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) April 27, 1999
CENTURY TELEPHONE ENTERPRISES, 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 April 27, 1999:
FOR IMMEDIATE RELEASE FOR MORE INFORMATION CONTACT:
April 27, 1999 Jeffrey S. Glover (318) 388-9648
[email protected]
CenturyTel's First Quarter Earnings from Operations Rise 30 Percent
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Monroe, LA. . . CenturyTel (Century Telephone Enterprises, Inc., NYSE Symbol:
CTL) announces operating results for first quarter 1999.
o Revenues climbed 11.4% to $414.3 million.
o Net income, excluding gain on asset sales, jumped 29.9% to $54.4 million.
o Diluted earnings per share, excluding gain on asset sales, rose 30.0% to $.39.
o Earnings before interest, taxes, depreciation, amortization and gain on asset
sales advanced 16.6% to $226.3 million.
First Quarter Highlights
(Dollars, except per share data, and shares in thousands)
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Quarter Ended Quarter Ended % Change
3/31/99 3/31/98
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Revenues $ 414,256 $ 371,720 11.4%
EBITDA (1) $ 226,319 $ 194,164 16.6%
Net Income (2) $ 54,372 $ 41,871 29.9%
Diluted Earnings Per Share (2)(3) $ .39 $ .30 30.0%
Average Diluted Shares Outstanding (3) 141,028 139,376 1.2%
Telephone Revenues $ 292,961 $ 259,813 12.8%
Cellular Revenues $ 98,471 $ 94,166 4.6%
Other Operations Revenues $ 22,824 $ 17,741 28.7%
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Telephone Access Lines 1,365,205 1,220,683 11.8%
Cellular Units in
Majority-Owned Markets 638,992 576,397 10.9%
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(1) Earnings before interest, taxes, depreciation, amortization and gain on
asset sales
(2) Excludes after-tax gain on asset sales of $6.7 million, or $.04 per share,
in first quarter 1999 and $15.8 million, or $.11 per share, in first
quarter 1998
(3) Reflects a three-for-two stock split effected as a stock dividend
distributed March 31, 1999
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"We are pleased with the strong customer growth achieved in CenturyTel's
core businesses during the first quarter," Glen F. Post, III, President and
Chief Executive Officer, said. "Annualized internal access line growth was
5.5% during the quarter, and cellular net additions more than doubled from
first quarter 1998, surpassing 14,800 units. CenturyTel's financial results
reflect excellent cash flow growth fueled by margin expansion in both our
wireline and wireless operations."
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Net income excluding gain on asset sales for the quarter climbed 29.9% to
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$54.4 million from $41.9 million in first quarter 1998. Diluted earnings per
share, excluding gain on asset sales, increased 30.0% to $.39 from $.30, and
consolidated revenues rose 11.4% to $414.3 million from $371.7 million. Earnings
before interest, taxes, depreciation, amortization and gain on asset sales
(EBITDA) grew to $226.3 million from $194.2 million, a 16.6% increase.
CenturyTel achieved a consolidated EBITDA margin of 54.6% during the quarter.
Telephone revenues grew 12.8% to $293.0 million during the quarter,compared
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with $259.8 million in first quarter 1998. Telephone operating income increased
24.0%, reaching $95.3 million from $76.8 million, and operating cash flow
rose 18.9% to $167.1 million from $140.6 million a year ago. The fourth
quarter 1998 purchase of telephone access lines in Wisconsin from Ameritech
contributed $11.2 million to telephone revenues during the quarter. CenturyTel's
first quarter telephone operating cash flow margin was 57.0% while the operating
income margin was 32.5%. Internet operations continued to show strong growth as
Internet revenues increased by 60.0% over the prior year.
"Demand for second lines, call management features and data services
continues to aid the strong financial performance in our wireline operations,"
Post said.
Cellular revenues grew 4.6% to $98.5 million in first quarter 1999,
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compared with $94.2 million in first quarter 1998. Cellular operating income
advanced 2.5%, reaching $30.4 million from $29.7 million, and operating cash
flow climbed 7.7% to $47.6 million from $44.2 million a year ago. CenturyTel's
first quarter cellular operating cash flow margin was 48.4% (49.6% based on
service revenues), and operating income margin was 30.9% (31.7% based on service
revenues). Average monthly cellular service revenue per user (ARPU) was $51
during first quarter 1999, a 5.6% decrease from $54 a year ago. Cellular net
additions were more than 14,800 for the quarter, while the average monthly churn
rate was 2.0%.
"CenturyTel's wireless customer growth for the quarter was enhanced by the
successful expansion of our prepaid and digital products combined with low
customer churn levels," Post said.
Revenues from other operations grew 28.7% to $22.8 million during first
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quarter 1999, compared with $17.7 million in first quarter 1998. CenturyTel now
serves more than 240,000 long distance customers, adding more than 15,000 during
the quarter.
"We are pleased with the increase in long distance customers as we continue
to experience strong customer demand for a bundled product offering," Post said.
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 (Century Telephone Enterprises, Inc.) provides integrated
communications services including local exchange, wireless, long distance,
Internet access and security 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
CENTURY TELEPHONE ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(UNAUDITED)
INCREASE
In thousands,except per share amounts 1999 1998 (DECREASE)
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TELEPHONE OPERATIONS
Operating revenues
Local service $ 90,657 78,126 16.0%
Network access 167,155 151,178 10.6%
Other 35,149 30,509 15.2%
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292,961 259,813 12.8%
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Operating expenses
Plant operations 67,022 56,659 18.3%
Customer operations 21,894 22,816 (4.0%)
Corporate and other 36,919 39,783 (7.2%)
Depreciation and amortization 71,828 63,712 12.7%
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197,663 182,970 8.0%
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Telephone operating income 95,298 76,843 24.0%
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CELLULAR OPERATIONS
Operating revenues
Service revenues 95,976 92,098 4.2%
Equipment sales 2,495 2,068 20.6%
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98,471 94,166 4.6%
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Operating expenses
Cost of equipment sold 4,381 3,696 18.5%
System operations 13,303 14,252 (6.7%)
General, administrative and
customer service 19,160 18,381 4.2%
Sales and marketing 14,013 13,642 2.7%
Depreciation and amortization 17,231 14,540 18.5%
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68,088 64,511 5.5%
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Cellular operating income 30,383 29,655 2.5%
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OTHER OPERATIONS
Operating revenues 22,824 17,741 28.7%
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Operating expenses
Cost of sales and other 16,960 13,165 28.8%
Depreciation and amortization 922 942 (2.1%)
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17,882 14,107 26.8%
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Other operating income 4,942 3,634 36.0%
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TOTAL OPERATING INCOME 130,623 110,132 18.6%
OTHER INCOME (EXPENSE)
Gain on sales of assets 10,358 24,343 (57.4%)
Interest expense (42,241) (42,809) (1.3%)
Income from unconsolidated cellular
entities 6,845 6,877 (0.5%)
Minority interest (3,310) (2,643) 25.2%
Other income and expense 2,180 604 260.9%
Income tax expense (43,350) (38,810) 11.7%
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NET INCOME $ 61,105 57,694 5.9%
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EARNINGS PER SHARE (1)
Basic $ 0.44 0.42 4.8%
Diluted (2) $ 0.43 0.41 4.9%
SHARES OUTSTANDING (1)
Basic 138,086 136,442 1.2%
Diluted 141,028 139,376 1.2%
DIVIDENDS PER COMMON SHARE (1) $ 0.045 0.0433 3.9%
(1) Reflects a three-for-two stock split effected as a stock dividend
distributed March 31,1999
(2) Includes $.04 and $.11 in 1999 and 1998, respectively, resulting from
gain on asset sales
CENTURY TELEPHONE ENTERPRISES, INC.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1999 AND DECEMBER 31, 1998
(UNAUDITED)
March 31, December 31,
1999 1998
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(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 4,085 5,742
Other current assets 228,660 220,496
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Total current assets 232,745 226,238
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PROPERTY, PLANT AND EQUIPMENT
Telephone 3,692,537 3,660,252
Cellular 435,379 428,984
Other 214,724 200,422
Accumulated depreciation (2,010,400) (1,938,205)
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Net property, plant and equipment 2,332,240 2,351,453
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INVESTMENTS AND OTHER ASSETS
Excess cost of net assets acquired 1,941,127 1,956,701
Other 391,057 401,063
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Total investments and other assets 2,332,184 2,357,764
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TOTAL ASSETS $ 4,897,169 4,935,455
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LIABILITIES AND EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 54,611 53,010
Other current liabilities 280,311 251,834
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Total current liabilities 334,922 304,844
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LONG-TERM DEBT 2,426,028 2,558,000
DEFERRED CREDITS AND OTHER LIABILITIES 539,798 541,129
STOCKHOLDERS' EQUITY 1,596,421 1,531,482
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TOTAL LIABILITIES AND EQUITY $ 4,897,169 4,935,455
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CAPITAL EXPENDITURES
THREE MONTHS ENDED MARCH 31, 1999 AND 1998
INC
1999 1998 (DEC)
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(in thousands)
Telephone $ 38,304 35,287 8.5%
Cellular 7,163 18,132 (60.5%)
Corporate and other 17,534 9,185 90.9%
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Total capital expenditures $ 63,001 62,604 0.6%
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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/ R. Stewart Ewing
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R. Stewart Ewing
Senior Vice President and
Chief Financial Officer
