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, 1999
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
-------------------------
Independent Auditors' Report
The Board of Directors
CenturyTel, Inc.:
We have audited the accompanying statements of net assets available for benefits
of Century Telephone Enterprises, Inc. Dollars and Sense Plan as of December 31,
1999 and 1998, and the related statement of changes in net assets available for
benefits for the year ended December 31, 1999. 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 net assets available for benefits of Century
Telephone Enterprises, Inc. Dollars and Sense Plan as of December 31, 1999 and
1998, and the changes in net assets available for benefits for the year ended
December 31, 1999, 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. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules 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 27, 2000
CENTURY TELEPHONE ENTERPRISES, INC.
DOLLARS AND SENSE PLAN
Statement of Net Assets Available for Benefits
December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
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<S> <C> <C>
PLAN ASSETS
Investments, at fair value $ 226,743,026 210,790,176
Cash - 1,117,790
Contributions receivable - employer 50,814 687,035
Contributions receivable - participants - 22,103
Receivables, other 4,103 -
-----------------------------------------------------------------------------
TOTAL ASSETS 227,097,943 212,617,104
------------------------------------------------------------------------------
PLAN LIABILITIES
Cash overdraft 54,632 -
------------------------------------------------------------------------------
TOTAL LIABILITIES 54,632 -
------------------------------------------------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $ 227,043,311 212,617,104
==============================================================================
</TABLE>
See accompanying notes to financial statements.
CENTURY TELEPHONE ENTERPRISES, INC.
DOLLARS AND SENSE PLAN
Statement of Changes in Net Assets Available for Benefits
For the year ended December 31, 1999
<TABLE>
<CAPTION>
----------------------------------------------------------------------------
<S> <C> <C>
Additions to net assets:
Investment income
Net appreciation in fair value of investments:
Mutual funds $ 5,207,231
Common stocks 6,242,464
Dividend and other income 11,156,670
Interest income 726,586
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Net investment income 23,332,951
----------------------------------------------------------------------------
Contributions:
Participants 11,367,178
Company 4,468,487
----------------------------------------------------------------------------
Total contributions 15,835,665
----------------------------------------------------------------------------
Total additions 39,168,616
----------------------------------------------------------------------------
Deductions from net assets:
Participant withdrawals 19,534,716
Transfer to divested subsidiary's plan 5,059,139
Other, net 148,554
----------------------------------------------------------------------------
Total deductions 24,742,409
----------------------------------------------------------------------------
Net increase 14,426,207
----------------------------------------------------------------------------
Net assets available for benefits:
Beginning of year 212,617,104
----------------------------------------------------------------------------
End of year $ 227,043,311
============================================================================
</TABLE>
See accompanying notes to financial statements.
CENTURY TELEPHONE ENTERPRISES, INC.
DOLLARS AND SENSE PLAN
Notes to Financial Statements
December 31, 1999
(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 net assets available for benefits and changes in net 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.
In September 1999, the American Institute of Certified Public Accountants
issued Statement of Position 99-3, Accounting for and Reporting of Certain
Defined Contribution Plan Investments and Other Disclosure Matters (SOP
99-3). SOP 99-3 simplifies the disclosure for certain investments and is
effective for plan years ending after December 15, 1999 with earlier
application encouraged. The Plan adopted SOP 99-3 during the Plan year
ending December 31, 1999. Accordingly, information previously required to
be disclosed about participant-directed fund investment programs is not
presented in the Plan's 1999 financial statements. The Plan's 1998
financial statements have been reclassified to conform with the current
year's presentation.
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 twelve 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 55% 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 participants'
accounts (Additional Match Contribution Account). 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.
During 1999, the Company contributed $4,468,487 to the Plan, of which
$4,117,673 related to contributions made to the Employer Contribution
Account and $350,814 related to contributions made to the Additional Match
Contribution 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, his
Participant Rollover Account, his Employer Contribution Account and his
Additional Match 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.
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, 1999, 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, 1999 and 1998, 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.
(2) DESCRIPTION OF THE FUNDS
The following is a description of each of the funds available to Plan
participants as of December 31, 1999:
(a) CenturyTel Common Stock Fund - consists primarily of shares of
CenturyTel Common Stock ($112,022,408 and $95,609,614 at December 31,
1999 and 1998, 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 ($40,082,688 and $39,094,971 at December 31, 1999 and 1998,
respectively).
(c) Asset Allocation Fund - consists primarily of investments in common
stocks, U.S. Treasury bonds and money market instruments ($22,073,760
and $24,636,440 at December 31, 1999 and 1998, respectively).
(d) Loan Fund - represents loans to participants from the participants'
investment accounts ($7,252,283 and $6,934,947 at December 31, 1999
and 1998, respectively).
(e) Bond Index Fund - consists primarily of investments in government and
corporate bonds ($3,511,334 and $4,907,828 at December 31, 1999 and
1998, respectively).
(f) 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
($419,536 and $536,167 at December 31, 1999 and 1998, respectively).
(g) 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
($2,332,692 and $2,450,427 at December 31, 1999 and 1998,
respectively).
(h) 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
($1,729,839 and $1,921,731 at December 31, 1999 and 1998,
respectively).
(i) 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
($1,637,234 and $1,617,350 at December 31, 1999 and 1998,
respectively).
(j) 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
($3,799,135 and $3,374,821 of assets at December 31, 1999 and 1998,
respectively).
(k) Wells Fargo Large Company Growth Fund - consists primarily of invest-
ments in common stocks ($17,098,050 and $13,334,550 at December 31,
1999 and 1998, respectively).
(l) Retirement Reserves Money Fund - consists primarily of investments in
various money market instruments ($14,784,067 at December 31, 1999).
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 the CenturyTel Common Stock Fund. 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. The Plan has been amended since receiving the
determination letter. However, the Plan administrator believes that the
Plan is designed and is currently being operated in compliance with the
applicable provisions of the Internal Revenue Code.
(4) RELATED PARTY TRANSACTIONS
Certain Plan investments are shares of mutual funds managed by Barclays
Global Fund Advisors (Barclays), Peregrine Capital Management (Peregrine)
or Merrill Lynch. 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 $319,908 for the
year ended December 31, 1999.
(5) TRANSFER TO DIVESTED SUBSIDIARY'S PLAN
On May 14, 1999 the Company sold substantially all of its Alaska-based
operations. In connection with the sale, the Plan assets attributable to
the Alaska employees were transferred out of the Plan through a
plan-to-plan transaction. The total Plan account balances and outstanding
loans transferred out was $5,059,139.
(6) CONCENTRATION OF INVESTMENTS
As of December 31, 1999 and 1998, 49.3% and 45.0%, respectively, of the
net assets available for benefits were invested in CenturyTel Common
Stock. Substantially all of the remaining net assets available for
benefits were invested in mutual funds managed by Merrill Lynch, 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 tables set forth information related to the CenturyTel
Common Stock Fund's assets available for benefits as of December 31, 1999
and 1998 and the changes in such assets for the year ended December 31,
1999.
<TABLE>
<CAPTION>
December 31, 1999 1998
------------------------------------------------------------------------------
<S> <C> <C>
PLAN ASSETS
Investments $ 112,022,408 95,609,614
Cash - 1,117,790
Contributions receivable - employer 350,814 687,035
Contributions receivable - participant - 7,055
------------------------------------------------------------------------------
ASSETS AVAILABLE FOR BENEFITS $ 112,373,222 97,421,494
==============================================================================
</TABLE>
<TABLE>
<CAPTION>
For the year ended
December 31, 1999
-------------------------------------------------------------------------------
<S> <C> <C>
Additions to assets:
Investment income
Net appreciation in fair value of investments $ 6,242,464
Other income 356,630
Interest income 177,285
-------------------------------------------------------------------------------
Net investment income 6,776,379
-------------------------------------------------------------------------------
Contributions:
Participants 3,863,448
Company 4,468,487
-------------------------------------------------------------------------------
Total contributions 8,331,935
-------------------------------------------------------------------------------
Total additions 15,108,314
-------------------------------------------------------------------------------
Deductions from assets:
Participant withdrawals 7,582,426
Transfer to divested subsidiary's plan 675,431
Other, net 55,403
-------------------------------------------------------------------------------
Total deductions 8,313,260
-------------------------------------------------------------------------------
Net increase prior to interfund transfers 6,795,054
Interfund transfers 8,156,674
-------------------------------------------------------------------------------
Net increase 14,951,728
-------------------------------------------------------------------------------
Net assets available for benefits:
Beginning of year 97,421,494
-------------------------------------------------------------------------------
End of year $ 112,373,222
===============================================================================
</TABLE>
(8) SUBSEQUENT EVENT (UNAUDITED)
Subsequent to December 31, 1999, the Company entered into an agreement
with T. Rowe Price Associates, Inc. to replace Merrill Lynch as Trustee
of the Plan effective September 1, 2000.
Schedule I
CENTURY TELEPHONE ENTERPRISES, INC.
DOLLARS AND SENSE PLAN
Schedule of Assets Held for Investment Purposes
December 31, 1999
<TABLE>
<CAPTION>
Current
Identity of issuer, borrower, Description Current Value Per
lessor or similar party of Investment Value Unit/Share
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment in CenturyTel Common Stock 2,302,146 units/ 48.660
2,364,589 shares $ 112,022,408 (Notes 1 & 2) 47.375
Loan Fund (interest rates
ranged from 6.9% to 12%) 7,252,283 units 7,252,283 -
Investments in Mutual Funds for
Qualified Employee Benefit Plans
Managed by Barclays:
S & P 500 Stock Fund 1,482,896 units 40,082,688 (Note 1) 27.03
Asset Allocation Fund 1,756,067 units 22,073,760 (Note 1) 12.57
Bond Index Fund 383,752 units 3,511,334 9.15
Lifepath 2000 Fund 37,160 units 419,536 11.29
Lifepath 2010 Fund 169,158 units 2,332,692 13.79
Lifepath 2020 Fund 103,212 units 1,729,839 16.76
Lifepath 2030 Fund 88,023 units 1,637,234 18.60
Lifepath 2040 Fund 175,236 units 3,799,135 21.68
Investments in Mutual Funds for
Qualified Employee Benefit Plans
Managed by Merrill Lynch:
Retirement Reserves Money Fund 14,784,067 units 14,784,067 (Note 1) 1.00
Investments in Mutual Funds for
Qualified Employee Benefit Plans
Managed by Peregrine:
Wells Fargo Large Company
Growth Fund 241,600 units 17,098,050 (Note 1) 70.77
------------------------------------------------------------------------------------------------------------
$ 226,743,026
============================================================================================================
</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) These investments are greater than 5% of assets available for
benefits.
(2) The CenturyTel Common Stock Fund is considered to be nonparticipant
directed. The cost of the investment in CenturyTel Common Stock is
$51,982,994.
Schedule II
CENTURY TELEPHONE ENTERPRISES, INC.
DOLLARS AND SENSE PLAN
Schedule of Reportable Transactions
For the Year Ended December 31, 1999
<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
(447 purchases, 419 sales) $ 21,073,733 10,033,606 - - 5,120,827 (Note 2) 4,912,779
</TABLE>
The above data is based on information which has been certified as accurate and
complete by the trustee, Merrill Lynch. Merrill Lynch is considered a
party-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.
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
/s/ R. Stewart Ewing, Jr.
July 12, 2000 ___________________________
R. Stewart Ewing, Jr.
Retirement Committee Member
and Executive Officer of
Issuer of Plan Securities
CENTURY TELEPHONE ENTERPRISES, INC.
DOLLARS AND SENSE PLAN
Index to Exhibit
Exhibit
Number
-------------------------------------------------------------------------------
23.1 Independent Auditors' Consent
-----------------------------
