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) July 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 July
27, 2000:
FOR IMMEDIATE RELEASE FOR MORE INFORMATION CONTACT:
July 27, 2000 Jeffrey S. Glover (318) 388-9648
[email protected]
CenturyTel Achieves Earnings Per Share of $.41 for the Second Quarter
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Monroe, Louisiana . . . CenturyTel, Inc.(NYSE Symbol:CTL) announces operating
results for second quarter 2000.
o Revenues from recurring operations were $423.2 million.
o Net income from recurring operations was $57.8 million.
o Diluted earnings per share from recurring operations were $.41.
o Earnings before interest, taxes, depreciation and amortization were $219.6
million.
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<TABLE>
<CAPTION>
Second Quarter Highlights excluding
the effect of asset divestitures
(In thousands, except Quarter Ended Quarter Ended
per share amounts) 6/30/00 6/30/99 % Change
--------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues $ 423,156 $ 397,663 6.4%
EBITDA (1) $ 219,649 $ 215,845 1.8%
Net Income $ 57,845 $ 59,525 (2.8%)
Diluted Earnings Per Share (2) $ .41 $ .42 (2.4%)
Average Diluted Shares Outstanding 141,732 141,461 .2%
Telephone Revenues (3) $ 276,088 $ 260,946 5.8%
Wireless Revenues $ 111,142 $ 105,725 5.1%
Other Operations Revenues (3) $ 35,926 $ 30,992 15.9%
--------------------------------------------------------------------------------
Telephone Access Lines 1,296,043 1,246,593 4.0%
Wireless Units in Majority-Owned Markets 749,400 630,951 18.8%
--------------------------------------------------------------------------------
</TABLE>
(1) Earnings from recurring operations before interest, taxes, depreciation
and amortization
(2) Excluding expenses related to pending acquisitions, diluted earnings per
share were $.43 for second quarter 2000
(3) Internet revenues of $5.3 million in second quarter 2000 and $3.4 million
in second quarter 1999 were reclassified from Telephone Revenues to Other
Operations Revenues
----------------------------
"We are pleased to announce strong second quarter results," Glen F. Post,
III, President and Chief Executive Officer, said. "CenturyTel's financial
performance improved substantially from first quarter 2000 as earnings per
share rose 21% sequentially to $.41. We achieved a 71% increase in wireless
net customer additions compared with second quarter 1999, fueled by
excellent demand for our new digital rate plans. Additionally, CenturyTel
expects to close the pending GTE acquisitions during the third quarter,
which will significantly expand our customer base and increase revenue
streams."
-----------------------------
Net income from recurring operations for the quarter decreased 2.8% to
$57.8 million from $59.5 million in second quarter 1999. Diluted earnings per
share from recurring operations was $.41 compared with $.42 in second quarter
1999. Consolidated revenues from recurring operations climbed 6.4% to $423.2
million from $397.7 million. Earnings from recurring operations before interest,
taxes, depreciation and amortization (EBITDA) advanced to $219.6 million from
$215.8 million, a 1.8% increase. CenturyTel achieved a consolidated EBITDA
margin of 51.9% during the quarter.
-----------------------------
"CenturyTel's second quarter results reflect $.02 per share in additional
expenses related to the integration of the pending GTE acquisitions. Strong
wireless customer growth during the quarter led to higher sales and marketing
expenses which impacted our wireless results in the current quarter, but will
contribute to revenue growth in subsequent quarters," Post said.
-----------------------------
Telephone revenues from recurring operations grew 5.8% to $276.1 million
during the quarter, compared with $260.9 million in second quarter 1999.
Telephone operating income from recurring operations increased 3.5%, reaching
$82.8 million from $80.1 million, and operating cash flow from recurring
operations rose 3.6% to $150.5 million from $145.3 million a year ago.
CenturyTel's second quarter telephone EBITDA margin was 54.5% while the
operating income margin was 30.0%.
o The Arkansas and Missouri GTE acquisitions are both scheduled to close
on July 31, and we anticipate closing the Wisconsin properties by the
end of the third quarter.
o CenturyTel's DSL deployment is on track as we expanded the availability
of high-speed Internet access via DSL to 18% of CenturyTel's access
lines during the quarter.
Wireless revenues from recurring operations advanced 5.1% to $111.1 million
in second quarter 2000, compared with $105.7 million in second quarter 1999.
Local service revenues from recurring operations increased 10.4% while roaming
revenues declined 14.3% from a year ago. Roaming revenues were 21.6% of wireless
service revenues for the quarter. Wireless operating income from recurring
operations decreased 17.3% to $32.8 million from $39.7 million, and operating
cash flow declined 9.9% to $49.6 million from $55.0 million a year ago. These
declines reflect a $6.2 million increase in sales and marketing costs coupled
with a $3.9 million decline in roaming revenues. Increased roaming minutes of
use were more than offset by reductions in roaming rates. CenturyTel's second
quarter wireless EBITDA margin from recurring operations was 44.6% (46.2% based
on service revenues), and operating income margin was 29.5% (30.6% based on
service revenues).
o Average monthly churn for contract customers was 1.7% for the quarter.
o CenturyTel added nearly 21,900 wireless customers during the second
quarter, a 71% increase from second quarter 1999.
o Average monthly wireless service revenue per user (ARPU) was $48 during
second quarter 2000.
Other operations revenues from recurring operations grew 15.9% to $35.9
million during second quarter 2000, compared with $31.0 million in second
quarter 1999.
o CenturyTel added more than 7,300 long distance customers, ending the
quarter with 326,000 long distance subscribers.
o Internet subscribers increased 55% from the prior year to more than 80,500
customers. CenturyTel added 5,200 Internet subscribers during the quarter.
During the first six months of 2000, net income from recurring operations
decreased 5.3% to $105.9 million from $111.8 million in 1999. Diluted earnings
per share declined 5.1% to $.75 from $.79, and consolidated revenues increased
7.8% to $836.0 million from $775.8 million. Earnings from recurring operations
before interest, taxes, depreciation and amortization (EBITDA) was $422.3
million compared with $423.0 million a year ago.
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 JUNE 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
INCREASE
2000 1999 (DECREASE)
--------------------------------------------------------------------------------
In thousands, except
per share amounts
<S> <C> <C> <C>
TELEPHONE OPERATIONS
Operating revenues
Local service $ 90,527 89,452 1.2%
Network access 160,933 155,789 3.3%
Other 24,628 29,656 (17.0%)
-------------------------------------------------------------------
276,088 274,897 0.4%
-------------------------------------------------------------------
Operating expenses
Plant operations 59,763 60,213 (0.7%)
Customer operations 25,509 23,284 9.6%
Corporate and other 40,336 38,878 3.8%
Depreciation and amortization 67,631 68,528 (1.3%)
-------------------------------------------------------------------
193,239 190,903 1.2%
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Telephone operating income 82,849 83,994 (1.4%)
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WIRELESS OPERATIONS
Operating revenues
Service revenues 107,351 107,495 (0.1%)
Equipment sales 3,791 2,537 49.4%
-------------------------------------------------------------------
111,142 110,032 1.0%
-------------------------------------------------------------------
Operating expenses
Cost of equipment sold 6,356 5,263 20.8%
System operations 16,380 14,894 10.0%
General, administrative and
customer service 19,421 18,656 4.1%
Sales and marketing 19,431 13,423 44.8%
Depreciation and amortization 16,742 16,357 2.4%
-------------------------------------------------------------------
78,330 68,593 14.2%
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Wireless operating income 32,812 41,439 (20.8%)
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OTHER OPERATIONS
Operating revenues 35,926 31,821 12.9%
-------------------------------------------------------------------
Operating expenses
Cost of sales and other 25,299 25,502 (0.8%)
Depreciation and amortization 1,396 1,127 23.9%
-------------------------------------------------------------------
26,695 26,629 0.2%
-------------------------------------------------------------------
Other operating income 9,231 5,192 77.8%
-------------------------------------------------------------------
TOTAL OPERATING INCOME 124,892 130,625 (4.4%)
OTHER INCOME (EXPENSE)
Gain on sales of assets - 39,601 (100.0%)
Interest expense (35,267) (37,487) (5.9%)
Income from unconsolidated
cellular entities 9,475 9,267 2.2%
Minority interest (2,871) (18,790) (84.7%)
Other income and expense 2,384 3,434 (30.6%)
Income tax expense (40,768) (73,188) (44.3%)
-------------------------------------------------------------------
NET INCOME $ 57,845 53,462 8.2%
===================================================================
EARNINGS PER SHARE
Basic (1) $ 0.41 0.38 7.9%
Diluted (2) $ 0.41 0.38 7.9%
SHARES OUTSTANDING
Basic 139,995 138,852 0.8%
Diluted 141,732 141,461 0.2%
DIVIDENDS PER COMMON SHARE $ 0.0475 0.0450 5.6%
</TABLE>
(1) Excluding the effect of asset divestitures and nonrecurring gains and
losses, basic earnings per share were $.41 and $.43 for 2000 and 1999,
respectively
(2) Excluding the effect of asset divestitures and nonrecurring gains and
losses, diluted earnings per share were $.41 and $.42 for 2000 and 1999,
respectively
CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
Excludes the effect of INCREASE
asset divestitures 2000 1999 (DECREASE)
--------------------------------------------------------------------------------
In thousands, except
per share amounts
<S> <C> <C> <C>
TELEPHONE OPERATIONS
Operating revenues
Local service $ 90,527 84,751 6.8%
Network access 160,933 148,522 8.4%
Other 24,628 27,673 (11.0%)
-------------------------------------------------------------------
276,088 260,946 5.8%
-------------------------------------------------------------------
Operating expenses
Plant operations 59,763 56,347 6.1%
Customer operations 25,509 21,917 16.4%
Corporate and other 40,336 37,401 7.8%
Depreciation and amortization 67,631 65,211 3.7%
-------------------------------------------------------------------
193,239 180,876 6.8%
-------------------------------------------------------------------
Telephone operating income 82,849 80,070 3.5%
-------------------------------------------------------------------
WIRELESS OPERATIONS
Operating revenues
Service revenues 107,351 103,313 3.9%
Equipment sales 3,791 2,412 57.2%
-------------------------------------------------------------------
111,142 105,725 5.1%
-------------------------------------------------------------------
Operating expenses
Cost of equipment sold 6,356 5,216 21.9%
System operations 16,380 14,229 15.1%
General, administrative and
customer service 19,421 18,067 7.5%
Sales and marketing 19,431 13,196 47.2%
Depreciation and amortization 16,742 15,319 9.3%
-------------------------------------------------------------------
78,330 66,027 18.6%
-------------------------------------------------------------------
Wireless operating income 32,812 39,698 (17.3%)
-------------------------------------------------------------------
OTHER OPERATIONS
Operating revenues 35,926 30,992 15.9%
-------------------------------------------------------------------
Operating expenses
Cost of sales and other 25,299 24,256 4.3%
Depreciation and amortization 1,396 1,070 30.5%
-------------------------------------------------------------------
26,695 25,326 5.4%
-------------------------------------------------------------------
Other operating income 9,231 5,666 62.9%
-------------------------------------------------------------------
TOTAL OPERATING INCOME 124,892 125,434 (0.4%)
OTHER INCOME (EXPENSE)
Interest expense (35,267) (34,595) 1.9%
Income from unconsolidated
cellular entities 9,475 9,267 2.2%
Minority interest (2,871) (3,160) (9.1%)
Other income and expense 2,384 2,704 (11.8%)
Income tax expense (40,768) (40,125) 1.6%
-------------------------------------------------------------------
NET INCOME $ 57,845 59,525 (2.8%)
===================================================================
EARNINGS PER SHARE
Basic $ 0.41 0.43 (4.7%)
Diluted $ 0.41 0.42 (2.4%)
SHARES OUTSTANDING
Basic 139,995 138,852 0.8%
Diluted 141,732 141,461 0.2%
DIVIDENDS PER COMMON SHARE $ 0.0475 0.0450 5.6%
</TABLE>
CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
INCREASE
2000 1999 (DECREASE)
--------------------------------------------------------------------------------
In thousands, except
per share amounts
<S> <C> <C> <C>
TELEPHONE OPERATIONS
Operating revenues
Local service $ 178,592 180,109 (0.8%)
Network access 323,186 322,944 0.1%
Other 51,236 60,117 (14.8%)
-------------------------------------------------------------------
553,014 563,170 (1.8%)
-------------------------------------------------------------------
Operating expenses
Plant operations 122,539 124,150 (1.3%)
Customer operations 48,270 44,641 8.1%
Corporate and other 79,868 75,757 5.4%
Depreciation and amortization 134,991 139,955 (3.5%)
-------------------------------------------------------------------
385,668 384,503 0.3%
-------------------------------------------------------------------
Telephone operating income 167,346 178,667 (6.3%)
-------------------------------------------------------------------
WIRELESS OPERATIONS
Operating revenues
Service revenues 203,974 203,555 0.2%
Equipment sales 7,572 5,038 50.3%
-------------------------------------------------------------------
211,546 208,593 1.4%
-------------------------------------------------------------------
Operating expenses
Cost of equipment sold 14,536 9,648 50.7%
System operations 32,033 28,530 12.3%
General, administrative and
customer service 37,627 37,985 (0.9%)
Sales and marketing 41,556 27,542 50.9%
Depreciation and amortization 33,091 33,796 (2.1%)
-------------------------------------------------------------------
158,843 137,501 15.5%
-------------------------------------------------------------------
Wireless operating income 52,703 71,092 (25.9%)
-------------------------------------------------------------------
OTHER OPERATIONS
Operating revenues 71,552 59,243 20.8%
-------------------------------------------------------------------
Operating expenses
Cost of sales and other 52,789 45,512 16.0%
Depreciation and amortization 2,498 2,242 11.4%
-------------------------------------------------------------------
55,287 47,754 15.8%
-------------------------------------------------------------------
Other operating income 16,265 11,489 41.6%
-------------------------------------------------------------------
TOTAL OPERATING INCOME 236,314 261,248 (9.5%)
OTHER INCOME (EXPENSE)
Gain on sales of assets 9,910 49,959 (80.2%)
-------------------------------------------------------------------
Interest expense (71,309) (79,728) (10.6%)
Income from unconsolidated
cellular entities 8,016 16,112 (50.2%)
Minority interest (5,163) (22,100) (76.6%)
Other income and expense 6,613 5,614 17.8%
Income tax expense (77,252) (116,538) (33.7%)
-------------------------------------------------------------------
NET INCOME $ 107,129 114,567 (6.5%)
===================================================================
EARNINGS PER SHARE
Basic (1) $ 0.76 0.83 (8.4%)
Diluted (2) $ 0.76 0.81 (6.2%)
SHARES OUTSTANDING
Basic 139,874 138,455 1.0%
Diluted 141,729 141,245 0.3%
DIVIDENDS PER COMMON SHARE $ 0.0950 0.0900 5.6%
</TABLE>
(1) Excluding the effects of asset divestitures and nonrecurring gains and
losses, basic earnings per share were $.76 and $.81 for 2000 and 1999,
respectively
(2) Excluding the effects of asset divestitures and nonrecurring gains and
losses, diluted earnings per share were $.75 and $.79 for 2000 and 1999,
respectively
CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(UNAUDITED)
<TABLE>
<CAPTION>
Excludes the effect of asset divestitures INCREASE
and nonrecurring gains and losses 2000 1999 (DECREASE)
--------------------------------------------------------------------------------
In thousands, except
per share amounts
<S> <C> <C> <C>
TELEPHONE OPERATIONS
Operating revenues
Local service $ 178,592 165,698 7.8%
Network access 323,186 300,759 7.5%
Other 51,236 53,796 (4.8%)
-------------------------------------------------------------------
553,014 520,253 6.3%
-------------------------------------------------------------------
Operating expenses
Plant operations 122,539 112,140 9.3%
Customer operations 48,270 40,831 18.2%
Corporate and other 79,868 72,229 10.6%
Depreciation and amortization 134,991 129,497 4.2%
-------------------------------------------------------------------
385,668 354,697 8.7%
-------------------------------------------------------------------
Telephone operating income 167,346 165,556 1.1%
-------------------------------------------------------------------
WIRELESS OPERATIONS
Operating revenues
Service revenues 203,963 193,855 5.2%
Equipment sales 7,490 4,745 57.9%
-------------------------------------------------------------------
211,453 198,600 6.5%
-------------------------------------------------------------------
Operating expenses
Cost of equipment sold 14,459 9,406 53.7%
System operations 31,933 26,747 19.4%
General, administrative
and customer service 37,627 36,465 3.2%
Sales and marketing 41,547 26,910 54.4%
Depreciation and amortization 33,007 31,548 4.6%
-------------------------------------------------------------------
158,573 131,076 21.0%
-------------------------------------------------------------------
Wireless operating income 52,880 67,524 (21.7%)
-------------------------------------------------------------------
OTHER OPERATIONS
Operating revenues 71,552 56,926 25.7%
-------------------------------------------------------------------
Operating expenses
Cost of sales and other 52,285 42,893 21.9%
Depreciation and amortization 2,498 2,100 19.0%
-------------------------------------------------------------------
54,783 44,993 21.8%
-------------------------------------------------------------------
Other operating income 16,769 11,933 40.5%
-------------------------------------------------------------------
TOTAL OPERATING INCOME 236,995 245,013 (3.3%)
OTHER INCOME (EXPENSE)
Interest expense (71,284) (71,074) 0.3%
Income from unconsolidated
cellular entities 13,346 16,112 (17.2%)
Minority interest (5,163) (5,920) (12.8%)
Other income and expense 6,611 4,670 41.6%
Income tax expense (74,646) (76,970) (3.0%)
-------------------------------------------------------------------
NET INCOME $ 105,859 111,831 (5.3%)
===================================================================
EARNINGS PER SHARE
Basic $ 0.76 0.81 (6.2%)
Diluted $ 0.75 0.79 (5.1%)
SHARES OUTSTANDING
Basic 139,874 138,455 1.0%
Diluted 141,729 141,245 0.3%
DIVIDENDS PER COMMON SHARE $ 0.0950 0.0900 5.6%
</TABLE>
CenturyTel, Inc.
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2000 AND DECEMBER 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, December 31,
2000 1999
--------------------------------------------------------------------------------
(in thousands)
ASSETS
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 49,685 56,640
Other current assets 242,916 229,433
--------------------------------------------------------------------------------
Total current assets 292,601 286,073
--------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT
Telephone 3,510,277 3,439,469
Wireless 479,469 472,725
Other 328,961 281,713
Accumulated depreciation (2,082,816) (1,937,449)
--------------------------------------------------------------------------------
Net property, plant and equipment 2,235,891 2,256,458
--------------------------------------------------------------------------------
INVESTMENTS AND OTHER ASSETS
Excess cost of net assets acquired 1,621,491 1,644,884
Other 571,884 517,992
--------------------------------------------------------------------------------
Total investments and other assets 2,193,375 2,162,876
--------------------------------------------------------------------------------
TOTAL ASSETS $ 4,721,867 4,705,407
--------------------------------------------------------------------------------
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 75,022 62,098
Other current liabilities 261,690 247,079
--------------------------------------------------------------------------------
Total current liabilities 336,712 309,177
LONG-TERM DEBT 1,953,844 2,078,311
DEFERRED CREDITS AND OTHER LIABILITIES 483,760 469,927
STOCKHOLDERS' EQUITY 1,947,551 1,847,992
--------------------------------------------------------------------------------
TOTAL LIABILITIES AND EQUITY $ 4,721,867 4,705,407
================================================================================
</TABLE>
CAPITAL EXPENDITURES
SIX MONTHS ENDED JUNE 30, 2000 AND 1999
<TABLE>
<CAPTION>
INC
2000 1999 (DEC)
--------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Telephone $ 75,414 86,624 (12.9%)
Wireless 14,685 33,190 (55.8%)
Corporate and other 49,308 29,314 68.2%
---------------------------------------------------------------
Total capital expenditures $ 139,407 149,128 (6.5%)
===============================================================
</TABLE>
CAPITAL EXPENDITURES
THREE MONTHS ENDED JUNE 30, 2000 AND 1999
<TABLE>
<CAPTION>
INC
2000 1999 (DEC)
--------------------------------------------------------------------------------
(in thousands)
<S> <C> <C> <C>
Telephone $ 46,105 48,320 (4.6%)
Wireless 11,006 24,627 (55.3%)
Corporate and other 24,131 13,180 83.1%
---------------------------------------------------------------
Total capital expenditures $ 81,242 86,127 (5.7%)
===============================================================
</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
