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) October 26, 2000
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 CenturyTel Drive, Monroe, Louisiana 71203
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (318) 388-9000
Item 5. Other Events
The following press release was issued by CenturyTel,Inc. on October 26,
2000:
FOR IMMEDIATE RELEASE: FOR MORE INFORMATION CONTACT:
October 26, 2000 Media: Patricia Cameron (318) 388-9674
[email protected]
Investors: Jeffrey S. Glover (318) 388-9648
[email protected]
CenturyTel Achieves 16 Percent Third Quarter Revenue Growth Fueled by
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Acquisitions and Strong Core Business Unit Performance
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Monroe, LA . . CenturyTel, Inc.(NYSE Symbol: CTL) announces operating results
for third quarter 2000.
o Revenues from recurring operations climbed 16.4% to $482.1 million.
o Earnings from recurring operations before interest, taxes, depreciation,
amortization and gain on sales of assets, advanced 16.7% to $260.0 million.
o Net income from recurring operations increased 3.9% to $66.6 million.
o Diluted earnings per share from recurring operations rose 4.4% to $.47.
o Cash earnings per share from recurring operations increased 7.5% to $.57.
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Third Quarter Highlights*
(Dollars, except per share Quarter Ended Quarter Ended
amounts, in thousands) 9/30/00 9/30/99 % Change
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Revenues (1) $ 482,067 $ 413,979 16.4%
EBITDA (2) $ 260,020 $ 222,807 16.7%
Net Income (3) $ 66,646 $ 64,175 3.9%
Diluted Earnings Per Share (3) $ .47 $ .45 4.4%
Average Diluted Shares Outstanding 141,848 141,504 0.2%
Telephone Revenues (1) $ 324,608 $ 273,644 18.6%
Wireless Revenues $ 120,232 $ 109,778 9.5%
Other Operations Revenues $ 37,227 $ 30,557 21.8%
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Telephone Access Lines 1,800,728 1,263,036 42.6%
Wireless Units in Majority-Owned
Markets 741,183 640,311 15.8%
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*Excluding the effects of asset divestitures and nonrecurring gains and losses
(1) Includes $41.0 million revenue contribution from acquisitions in third
quarter 2000
(2) Earnings from recurring operations before interest, taxes, depreciation,
amortization and gain on sales of assets
(3) Excludes one-time net gains of $1.3 million, or $.01 per share, in third
quarter 2000 and $741,000, or $.005 per share, in third quarter 1999
-----------------------------
"CenturyTel achieved strong operating results for the quarter driven by
excellent revenue and cash flow growth," Glen F. Post, III, President and Chief
Executive Officer, said. "The Verizon acquisitions were completed this quarter,
and the integration is on track. Our revenue growth was driven by acquisitions,
increased digital wireless customers, and higher data services revenue."
Net income from recurring operations for the quarter rose 3.9% to $66.6
million from $64.2 million in third quarter 1999. Diluted earnings per share
from recurring operations increased 4.4% to $.47 from $.45. Cash earnings per
share from recurring operations increased 7.5% to $.57 from $.53. Consolidated
revenues from recurring operations rose 16.4% to $482.1 million from $414.0
million. EBITDA from recurring operations grew to $260.0 million from $222.8
million, a 16.7% increase. CenturyTel achieved a consolidated EBITDA margin of
53.9% during the quarter.
"The acquisition of nearly 500,000 telephone access lines from Verizon this
quarter represents a 40% increase in our telephone operations. We look forward
to realizing a full revenue contribution from these acquisitions in the fourth
quarter," Post said.
Telephone revenues grew 18.6% to $324.6 million during the quarter,
compared with $273.6 million in third quarter 1999. The Verizon acquisitions
contributed $41.0 million to quarterly revenues. Telephone operating income
increased 22.2%, reaching $99.8 million from $81.6 million, and EBITDA rose
23.4% to $182.1 million from $147.6 million a year ago. CenturyTel's third
quarter telephone EBITDA margin was 56.1% while the operating income margin was
30.7%.
"CenturyTel's rollout of high-speed Internet access continues to gain
momentum. At the end of the third quarter, high-speed Internet access via DSL
was available to 26% of CenturyTel's telephone access lines, excluding newly
acquired markets," Post said.
Wireless revenues from recurring operations grew 9.5% to $120.2 million in
third quarter 2000, compared with $109.8 million in third quarter 1999. Wireless
operating income from recurring operations was $39.3 million compared to $40.0
million in 1999, and EBITDA from recurring operations was $55.4 million compared
to $56.9 million a year ago. CenturyTel's third quarter wireless EBITDA margin
was 46.1% (47.4% based on service revenues), and operating income margin was
32.7% (33.6% based on service revenues). Average monthly cellular service
revenue per user (ARPU) was $52 during third quarter 2000, an 8.8% decrease from
$57 a year ago. CenturyTel added 21,900 contract customers while 30,100
non-revenue-generating prepaid customers were disconnected during the quarter.
The average monthly contract customer churn rate was 1.9%.
"The addition of 21,900 contract customers this quarter compares with 1,100
contract additions in third quarter 1999. The vast majority of these new
customers are on digital rate plans that typically produce an above average
ARPU. We continue to focus on adding contract customers while decreasing our
focus on prepaid plans for customer growth," Post said.
Other operations revenues from recurring operations grew 21.8% to $37.2
million during third quarter 2000, compared with $30.6 million in third quarter
1999. CenturyTel's long distance business generated $4.5 million of the increase
in other operations revenues. CenturyTel now serves more than 347,000 long
distance customers, adding nearly 21,000 during the quarter.
During the first nine months of 2000, net income from recurring operations
was $174.0 million, a 3.3% decrease from $179.9 million in 1999. Diluted
earnings per share from recurring operations declined 3.1% to $1.23 from $1.27,
and cash earnings per share declined 1.3% to $1.49 from $1.51. Consolidated
revenues from recurring operations rose 11.0% to $1.3 billion from $1.2 billion.
EBITDA grew to $683.9 million from $646.5 million, a 5.8% increase. Free cash
flow generation was $130.3 million during the first nine months of 2000.
During the third quarter 2000, CenturyTel borrowed $1.46 billion under its
credit facilities to finance the Verizon acquisitions. A substantial portion of
this debt was refinanced longer term with the issuance of $900 million of senior
notes in mid-October 2000.
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 Company's ability to
effectively manage its growth; including integrating newly acquired businesses
into our operations; hiring adequate numbers of qualified staff and successfully
upgrading our billing and other information systems; the inherent risk of rapid
technological change; the effects of regulatory decisions affecting the Company
or the telecommunications industry generally; 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; 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, 1999.
Investors can access CenturyTel's earnings conference call and replay by
accessing the company's website at (www.centurytel.com) A separate dial-up
replay number is available until the close of business on Monday, October 30.
The replay number is 1-800-625-5288 and the access code is 827283.
CenturyTel, Inc. provides communications services including local exchange,
wireless, long distance, Internet access and security monitoring services to
nearly three 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 8th largest local exchange telephone company,
based on access lines, and the 8th 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 SEPTEMBER 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
INCREASE
In thousands, except per share amounts 2000 1999 (DECREASE)
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<S> <C> <C> <C>
TELEPHONE OPERATIONS
Operating revenues
Local service $ 106,304 86,010 23.6%
Network access 187,254 159,682 17.3%
Other 31,050 27,952 11.1%
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324,608 273,644 18.6%
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Operating expenses
Plant operations 76,086 64,076 18.7%
Customer operations 28,623 21,398 33.8%
Corporate and other 37,766 40,548 (6.9%)
Depreciation and amortization 82,380 66,014 24.8%
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224,855 192,036 17.1%
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Telephone operating income 99,753 81,608 22.2%
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WIRELESS OPERATIONS
Operating revenues
Service revenues 116,862 109,318 6.9%
Equipment sales 3,370 2,334 44.4%
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120,232 111,652 7.7%
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Operating expenses
Cost of equipment sold 7,192 4,200 71.2%
System operations 19,749 13,864 42.4%
General, administrative and
customer service 18,796 22,128 (15.1%)
Sales and marketing 19,081 13,588 40.4%
Depreciation and amortization 16,134 17,167 (6.0%)
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80,952 70,947 14.1%
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Wireless operating income 39,280 40,705 (3.5%)
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OTHER OPERATIONS
Operating revenues 37,794 33,909 11.5%
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Operating expenses
Cost of sales and other 28,542 25,044 14.0%
Depreciation and amortization 1,226 1,119 9.6%
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29,768 26,163 13.8%
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Other operating income 8,026 7,746 3.6%
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TOTAL OPERATING INCOME 147,059 130,059 13.1%
OTHER INCOME (EXPENSE)
Gain on sales of assets 10,683 1,201 789.5%
Interest expense (48,904) (34,997) 39.7%
Income from unconsolidated
cellular entities 11,366 10,801 5.2%
Minority interest (2,889) (3,460) (16.5%)
Other income and expense (4,065) 1,108 (466.9%)
Income tax expense (46,026) (40,183) 14.5%
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NET INCOME $ 67,224 64,529 4.2%
================================================================
EARNINGS PER SHARE
Basic (1) $ 0.48 0.46 4.3%
Diluted (2) $ 0.47 0.46 2.2%
SHARES OUTSTANDING
Basic 140,220 139,085 0.8%
Diluted 141,848 141,504 0.2%
DIVIDENDS PER COMMON SHARE $ 0.0475 0.0450 5.6%
(1) Excluding the effect of asset divestitures and nonrecurring gains and
losses, basic earnings per share were $.47 and $.46 for 2000 and 1999,
respectively
(2) Excluding the effect of asset divestitures and nonrecurring gains and
losses, diluted earnings per share were $.47 and $.45 for 2000 and 1999,
respectively
</TABLE>
CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
Excludes the effect of asset divestitures and nonrecurring gains and losses
INCREASE
In thousands, except per share amounts 2000 1999 (DECREASE)
--------------------------------------------------------------------------------
<S> <C> <C> <C>
TELEPHONE OPERATIONS
Operating revenues
Local service $ 106,304 86,010 23.6%
Network access 187,254 159,682 17.3%
Other 31,050 27,952 11.1%
----------------------------------------------------------------
324,608 273,644 18.6%
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Operating expenses
Plant operations 76,086 64,076 18.7%
Customer operations 28,623 21,398 33.8%
Corporate and other 37,766 40,548 (6.9%)
Depreciation and amortization 82,380 66,014 24.8%
----------------------------------------------------------------
224,855 192,036 17.1%
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Telephone operating income 99,753 81,608 22.2%
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WIRELESS OPERATIONS
Operating revenues
Service revenues 116,862 107,584 8.6%
Equipment sales 3,370 2,194 53.6%
----------------------------------------------------------------
120,232 109,778 9.5%
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Operating expenses
Cost of equipment sold 7,192 4,055 77.4%
System operations 19,749 13,444 46.9%
General, administrative and
customer service 18,796 21,811 (13.8%)
Sales and marketing 19,081 13,560 40.7%
Depreciation and amortization 16,134 16,909 (4.6%)
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80,952 69,779 16.0%
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Wireless operating income 39,280 39,999 (1.8%)
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OTHER OPERATIONS
Operating revenues 37,227 30,557 21.8%
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Operating expenses
Cost of sales and other 27,108 20,836 30.1%
Depreciation and amortization 1,140 868 31.3%
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28,248 21,704 30.2%
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Other operating income 8,979 8,853 1.4%
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TOTAL OPERATING INCOME 148,012 130,460 13.5%
OTHER INCOME (EXPENSE)
Interest expense (48,806) (34,974) 39.5%
Income from unconsolidated
cellular entities 11,366 10,801 5.2%
Minority interest (2,889) (3,460) (16.5%)
Other income and expense 3,877 1,215 219.1%
Income tax expense (44,914) (39,867) 12.7%
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NET INCOME $ 66,646 64,175 3.9%
================================================================
EARNINGS PER SHARE
Basic $ 0.47 0.46 2.2%
Diluted $ 0.47 0.45 4.4%
SHARES OUTSTANDING
Basic 140,220 139,085 0.8%
Diluted 141,848 141,504 0.2%
DIVIDENDS PER COMMON SHARE $ 0.0475 0.0450 5.6%
</TABLE>
CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
INCREASE
In thousands, except per share amounts 2000 1999 (DECREASE)
--------------------------------------------------------------------------------
<S> <C> <C> <C>
TELEPHONE OPERATIONS
Operating revenues
Local service $ 284,896 266,119 7.1%
Network access 510,440 482,626 5.8%
Other 82,286 88,069 (6.6%)
----------------------------------------------------------------
877,622 836,814 4.9%
----------------------------------------------------------------
Operating expenses
Plant operations 198,625 188,226 5.5%
Customer operations 76,893 66,039 16.4%
Corporate and other 117,634 116,305 1.1%
Depreciation and amortization 217,371 205,969 5.5%
----------------------------------------------------------------
610,523 576,539 5.9%
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Telephone operating income 267,099 260,275 2.6%
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WIRELESS OPERATIONS
Operating revenues
Service revenues 320,836 312,873 2.5%
Equipment sales 10,942 7,372 48.4%
----------------------------------------------------------------
331,778 320,245 3.6%
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Operating expenses
Cost of equipment sold 21,728 13,848 56.9%
System operations 51,782 42,394 22.1%
General, administrative
and customer service 56,423 60,113 (6.1%)
Sales and marketing 60,637 41,130 47.4%
Depreciation and amortization 49,225 50,963 (3.4%)
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239,795 208,448 15.0%
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Wireless operating income 91,983 111,797 (17.7%)
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OTHER OPERATIONS
Operating revenues 109,346 93,152 17.4%
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Operating expenses
Cost of sales and other 81,331 70,556 15.3%
Depreciation and amortization 3,724 3,361 10.8%
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85,055 73,917 15.1%
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Other operating income 24,291 19,235 26.3%
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TOTAL OPERATING INCOME 383,373 391,307 (2.0%)
OTHER INCOME (EXPENSE)
Gain on sales of assets 20,593 51,160 (59.7%)
Interest expense (120,213) (114,725) 4.8%
Income from unconsolidated
cellular entities 19,382 26,913 (28.0%)
Minority interest (8,052) (25,560) (68.5%)
Other income and expense 2,548 6,722 (62.1%)
Income tax expense (123,278) (156,721) (21.3%)
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NET INCOME $ 174,353 179,096 (2.6%)
================================================================
EARNINGS PER SHARE
Basic (1) $ 1.24 1.29 (3.9%)
Diluted (2) $ 1.23 1.27 (3.1%)
SHARES OUTSTANDING
Basic 139,989 138,668 1.0%
Diluted 141,769 141,331 0.3%
DIVIDENDS PER COMMON SHARE $ 0.1425 0.1350 5.6%
(1) Excluding the effects of asset divestitures and nonrecurring gains and
losses, basic earnings per share were $1.24 and $1.30 for 2000 and 1999,
respectively
(2) Excluding the effects of asset divestitures and nonrecurring gains and
losses, basic earnings per share were $1.23 and $1.27 for 2000 and 1999,
respectively
</TABLE>
<TABLE>
<CAPTION>
CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
(UNAUDITED)
Excludes the effect of asset divestitures and nonrecurring gains and losses
INCREASE
In thousands, except per share amounts 2000 1999 (DECREASE)
--------------------------------------------------------------------------------
<S> <C> <C> <C>
TELEPHONE OPERATIONS
Operating revenues
Local service $ 284,896 251,708 13.2%
Network access 510,440 460,442 10.9%
Other 82,286 81,748 0.7%
----------------------------------------------------------------
877,622 793,898 10.5%
----------------------------------------------------------------
Operating expenses
Plant operations 198,625 176,213 12.7%
Customer operations 76,893 62,230 23.6%
Corporate and other 117,634 112,778 4.3%
Depreciation and amortization 217,371 195,472 11.2%
----------------------------------------------------------------
610,523 546,693 11.7%
----------------------------------------------------------------
Telephone operating income 267,099 247,205 8.0%
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WIRELESS OPERATIONS
Operating revenues
Service revenues 320,824 301,433 6.4%
Equipment sales 10,860 6,939 56.5%
----------------------------------------------------------------
331,684 308,372 7.6%
----------------------------------------------------------------
Operating expenses
Cost of equipment sold 21,651 13,462 60.8%
System operations 51,682 40,321 28.2%
General, administrative and
customer service 56,423 58,269 (3.2%)
Sales and marketing 60,628 40,478 49.8%
Depreciation and amortization 49,141 48,595 1.1%
----------------------------------------------------------------
239,525 201,125 19.1%
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Wireless operating income 92,159 107,247 (14.1%)
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OTHER OPERATIONS
Operating revenues 105,587 81,936 28.9%
----------------------------------------------------------------
Operating expenses
Cost of sales and other 74,553 57,178 30.4%
Depreciation and amortization 3,200 2,467 29.7%
----------------------------------------------------------------
77,753 59,645 30.4%
----------------------------------------------------------------
Other operating income 27,834 22,291 24.9%
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TOTAL OPERATING INCOME 387,092 376,743 2.7%
OTHER INCOME (EXPENSE)
Interest expense (119,927) (101,118) 18.6%
Income from unconsolidated
cellular entities 24,712 26,913 (8.2%)
Minority interest (8,052) (9,930) (18.9%)
Other income and expense 10,475 6,197 69.0%
Income tax expense (120,342) (118,909) 1.2%
----------------------------------------------------------------
NET INCOME $ 173,958 179,896 (3.3%)
================================================================
EARNINGS PER SHARE
Basic $ 1.24 1.30 (4.6%)
Diluted $ 1.23 1.27 (3.1%)
SHARES OUTSTANDING
Basic 139,989 138,668 1.0%
Diluted 141,769 141,331 0.3%
DIVIDENDS PER COMMON SHARE $ 0.1425 0.1350 5.6%
</TABLE>
CenturyTel, Inc.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2000 AND DECEMBER 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
September 30, December 31,
2000 1999
--------------------------------------------------------------------------------
(in thousands)
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 71,645 56,640
Other current assets 299,334 229,433
--------------------------------------------------------------------------------
Total current assets 370,979 286,073
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PROPERTY, PLANT AND EQUIPMENT
Telephone 4,901,664 3,439,469
Wireless 503,215 472,725
Other 362,057 281,713
Accumulated depreciation (2,875,149) (1,937,449)
--------------------------------------------------------------------------------
Net property, plant and equipment 2,891,787 2,256,458
--------------------------------------------------------------------------------
INVESTMENTS AND OTHER ASSETS
Excess cost of net assets acquired 2,523,254 1,644,884
Other 524,862 517,992
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Total investments and other assets 3,048,116 2,162,876
--------------------------------------------------------------------------------
TOTAL ASSETS $ 6,310,882 4,705,407
================================================================================
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term debt and current
maturities of $ 349,204 62,098
Other current liabilities 316,581 247,079
--------------------------------------------------------------------------------
Total current liabilities 665,785 309,177
LONG-TERM DEBT 3,129,988 2,078,311
DEFERRED CREDITS AND OTHER LIABILITIES 531,657 469,927
STOCKHOLDERS' EQUITY 1,983,452 1,847,992
--------------------------------------------------------------------------------
TOTAL LIABILITIES AND EQUITY $ 6,310,882 4,705,407
================================================================================
</TABLE>
CAPITAL EXPENDITURES
NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
INC
2000 1999 (DEC)
--------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Telephone $ 157,841 145,178 8.7%
Wireless 38,964 44,262 (12.0%)
Corporate and other 85,876 47,558 80.6%
-------------------------------------------------------------------
Total capital expenditures $ 282,681 236,998 19.3%
===================================================================
</TABLE>
CAPITAL EXPENDITURES
THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
<TABLE>
<CAPTION>
INC
2000 1999 (DEC)
--------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Telephone $ 82,427 58,554 40.8%
Wireless 24,279 11,072 119.3%
Corporate and other 36,568 18,244 100.4%
-------------------------------------------------------------------
Total capital expenditures $ 143,274 87,870 63.1%
===================================================================
</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.
CenturyTel, Inc.
By: /s/ Neil A. Sweasy
-------------------------
Neil A. Sweasy
Vice President and Controller
