-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D6WeYGO1fM5l1VZHjc2H9uxhSGQNRZEMGwYjV/2Gm9sjlfJ7SK4F26VTG6uBXBl4 tdmuXn8PkCCQ1Sb720n0XA== 0000018926-03-000046.txt : 20030627 0000018926-03-000046.hdr.sgml : 20030627 20030627113238 ACCESSION NUMBER: 0000018926-03-000046 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20021231 FILED AS OF DATE: 20030627 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTURYTEL INC CENTRAL INDEX KEY: 0000018926 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 720651161 STATE OF INCORPORATION: LA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-07784 FILM NUMBER: 03760021 BUSINESS ADDRESS: STREET 1: P O BOX 4065 STREET 2: 100 CENTURYTEL DR CITY: MONROE STATE: LA ZIP: 71203 BUSINESS PHONE: 3183889000 MAIL ADDRESS: STREET 1: 100 CENTURYTEL DR STREET 2: P O BOX 4065 CITY: MONROE STATE: LA ZIP: 71203 FORMER COMPANY: FORMER CONFORMED NAME: CENTURY TELEPHONE ENTERPRISES INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: CENTRAL TELEPHONE & ELECTRONICS CORP DATE OF NAME CHANGE: 19720512 11-K 1 ungrpincen.txt UNION GROUP INCENTIVE PLAN 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, 2002 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: CENTURYTEL, INC. UNION GROUP INCENTIVE PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: CENTURYTEL, INC. 100 CENTURYTEL 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 CenturyTel, Inc. Union Group Incentive Plan as of December 31, 2002 and 2001, and the related statement of changes in net assets available for benefits for the year ended December 31, 2002. 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 auditing standards generally accepted in the United States of America. 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 CenturyTel, Inc. Union Group Incentive Plan as of December 31, 2002 and 2001, and the changes in net assets available for benefits for the year ended December 31, 2002 in conformity with accounting principles generally accepted in the United States of America. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is 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. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is 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 6, 2003 CENTURYTEL, INC. UNION GROUP INCENTIVE PLAN Statements of Net Assets Available for Benefits December 31, 2002 and 2001
2002 2001 - ------------------------------------------------------------------------------- PLAN ASSETS Investments, at fair value $ 26,108,872 23,835,597 Contributions receivable - employer 191 38,891 Contributions receivable - participants 473 101,165 - ------------------------------------------------------------------------------- NET ASSETS AVAILABLE FOR BENEFITS $ 26,109,536 23,975,653 ===============================================================================
See accompanying notes to financial statements. CENTURYTEL, INC. UNION GROUP INCENTIVE PLAN Statement of Changes in Net Assets Available for Benefits For the year ended December 31, 2002
- ------------------------------------------------------------------------------- Additions to net assets: Investment income (loss): Net appreciation (depreciation) in fair value of investments: Mutual funds $ (2,808,198) Common stocks 5,430 Dividend and other income 695,000 Interest income 129,958 - ------------------------------------------------------------------------------- Net investment income (loss) (1,977,810) - ------------------------------------------------------------------------------- Contributions: Participants 4,731,530 Company 1,387,473 - ------------------------------------------------------------------------------- Total contributions 6,119,003 - ------------------------------------------------------------------------------- Total investment income (loss) and contributions 4,141,193 - ------------------------------------------------------------------------------- Deductions from net assets: Participant withdrawals 2,007,310 - ------------------------------------------------------------------------------- Net increase 2,133,883 Net assets available for benefits: Beginning of year 23,975,653 - ------------------------------------------------------------------------------- End of year $ 26,109,536 ===============================================================================
See accompanying notes to financial statements. CENTURYTEL, INC. UNION GROUP INCENTIVE PLAN Notes to Financial Statements December 31, 2002 and 2001 (1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PROVISIONS OF THE PLAN Basis of Presentation The CenturyTel, Inc. Union Group Incentive Plan (the Plan) was established on June 1, 1983. The accompanying financial statements of the Plan have been prepared on the accrual basis of accounting and present the net assets available for benefits as of December 31, 2002 and 2001 and changes in net assets available for benefits for the year ended December 31, 2002. The Plan has made estimates in preparing the accompanying financial statements in accordance with accounting principles generally accepted in the United States of America. Actual results could differ from those estimates. 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 eligible employee of CenturyTel, Inc. (the Company) whose compensation and conditions of employment are covered by certain collective bargaining agreements. In order to participate in the Plan, an employee must execute a Salary Deferral Agreement with the Company. In the Salary Deferral Agreement, which is executed either on-line or by telephone, an employee agrees to a deferral of between one percent and twenty-five percent of his base pay; however, the total amount contributed to the Plan cannot exceed $11,000 for 2002 (as adjusted from year to year in accordance with Federal Law). The percentage of compensation a participant elects to defer applies to the participant's W-2 earnings not in excess of $200,000 for 2002 (as adjusted in accordance with Federal Law) excluding severance pay, disability pay, reimbursements or other expense allowances, fringe benefits, moving expenses, deferred compensation, and welfare benefits. The amount of compensation deferred by each participant is credited to an account (Elective Deferral Account) maintained for each participant by the Trustee. Effective June 3, 2002, participants age 50 years or older are allowed to make an additional contribution to the Plan each year in excess of the otherwise prescribed limits. The amount of the allowable additional contribution for a participant in 2002 was $1,000; the amount will increase by $1,000 each year to a maximum of $5,000 in 2006 (which will thereafter be adjusted annually). 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" contribution described in Section 402(c) or 408(d)(3) of the Code. Such a rollover will be credited to a rollover account on behalf of the participant (the Rollover/Transfer Account). As of the end of each payroll period, the Company contributes to an account (Employer Match Account) for each participant a contribution equal to a percentage, as determined by the participant's applicable collective bargaining agreement, of each such participant's contribution during such payroll period; however, this matching contribution applies only to the first 6% of such participant's base compensation contributed to the Plan by the employee. During 2002 the Company contributed $1,387,473 to the Employer Match Account. The interest of a participant in his Elective Deferral Account and his Rollover/Transfer Account is fully vested and non-forfeitable at all times. The interest of a participant in his Employer Match Account vests as follows: Years of Service Percentage Vested ---------------- ----------------- Less than 1 0% 1 20 2 40 3 60 4 80 5 100 In the event of death, disability, or upon reaching age 65, the Employer Match Account becomes fully vested. Reports to Participants Participants are furnished with quarterly statements which set forth the status of their accounts in the Plan. Forfeitures A participant's non-vested account balances shall be forfeited as of the date upon which the participant's employment has terminated with the Company. Forfeiture amounts shall be utilized first to satisfy any restorations for the year and any remaining forfeitures shall be applied to offset future employer contributions or pay plan expenses. 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 vested interest in the Plan may be distributed to him or to his beneficiary in a lump sum or in periodic installments. 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 investment accounts prior to normal distribution requirements being met. A participant may make withdrawals from his Rollover/Transfer Account at any time. In addition, a hardship withdrawal may be made from an Elective Deferral Account or a Rollover/Transfer 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, the prevention of eviction or foreclosure from the Participant's principal residence, or for the purchase of 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. Loans to Participants The Plan has a provision whereby a participant can borrow from his Elective Deferral Account or Rollover/Transfer Account. The maximum loan is $50,000 reduced by the excess, if any, of the highest outstanding loan balance during the previous year over the outstanding balance on the date of the new loan or 50% of the vested account balance. The loans are repaid through payroll deductions and the interest rate is the prime rate published in the Wall Street Journal on the last day of the previous quarter plus 1%. 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 fifteen years. Trustee The Trustee of the Plan, as of December 31, 2002, was T. Rowe Price Trust Company (T. Rowe Price). 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. Investment Valuation and Income Recognition Investments in CenturyTel, Inc. Common Stock (CenturyTel Common Stock) are valued at the closing market price on December 31, 2002 and 2001, respectively. Other investments in the funds, which consist of shares of mutual funds, are valued by the Trustee based on the market value at year-end of the underlying assets of each fund. Purchases and sales of securities are recorded on a trade date basis. Loans to participants are valued at principal amount outstanding which approximates market value. Interest income is recorded on the accrual basis. Plan Termination Although it has not expressed any intention to do so, the Company has the right under the Plan to change, suspend or terminate the Plan at any time, subject to the provisions set forth in the Employee Retirement Income Security Act of 1974. However, the Company is required to comply with all relevant provisions of the applicable labor agreements. (2) DESCRIPTION OF THE FUNDS The following is a description of each of the funds which had outstanding balances and were available to Plan participants as of December 31, 2002: (a) T. Rowe Price Equity Index 500 Fund - consists of investments in the same stocks and in substantially the same percentages as the S & P 500 Index ($3,343,721 and $3,692,293 at December 31, 2002 and 2001, respectively). (b) CenturyTel Common Stock Fund - consists of shares of CenturyTel Common Stock ($789,472 and $221,291 at December 31, 2002 and 2001, respectively). (c) Loan Fund - represents loans to participants from the participants' investment accounts ($1,679,094 and $1,366,015 at December 31, 2002 and 2001, respectively). (d) T. Rowe Price Summit Cash Reserves Fund - consists primarily of investments in various money market instruments ($5,775,966 and $5,207,044 at December 31, 2002 and 2001, respectively). (e) T. Rowe Price Equity Income Fund - consists primarily of investments in U. S. and foreign common stocks ($7,519,545 and $7,946,349 at December 31, 2002 and 2001, respectively). (f) Janus Overseas Fund - consists primarily of investments in foreign equity securities ($294,252 and $232,473 at December 31, 2002 and 2001, respectively). (g) Janus Fund - consists primarily of investments in U. S. and foreign equity securities ($792,731 and $779,351 at December 31, 2002 and 2001, respectively). (h) T. Rowe Price Mid-Cap Growth Fund - consists primarily of investments in common stocks of companies whose market capitalization falls within the range of companies in the S&P MidCap 400 Index ($1,003,947 and $590,265 at December 31, 2002 and 2001, respectively). (i) Morgan Stanley Dean Witter Small Company Growth Portfolio Fund - consists primarily of investments in common stocks of small companies ($500,714 and $416,529 at December 31, 2002 and 2001, respectively). (j) PIMCO Total Return Fund - consists primarily of investments in debt securities ($4,017,905 and $3,225,940 at December 31, 2002 and 2001, respectively). (k) BGI Asset Allocation Fund - consists primarily of investments in common stocks, U. S. Treasury bonds and money market instruments ($113,042 and $39,026 at December 31, 2002 and 2001, respectively). (l) BGI LifePath Income 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) in the near future ($53,484 and $19,607 at December 31, 2002 and 2001, respectively). (m) BGI 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 ($77,375 and $43,177 at December 31, 2002 and 2001, respectively). (n) BGI 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 ($53,425 and $30,960 at December 31, 2002 and 2001, respectively). (o) BGI 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 ($71,576 and $11,780 at December 31, 2002 and 2001, respectively). (p) BGI 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 ($22,623 and $13,497 at December 31, 2002 and 2001, respectively). Investments in T. Rowe Price Equity Index 500 Fund, Loan Fund, T. Rowe Price Summit Cash Reserves Fund, T. Rowe Price Equity Income Fund and PIMCO Total Return Fund were each greater than 5% of assets available for benefits at December 31, 2002. A participant may instruct that all contributions to his accounts be allocated among the various funds. A participant may change his investment allocation instructions and contribution percentage at any time. (3) INCOME TAXES The Plan and related trust are designed to 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 March 1996 related to the Plan. The Plan has been amended and restated 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 T. Rowe Price, Barclays Global Investors Funds, Inc. (Barclays), Morgan Stanley Dean Witter Investment Management Inc. (Morgan Stanley), Janus Capital Corporation (Janus), or Pacific Investment Management Company (PIMCO). T. Rowe Price is the Trustee as defined by the Plan. Therefore, T. Rowe Price, Barclays, Morgan Stanley, Janus and PIMCO qualify as parties-in- interest. Fees paid by the Company to T. Rowe Price for trustee, record keeping and other services amounted to $67,505 for the year ended December 31, 2002. (5) CONCENTRATION OF INVESTMENTS Substantially all of the assets available for benefits were invested in mutual funds managed by T. Rowe Price, Janus, Barclays, Morgan Stanley or PIMCO. The remaining assets available for benefits are invested in CenturyTel Common Stock and loans to participants. CENTURYTEL, INC. UNION GROUP INCENTIVE PLAN Schedule H, Line 4i - Schedule of Assets (Held at End of Year) December 31, 2002
Identity of issuer, borrower, Current lessor or similar party Description of Investment Value - ------------------------------------------------------------------------------------------------------- Investment in CenturyTel Common Stock 26,871 shares at $29.38 per share $ 789,472 Loan Fund (interest rates ranged from 4.74% to 12.5%) - 1,679,094 (Note 1) Investment in Mutual Funds for Qualified Employee Benefit Plans: Managed by Barclays: Asset Allocation Fund 13,786 shares at $8.20 per share 113,042 LifePath Income Fund 5,332 shares at $10.03 per share 53,484 LifePath 2010 Fund 7,151 shares at $10.82 per share 77,375 LifePath 2020 Fund 4,493 shares at $11.89 per share 53,425 LifePath 2030 Fund 6,192 shares at $11.56 per share 71,576 LifePath 2040 Fund 1,844 shares at $12.27 per share 22,623 Managed by Janus: Janus Overseas Fund 19,245 shares at $15.29 per share 294,252 Janus Fund 44,485 shares at $17.82 per share 792,731 Managed by Morgan Stanley: Small Co. Growth Portfolio Fund 68,969 shares at $7.26 per share 500,714 Managed by PIMCO: PIMCO Total Return Fund 376,561 shares at $10.67 per share 4,017,905 (Note 1) Managed by T. Rowe Price: Equity Income Fund 379,967 shares at $19.79 per share 7,519,545 (Note 1) Equity Index 500 Fund 141,264 shares at $23.67 per share 3,343,721 (Note 1) Mid-Cap Growth Fund 32,344 shares at $31.04 per share 1,003,947 Summit Cash Reserves Fund 5,775,966 shares at $1.00 per share 5,775,966 (Note 1) - ------------------------------------------------------------------------------------------------------- $ 26,108,872 =======================================================================================================
Barclays, Janus, Morgan Stanley, PIMCO and T. Rowe Price 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) Information on cost of investments is excluded as all investments are participant directed. 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. CenturyTel, Inc. Union Group Incentive Plan June 27, 2003 /s/ R. Stewart Ewing, Jr. ------------------------- R. Stewart Ewing, Jr. Retirement Committee Member and Executive Officer of Issuer of Plan Securities CENTURYTEL, INC. UNION GROUP INCENTIVE PLAN Index to Exhibits Exhibit Number - ------------------------------------------------------------------------ 23.1 Independent Auditors' Consent 99 Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. EX-23 3 exhibit23.txt AUDITORS CONSENT EXHIBIT 23.1 ------------ INDEPENDENT AUDITORS' CONSENT ----------------------------- The Board of Directors CenturyTel, Inc.: We consent to incorporation by reference in the registration statement (No. 333-64992) on Form S-8 of CenturyTel, Inc. of our report dated June 6, 2003 relating to the statements of net assets available for benefits of CenturyTel, Inc. Union Group Incentive Plan as of December 31, 2002 and 2001, and the related statement of changes in net assets available for benefits for the year ended December 31, 2002, and related financial statement schedule as of December 31, 2002, which report appears in the December 31, 2002 annual report on Form 11-K of CenturyTel, Inc. Union Group Incentive Plan. KPMG LLP /s/ KPMG LLP Shreveport, Louisiana June 26, 2003 EX-99 4 exhibit99.txt CERTIFICATION EXHIBIT 99 ---------- June 27, 2003 VIA EDGAR TRANSMISSION - ---------------------- Securities and Exchange Commission 450 Fifth Street, NW Washington, D.C. 20549 Re: CenturyTel, Inc. Union Group Incentive Plan Certification of Contents of Form 11-K for the period ending December 31, 2002, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Ladies and Gentlemen: In connection with the annual report on Form 11-K for the CenturyTel, Inc. Union Group Incentive Plan (the "Plan") for the period ending December 31, 2002 as filed with the Securities and Exchange Commission on the date hereof, the undersigned hereby certifies that the Form 11-K fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and that the information contained in the Form 11-K fairly presents, in all material respects, the financial condition and results of operations of the Plan for the period covered by such report. This certification is being furnished as an exhibit to the Form 11-K under Section 906 of the Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, and should not be deemed to be filed with the Securities and Exchange Commission, either as a part of the Form 11-K or otherwise. A signed original of this written statement (or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form below) has been provided to CenturyTel, Inc., the Plan sponsor, and will be retained by CenturyTel, Inc. and furnished to the Securities and Exchange Commission or its staff upon request. Very truly yours, /s/ R. Stewart Ewing, Jr. - ------------------------- R. Stewart Ewing, Jr. Retirement Committee Member and Executive Vice President and Chief Financial Officer of the Plan Sponsor -----END PRIVACY-ENHANCED MESSAGE-----