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, 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 Century Park 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 April
27, 2000:
FOR IMMEDIATE RELEASE FOR MORE INFORMATION CONTACT:
April 27, 2000 Jeffrey S. Glover (318) 388-9648
[email protected]
CenturyTel's Revenues from Recurring Operations Rise 9 Percent
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Monroe, LA. . . CenturyTel, Inc. (NYSE Symbol: CTL) announces operating results
for first quarter 2000.
o Revenues from recurring operations were $412.9 million.
o Net income from recurring operations was $48.0 million.
o Diluted earnings per share from recurring operations were $.34.
o Earnings from recurring operations before interest, taxes, depreciation and
amortization were $202.6 million.
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First Quarter Highlights,
excluding the effect of
asset divestitures and Quarter Ended Quarter Ended % Change
nonrecurring gains and losses 3/31/00 3/31/99
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(In thousands, except per share amounts)
<S> <C> <C> <C>
Revenues $ 412,863 $ 378,117 9.2%
EBITDA (1) $ 202,636 $ 207,176 (2.2%)
Net Income (2) $ 48,014 $ 52,307 (8.2%)
Diluted Earnings Per Share (2) $ .34 $ .37 (8.1%)
Average Diluted Shares Outstanding 142,556 141,028 1.1%
Telephone Revenues (3) $ 276,926 $ 259,308 6.8%
Wireless Revenues $ 100,311 $ 92,876 8.0%
Other Operations Revenues $ 35,626 $ 25,933 37.4%
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Telephone Access Lines 1,282,237 1,230,929 4.2%
Wireless Units in Majority-Owned Markets 727,507 618,294 17.7%
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(1) Earnings from recurring operations before interest, taxes, depreciation
and amortization
(2) Excludes after-tax gain on asset sales of $5.2 million, or $.04 per share,
and nonrecurring charges of $3.8 million, or $.03 per share, in first
quarter 2000, and after-tax gain on asset sales of $6.7 million, or $.05
per share, in first quarter 1999
(3) Internet revenues of $4.5 million in first quarter 2000 and $3.2 million in
first quarter 1999 were reclassified from Telephone Revenues to Other
Operations Revenues
"CenturyTel's first quarter earnings were influenced by higher expenses related
to several key wireline and wireless growth initiatives," Glen F. Post, III,
President and Chief Executive Officer, said. "In our wireline operations, we
incurred $6.0 million in expenses preparing to integrate the pending GTE
acquisitions. Aggressive wireless sales and marketing campaigns led to expense
increases of $8.0 million while resulting in strong wireless unit growth of more
than 30,600 net customer additions during the quarter."
Net income from recurring operations for the quarter declined 8.2% to $48.0
million from $52.3 million in first quarter 1999. Diluted earnings per share
from recurring operations decreased 8.1% to $.34 from $.37. Consolidated
revenues from recurring operations rose 9.2% to $412.9 million from $378.1
million. EBITDA from recurring operations decreased to $202.6 million from
$207.2 million resulting in an EBITDA margin of 49.1% for the quarter.
These results exclude the 1999 contribution to revenues of $35.5 million
and associated expenses from the sale of non-strategic assets in Alaska and
South Texas. Also excluded are one-time charges of $5.3 million, which relate to
write-offs taken by another carrier operating markets in which CenturyTel has a
minority ownership interest.
"Many of the factors affecting this quarter's performance stem from short-term
expense issues related to pending acquisitions or other growth initiatives. We
believe that our financial results will improve over the second half of the year
as we execute our growth strategies," Post said.
Telephone revenues from recurring operations grew 6.8% to $276.9 million
during the quarter, compared with $259.3 million in first quarter 1999.
Telephone operating income from recurring operations decreased 1.2%, to $84.5
million from $85.5 million, and EBITDA from recurring operations rose 1.4% to
$151.9 million from $149.8 million a year ago. CenturyTel's first quarter
telephone EBITDA margin was 54.8% while the operating income margin was 30.5%
from recurring operations. In our wireline operations we incurred $6.0 million
in expenses related to the pending GTE acquisitions including overhead retained
subsequent to the disposition of CenturyTel's Alaska operations.
o The pending GTE acquisitions are projected to close at the end of second
quarter and early third quarter 2000 subject to regulatory approvals.
o CenturyTel will experience additional expenses in the second quarter
related to the pending GTE acquisitions. Once these acquisitions are
finalized, they are expected to generate more than $340 million in revenues
during the first full year of operation.
Wireless revenues from recurring operations grew 8.0% to $100.3 million in
first quarter 2000, compared with $92.9 million in first quarter 1999. Wireless
operating income from recurring operations was $20.1 million compared to $27.8
million, a 27.9% decrease, and EBITDA from recurring operations decreased 17.5%
to $36.3 million compared to $44.1 million a year ago. The rollout of new
pricing plans coupled with higher customer growth increased sales and marketing
expenses by $8.0 million, which reduced operating income and cash flow for the
quarter. CenturyTel's first quarter wireless EBITDA margin from recurring
operations was 36.2% (37.6% based on service revenues), and operating income
margin was 20.0% (20.8% based on service revenues). Average monthly cellular
service revenue per user (ARPU) was $45 during first quarter 2000, an 11.8%
decrease from $51 a year ago.
o CenturyTel added more than 30,600 wireless customers during the first
quarter, a 105% increase from a year ago. CenturyTel achieved its best
first quarter for net additions in company history.
o CenturyTel achieved an average monthly postpaid churn rate of 2.0% for the
quarter.
o During the quarter, CenturyTel divested its last remaining cellular RSA in
Alaska reducing wireless subscribers by 10,600.
Other operations revenues from recurring operations grew 37.4% to $35.6
million during first quarter 2000, compared with $25.9 million in first quarter
1999. CenturyTel's long distance business generated $7.8 million of the increase
in other operations revenues. CenturyTel now serves more than 319,000 long
distance customers and in excess of 75,000 Internet subscribers.
o CenturyTel added more than 15,300 long distance customers during the
quarter.
o During the quarter, CenturyTel added more than 6,900 Internet subscribers.
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; our ability to
timely consummate our pending acquisitions and effectively manage our growth,
including financing costs, integrating newly acquired properties into our
operations, hiring adequate numbers of qualified staff and successfully
upgrading our billing and other information systems; the risks inherent in rapid
technological change; 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.
CenturyTel, Inc. provides integrated communications services including
local exchange, wireless, long distance, Internet access and security monitoring
services to more than two million customers in 20 states. The company,
headquartered in Monroe, Louisiana, is publicly traded on the New York Stock
Exchange under the symbol CTL. CenturyTel is the seventh largest local exchange
telephone company, based on access lines, and the ninth 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 MARCH 31, 2000 AND 1999
(UNAUDITED)
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<CAPTION>
INCREASE
2000 1999 (DECREASE)
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In thousands, except
per share amounts
<S> <C> <C> <C>
TELEPHONE OPERATIONS
Operating revenues
Local service $ 88,065 90,657 (2.9%)
Network access 162,253 167,155 (2.9%)
Other 26,608 30,461 (12.6%)
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276,926 288,273 (3.9%)
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Operating expenses
Plant operations 62,776 63,937 (1.8%)
Customer operations 22,761 21,357 6.6%
Corporate and other 39,532 36,879 7.2%
Depreciation and amortization 67,360 71,427 (5.7%)
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192,429 193,600 (0.6%)
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Telephone operating income 84,497 94,673 (10.7%)
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WIRELESS OPERATIONS
Operating revenues
Service revenues 96,623 96,061 0.6%
Equipment sales 3,781 2,501 51.2%
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100,404 98,562 1.9%
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Operating expenses
Cost of equipment sold 8,180 4,385 86.5%
System operations 15,653 13,636 14.8%
General, administrative and
customer service 18,206 19,329 (5.8%)
Sales and marketing 22,125 14,120 56.7%
Depreciation and amortization 16,349 17,439 (6.3%)
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80,513 68,909 16.8%
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Wireless operating income 19,891 29,653 (32.9%)
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OTHER OPERATIONS
Operating revenues 35,626 27,421 29.9%
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Operating expenses
Cost of sales and other 27,490 20,009 37.4%
Depreciation and amortization 1,102 1,115 (1.2%)
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28,592 21,124 35.4%
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Other operating income 7,034 6,297 11.7%
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TOTAL OPERATING INCOME 111,422 130,623 (14.7%)
OTHER INCOME (EXPENSE)
Interest expense (36,042) (42,241) (14.7%)
Gain on sales of assets 9,910 10,358 (4.3%)
Income from unconsolidated
cellular entities (1,459) 6,845 (121.3%)
Minority interest (2,292) (3,310) (30.8%)
Other income and expense 4,229 2,180 94.0%
Income tax expense (36,484) (43,350) (15.8%)
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NET INCOME $ 49,284 61,105 (19.3%)
================================================================
EARNINGS PER SHARE
Basic (1) $ 0.35 0.44 (20.5%)
Diluted (2) $ 0.35 0.43 (18.6%)
SHARES OUTSTANDING
Basic 140,565 138,086 1.8%
Diluted 142,556 141,028 1.1%
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 $.34 and $.38 for 2000 and 1999,
respectively
(2) Excluding the effect of asset divestitures and nonrecurring gains and
losses, diluted earnings per share were $.34 and $.37 for 2000 and 1999,
respectively
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CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
Excludes the effect of asset divestitures
and nonrecurring gains and losses INCREASE
2000 1999 (DECREASE)
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In thousands, except
per share amounts
<S> <C> <C> <C>
TELEPHONE OPERATIONS
Operating revenues
Local service $ 88,065 80,947 8.8%
Network access 162,253 152,238 6.6%
Other 26,608 26,123 1.9%
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276,926 259,308 6.8%
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Operating expenses
Plant operations 62,776 55,793 12.5%
Customer operations 22,761 18,914 20.3%
Corporate and other 39,532 34,828 13.5%
Depreciation and amortization 67,360 64,286 4.8%
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192,429 173,821 10.7%
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Telephone operating income 84,497 85,487 (1.2%)
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WIRELESS OPERATIONS
Operating revenues
Service revenues 96,612 90,543 6.7%
Equipment sales 3,699 2,333 58.6%
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100,311 92,876 8.0%
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Operating expenses
Cost of equipment sold 8,103 4,190 93.4%
System operations 15,553 12,518 24.2%
General, administrative and
customer service 18,206 18,398 (1.0%)
Sales and marketing 22,116 13,715 61.3%
Depreciation and amortization 16,265 16,229 0.2%
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80,243 65,050 23.4%
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Wireless operating income 20,068 27,826 (27.9%)
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OTHER OPERATIONS
Operating revenues 35,626 25,933 37.4%
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Operating expenses
Cost of sales and other 26,986 18,636 44.8%
Depreciation and amortization 1,102 1,030 7.0%
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28,088 19,666 42.8%
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Other operating income 7,538 6,267 20.3%
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TOTAL OPERATING INCOME 112,103 119,580 (6.3%)
OTHER INCOME (EXPENSE)
Interest expense (36,017) (36,479) (1.3%)
Income from unconsolidated
cellular entities 3,871 6,845 (43.4%)
Minority interest (2,292) (2,760) (17.0%)
Other income and expense 4,227 1,966 115.0%
Income tax expense (33,878) (36,845) (8.1%)
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NET INCOME $ 48,014 52,307 (8.2%)
=================================================================
EARNINGS PER SHARE
Basic $ 0.34 0.38 (10.5%)
Diluted $ 0.34 0.37 (8.1%)
SHARES OUTSTANDING
Basic 140,565 138,086 1.8%
Diluted 142,556 141,028 1.1%
DIVIDENDS PER COMMON SHARE $ 0.0475 0.0450 5.6%
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CenturyTel, Inc.
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2000 AND DECEMBER 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
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(in thousands)
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 62,629 56,640
Other current assets 244,273 229,433
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Total current assets 306,902 286,073
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PROPERTY, PLANT AND EQUIPMENT
Telephone 3,465,611 3,439,469
Wireless 468,630 472,725
Other 305,367 281,713
Accumulated depreciation (2,007,218) (1,937,449)
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Net property, plant and equipment 2,232,390 2,256,458
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INVESTMENTS AND OTHER ASSETS
Excess cost of net assets acquired 1,632,171 1,644,884
Other 557,721 517,992
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Total investments and other assets 2,189,892 2,162,876
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TOTAL ASSETS $ 4,729,184 4,705,407
===============================================================================
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 62,311 62,098
Other current liabilities 303,757 247,079
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Total current liabilities 366,068 309,177
LONG-TERM DEBT 1,998,430 2,078,311
DEFERRED CREDITS AND OTHER LIABILITIES 475,321 469,927
STOCKHOLDERS' EQUITY 1,889,365 1,847,992
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TOTAL LIABILITIES AND EQUITY $ 4,729,184 4,705,407
===============================================================================
</TABLE>
CAPITAL EXPENDITURES
THREE MONTHS ENDED MARCH 31, 2000 AND 1999
<TABLE>
<CAPTION>
INC
2000 1999 (DEC)
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(in thousands)
<S> <C> <C> <C>
Telephone $ 29,309 38,304 (23.5%)
Wireless 3,679 8,563 (57.0%)
Corporate and other 25,177 16,134 56.0%
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Total capital expenditures $ 58,165 63,001 (7.7%)
=====================================================================
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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.
CenturyTel, Inc.
By: /s/ Neil A. Sweasy
-------------------------
Neil A. Sweasy
Vice President and Controller
