any such potential adverse
impact on the Plan. However, the Company believes that the Project, along
with the efforts of Merrill Lynch, is expected to significantly reduce the
level of uncertainty about the Year 2000 issue, and in particular, about
the Year 2000 readiness of the Plan's critical third-parties.
(10) SUBSEQUENT EVENTS
Effective January 1, 1999, the Company increased its matching contribution
to 55% of each participant's contribution during a payroll period; however,
this matching contribution shall only apply to the first 6% of each
participant's compensation. Also effective January 1, 1999, the maximum
pre-tax deferral of compensation has been increased to 12% from 10%.
13
<PAGE>
Schedule I
CENTURY TELEPHONE ENTERPRISES, INC.
DOLLARS AND SENSE PLAN
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1998
<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 CenturyTel
Common Stock 2,099,119 units/ 45.55
2,124,658* shares $35,917,792 95,609,614 (Note 1) 45.00*
Loan Fund (interest rates
ranged from 6.9% to 12%) - 6,934,947 6,934,947 -
Merrill Lynch
Money Market Account 1,117,790 units 1,117,790 1,117,790 1.00
Investments in Mutual Funds
for Qualified Employee
Benefit Plans Managed
by Barclays:
S & P 500 Stock Fund 1,588,581 units 30,708,875 39,094,971 (Note 1) 24.61
Asset Allocation Fund 1,742,322 units 21,859,935 24,636,440 (Note 1) 14.14
Money Market Fund 16,371,330 units 16,371,330 16,371,330 (Note 1) 1.00
Bond Index Fund 490,292 units 4,829,000 4,907,828 10.01
Lifepath 2000 Fund 46,062 units 537,194 536,167 11.64
Lifepath 2010 Fund 170,169 units 2,250,052 2,450,427 14.40
Lifepath 2020 Fund 116,610 units 1,738,514 1,921,731 16.48
Lifepath 2030 Fund 86,351 units 1,440,905 1,617,350 18.73
Lifepath 2040 Fund 166,002 units 2,992,248 3,374,821 20.33
Investments in Mutual Funds
for Qualified Employee
Benefit Plans Managed
by Peregrine:
Norwest Large Company
Growth Fund 244,760 units 11,910,098 13,334,550 (Note 1) 54.48
- --------------------------------------------------------------------------------------------
$138,608,680 211,907,966
============================================================================================
</TABLE>
The above data is based on information which has been certified as accurate and
complete by the trustee, Merrill Lynch. Barclays, Merrill Lynch and Peregrine
are considered parties-in-interest. Additionally, CenturyTel, Inc., as sponsor
of the Plan, is considered a party-in-interest.
Note (1) These investments are greater than 5% of assets available for benefits.
* Adjusted to reflect stock split. See Note 7.
14
<PAGE>
Schedule II
CENTURY TELEPHONE ENTERPRISES, INC.
DOLLARS AND SENSE PLAN
Item 27d - Schedule of Reportable Transactions
For the Year Ended December 31, 1998
<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 (Loss)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
(Note 1)
Category (3) - A series of transactions
- ---------------------------------------
in excess of 5% of beginning of year
------------------------------------
Plan assets available for benefits
----------------------------------
Investments in CenturyTel
Common Stock (159
purchases, 93 sales) $ 17,541,929 6,973,830 - - 3,437,240 (Note 2) 3,536,590
Investments in Mutual Funds for
Qualified Employee Benefit Plans
Managed by Barclays:
Asset Allocation Fund
(95 purchases, 150 sales) 18,453,842 4,804,528 - - 4,206,767 (Note 2)
597,761
S & P 500 Stock Fund
(112 purchases, 141 sales) 30,136,099 8,405,479 - - 6,769,244 (Note 2)
1,636,235
Growth Stock Fund
(73 purchases, 167 sales) 11,694,764 17,607,961 - - 19,419,073 (Note 2) (1,811,112)
Bond Index Fund
(108 purchases, 108 sales) 4,965,680 1,517,884 - - 1,507,283 (Note 2) 10,601
Lifepath 2040 Fund
(134 purchases, 80 sales) 3,417,193 1,451,250 - - 1,308,762 (Note 2) 142,488
PacifiCorp Stock Fund
(1 purchase, 175 sales) 16,712,156 13,887,353 - - 16,712,156 (Note 2) (2,824,803)
Money Market Fund
(117 purchases, 131 sales) 20,121,639 7,456,808 - - 7,456,808 (Note 2) -
Investments in Mutual Funds for
Qualified Employee Benefit
Plans Managed by Peregrine:
Norwest Large Company
Growth Fund (6 purchases,
9 sales) 24,120,838 11,960,757 - - 12,210,741 (Note 2) (249,984)
</TABLE>
The above data is based on information which has been certified as accurate and
complete by the trustee, Merrill Lynch. Barclays, Merrill Lynch and Peregrine
are considered parties-in-interest. Additionally, CenturyTel, Inc., as sponsor
of the Plan, is considered a party-in-interest.
Notes: (1) The purchase price denotes cost and current value of
the security on the transaction date.
(2) Current value is substantially the same as purchase price or
selling price of the security on the transaction date.
15
<PAGE>
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.
Dollars and Sense Plan
June 25, 1999 /s/ David Thiels
----------------------
David Thiels
Vice President and Treasurer
16
<PAGE>
CENTURY TELEPHONE ENTERPRISES, INC.
DOLLARS AND SENSE PLAN
Index to Exhibit
Exhibit
Number
- ------------------------------------------------------------------------
23.1 Independent Auditors' Consent
17
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
-----------------------------
The Board of Directors
CenturyTel, Inc.:
We consent to incorporation by reference in the registration statements (No.
33-5836 and No. 33-48554) on Form S-8 of CenturyTel, Inc. of our report dated
June 11, 1999, with respect to the statements of assets available for benefits
with fund information of Century Telephone Enterprises, Inc. Dollars and Sense
Plan as of December 31, 1998 and 1997, and the related statement of changes in
assets available for benefits with fund information for the year ended December
31, 1998, and related financial statement schedules as of and for the year ended
December 31, 1998, which report appears in the December 31, 1998 annual report
on Form 11-K of Century Telephone Enterprises, Inc. Dollars and Sense Plan.
KPMG LLP
/s/ KPMG LLP
Shreveport, Louisiana
June 25, 1999
18
