-----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, G/JAt6LzucuihqnYti++FWDT9XjGhYpqQbJhhSMBWTxu2eHm2dh2djEa0/0PO70x W5Ifs3rw04FP6+YOLSKbpQ== 0000018926-04-000039.txt : 20040729 0000018926-04-000039.hdr.sgml : 20040729 20040729103004 ACCESSION NUMBER: 0000018926-04-000039 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040630 ITEM INFORMATION: FILED AS OF DATE: 20040729 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-50260 FILM NUMBER: 04937720 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 8-K 1 itemtwelve.txt ITEM 12 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 29, 2004 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 12. Results of Operations and Financial Condition The following information, except for our forecasts for the upcoming quarter and for 2004 and except for our references to non-GAAP financial measures (as defined in Regulation G promulgated by the Securities and Exchange Commission), shall be deemed incorporated by reference into any registration statement heretofore or hereafter filed by us under the Securities Act of 1933, as amended, except to the extent that such incorporated information is superceded by information as of a subsequent date that is included in or incorporated by reference into any such registration statement. None of the following information shall be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. On July 29, 2004, we issued a press release announcing our second quarter 2004 consolidated operating results. More complete information on our operating results will be included in our Quarterly Report on Form 10-Q for the period ended June 30, 2004, which we expect to file shortly with the Securities and Exchange Commission. The entire text of our July 29, 2004 press release is attached as Exhibit 99. 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. July 29, 2004 /s/ Neil A. Sweasy ------------------------------ Neil A. Sweasy Vice President and Controller Exhibit Index Exhibit Number Description of Exhibits - ------ ---------------------------------------------------------- 99 Press release of CenturyTel, Inc., dated July 29, 2004. EX-99.A 2 pressrelease.txt EARNINGS RELEASE EXHIBIT 99 FOR IMMEDIATE RELEASE FOR MORE INFORMATION CONTACT: July 29, 2004 Media: Patricia Cameron 318.388.9674 patricia.cameron@centurytel.com Investors: Tony Davis 318.388.9525 tony.davis@centurytel.com CenturyTel Reports Second Quarter Earnings - ------------------------------------------ Monroe, LA. . . CenturyTel, Inc. (NYSE Symbol: CTL) announces operating results for second quarter 2004. o Operating revenues increased 2.9% to $603.6 million from $586.7 million. o Operating cash flow (as defined in the attached financial schedules) rose to $320.7 million. o Net income was $83.3 million compared to $87.4 million in second quarter 2003. o Diluted earnings per share was $.60 in both second quarter 2004 and 2003. o Free cash flow (as defined in the attached financial schedules) was $119.8 million in second quarter 2004. o Through the second quarter, the Company had repurchased 9,862,700 shares of common stock under its share repurchase program for a total investment of nearly $284 million. - ------------------------------------------------------------------------------- Second Quarter Highlights Quarter Ended Quarter Ended % Change (In thousands, except per share 6/30/04 6/30/03 amounts and customer units) - ------------------------------------------------------------------------------- Operating Revenues $ 603,555 $ 586,729 2.9% Operating Cash Flow (1) $ 320,662 $ 313,046 2.4% Net Income $ 83,284 $ 87,367 (4.7)% Diluted Earnings Per Share $ .60 $ .60 -- Average Diluted Shares Outstanding 138,889 144,475 (3.9)% Capital Expenditures $ 94,269 $ 94,589 (0.3)% - ------------------------------------------------------------------------------- Telephone Access Lines 2,350,505 2,403,347 (2.2)% Long Distance Lines (2) 1,013,418 882,835 14.8% DSL Connections 108,820 67,976 60.1% - ------------------------------------------------------------------------------- (1) Operating Cash Flow is a non-GAAP financial measure. A reconciliation of this item to comparable GAAP measures is included in the attached financial schedules. (2) In first quarter 2004, the Company began reporting long distance units on a line basis instead of a customer basis. Second quarter 2003 has been restated on a line basis to ensure period-to-period comparability. "CenturyTel achieved solid revenue and operating cash flow growth and repurchased another 4.9 million shares of common stock during the quarter," Glen F. Post, III, chairman and chief executive officer, said. "We also prepaid $100 million of 8.25% senior notes in May, further strengthening CenturyTel's balance sheet and financial flexibility. While the $4.6 million prepayment costs negatively affected earnings for this quarter, the prepayment will save the Company over $8 million in annual interest expense." Operating revenues rose 2.9% to $603.6 million in second quarter 2004 from $586.7 million in second quarter 2003. This $16.8 million revenue increase primarily resulted from revenue generated by the fiber assets acquired during 2003, higher interstate access revenues related to prior periods, data revenue growth from DSL subscribers and data circuit additions, continued long distance subscriber growth and increased enhanced calling feature penetration. These increases more than offset revenue declines attributable to lower intrastate toll revenues and universal service funding, along with access line losses. Operating expenses increased 3.8% to $413.6 million from $398.3 million in second quarter 2003 due to the fiber assets acquired during 2003, continued DSL subscriber growth and increases in plant operations expenses, marketing expenses and depreciation and amortization. Operating cash flow increased 2.4% to $320.7 million from $313.0 million. CenturyTel achieved an operating cash flow margin of 53.1% during the quarter versus 53.4% in second quarter 2003. Net income was $83.3 million compared to $87.4 million in second quarter 2003. The increase in operating income and lower interest expense was more than offset by the previously announced increase in state income taxes and a $4.6 million pre-tax charge in second quarter 2004 associated with the prepayment of the Company's $100 million Series B senior notes. Diluted earnings per share was $.60 in both second quarter 2004 and 2003. "We continue to experience good customer demand for our communications service bundles as CenturyTel achieved two significant milestones during the second quarter, surpassing 1 million long distance lines and 100,000 DSL connections," Post said. "Strong demand for high-speed Internet service drove nearly a 40% increase in DSL revenues over second quarter 2003." For the first six months of 2004, operating revenues increased to $1.197 billion from $1.165 billion for the same period in 2003, a 2.8% increase. Operating cash flow, excluding nonrecurring items, was $631.2 million for the first half of 2004 compared to $619.6 million a year ago, a 1.9% increase. Operating income, excluding nonrecurring items, increased 1.4% to $373.5 million from $368.2 million in 2003. Operating cash flow and operating income for the first half of 2003 included a nonrecurring $5.0 million pre-tax partial recovery of amounts previously written off in connection with the WorldCom bankruptcy. For the first six months of 2004, under generally accepted accounting principles (GAAP), net income was $166.6 million compared to $171.3 million for the first six months of 2003. Diluted earnings per share was $1.18 in the first half of 2004 compared to $1.19 in the first half of 2003. For the third quarter 2004, CenturyTel expects total revenues of $590 to $605 million and diluted earnings per share of $.56 to $.60. For the full year 2004, diluted earnings per share is expected to be in the range of $2.25 to $2.35, a narrower range than our previous full year 2004 guidance due to fewer fully diluted shares outstanding as a result of share repurchases during the second quarter. These outlook figures are presented on a GAAP basis, excluding nonrecurring items and the potential impact of any future mergers, acquisitions, divestitures, share repurchases or other similar business transactions. Reconciliation to GAAP. This release includes certain non-GAAP financial measures, including but not limited to operating cash flow, free cash flow and adjustments to GAAP measures to exclude the effect of nonrecurring items. In addition to providing key metrics for management to evaluate the Company's performance, we believe these measurements assist readers in their understanding of period-to-period operating performance and in identifying historical and prospective trends. Reconciliations of non-GAAP financial measures to the most comparable GAAP measures are included in the attached financial statements. Reconciliation of additional non-GAAP financial measures that may be discussed during the earnings call described below will be available in the Investor Relations portion of the Company's Web site at www.centurytel.com. Investors are urged to consider these non-GAAP measures in addition to, and not in substitution for, measures prepared in accordance with GAAP. Investor Call. As previously announced, CenturyTel's management will host a conference call at 10:30 a.m. Central Time today. Interested parties can access the call by dialing 800.419.9873. The call will be accessible for replay until 1:00 p.m. Central Time, August 5, 2004, by calling 888.266.2081 and entering the conference ID number 510703. Investors can also listen to CenturyTel's earnings conference call and replay by accessing the Investor Relations portion of the Company's Web site at www.centurytel.com prior to August 19, 2004. In addition to historical information, this release includes certain forward-looking statements, estimates and projections that are based on current expectations only, and are subject to a number of risks, uncertainties and assumptions, many of which are beyond the control of the Company. Actual events and results may differ materially from those anticipated, estimated or projected if one or more of these risks or uncertainties materialize, or if underlying assumptions prove incorrect. Factors that could affect actual results include but are not limited to: the timing, success and overall effects of competition from a wide variety of competitive providers; the risks inherent in rapid technological change; the effects of ongoing changes in the regulation of the communications industry; the Company's ability to effectively manage its growth, including integrating newly-acquired businesses into the Company's operations, hiring adequate numbers of qualified staff, and successfully upgrading its billing and other information systems; possible changes in the demand for, or pricing of, the Company's products and services; the Company's ability to successfully introduce new product or service offerings on a timely and cost-effective basis; the Company's ability to collect its receivables from financially troubled communications companies; other risks referenced from time to time in the Company's filings with the Securities and Exchange Commission; and the effects of more general factors such as changes in interest rates, in accounting policies or practices, in operating, medical or administrative costs, in general market, labor 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, 2003. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The information contained in this release is as of July 29, 2004. The Company undertakes no obligation to update any of its forward-looking statements. CenturyTel, Inc. provides communications services including local, long distance, Internet access and data services to customers in 22 states. The company, headquartered in Monroe, Louisiana, is publicly traded on the New York Stock Exchange under the symbol CTL, and is included in the S&P 500 Index. CenturyTel is the 8th largest local exchange telephone company, based on access lines, in the United States. Visit CenturyTel at www.centurytel.com. CenturyTel, Inc. CONSOLIDATED STATEMENTS OF INCOME THREE MONTHS ENDED JUNE 30, 2004 AND 2003 (UNAUDITED)
Three months Three months In thousands, except ended ended Increase per share amounts June 30, 2004 June 30, 2003 (decrease) ------------------------------------------ OPERATING REVENUES Local service $ 180,142 178,360 1.0% Network access 245,515 248,220 (1.1%) Long distance 45,727 43,201 5.8% Data 68,169 60,672 12.4% Fiber transport and CLEC 18,321 9,036 102.8% Other 45,681 47,240 (3.3%) ----------------------------- 603,555 586,729 2.9% ----------------------------- OPERATING EXPENSES Cost of services and products 190,226 183,960 3.4% Selling, general and administrative 92,667 89,723 3.3% Depreciation and amortization 130,751 124,665 4.9% ----------------------------- 413,644 398,348 3.8% ----------------------------- OPERATING INCOME 189,911 188,381 0.8% OTHER INCOME (EXPENSE) Interest expense (53,089) (55,957) (5.1%) Income from unconsolidated cellular entity 2,126 1,590 33.7% Other income and expense (3,811) 974 (491.3%) Income tax expense (51,853) (47,621) 8.9% ----------------------------- NET INCOME $ 83,284 87,367 (4.7%) ============================ BASIC EARNINGS PER SHARE $ 0.60 0.61 (1.6%) DILUTED EARNINGS PER SHARE $ 0.60 0.60 - SHARES OUTSTANDING Basic 138,066 143,329 (3.7%) Diluted 138,889 144,475 (3.9%) DIVIDENDS PER COMMON SHARE $ 0.0575 0.055 4.5%
CenturyTel, Inc. CONSOLIDATED STATEMENTS OF INCOME SIX MONTHS ENDED JUNE 30, 2004 AND 2003 (UNAUDITED)
Six months ended June 30, 2004 Six months ended June 30, 2003 -------------------------------- ---------------------------------- As adjusted As adjusted Increase Less excluding Less excluding (decrease) non- non- non- non- Increase excluding In thousands, except As recurring recurring As recurring recurring (decrease) nonrecurring per share amounts reported items items reported items items as reported items -------------------------------- ---------------------------------- ------------------------- OPERATING REVENUES Local service $ 358,200 358,200 355,373 355,373 0.8% 0.8% Network access 486,472 486,472 494,550 494,550 (1.6%) (1.6%) Long distance 90,316 90,316 85,761 85,761 5.3% 5.3% Data 133,797 133,797 118,808 118,808 12.6% 12.6% Fiber transport and CLEC 35,753 35,753 14,931 14,931 139.5% 139.5% Other 92,721 92,721 95,320 95,320 (2.7%) (2.7%) -------------------------------- ---------------------------------- 1,197,259 - 1,197,259 1,164,743 - 1,164,743 2.8% 2.8% -------------------------------- ---------------------------------- OPERATING EXPENSES Cost of services and products 371,775 371,775 361,820 361,820 2.8% 2.8% Selling, general and administrative 194,273 194,273 178,339 (4,959)(1) 183,298 8.9% 6.0% Depreciation and amortization 257,743 257,743 251,430 251,430 2.5% 2.5% -------------------------------- ---------------------------------- 823,791 - 823,791 791,589 (4,959) 796,548 4.1% 3.4% -------------------------------- ---------------------------------- OPERATING INCOME 373,468 - 373,468 373,154 4,959 368,195 0.1% 1.4% OTHER INCOME (EXPENSE) Interest expense (105,632) (105,632) (111,549) (111,549) (5.3%) (5.3%) Income from unconsolidated cellular entity 4,185 4,185 3,159 3,159 32.5% 32.5% Other income and expense (1,507) (1,507) 42 42 (3,688.1%) (3,688.1%) Income tax expense (103,951) (103,951) (93,520) (1,736)(2) (91,784) 11.2% 13.3% -------------------------------- ---------------------------------- NET INCOME $ 166,563 - 166,563 171,286 3,223 168,063 (2.8%) (0.9%) ================================ ================================== BASIC EARNINGS PER SHARE $ 1.19 1.19 1.20 0.02 1.17 (0.8%) 1.7% DILUTED EARNINGS PER SHARE $ 1.18 1.18 1.19 0.02 1.17 (0.8%) 0.9% SHARES OUTSTANDING Basic 140,325 140,325 143,109 143,109 (1.9%) (1.9%) Diluted 141,118 141,118 144,136 144,136 (2.1%) (2.1%) DIVIDENDS PER COMMON SHARE $ 0.115 0.115 0.11 0.11 4.5% 4.5% NONRECURRING ITEMS (1) - Partial recovery of amounts previously written off in connection with WorldCom bankruptcy. (2) - Tax effect of item (1).
CenturyTel, Inc. CONSOLIDATED BALANCE SHEETS JUNE 30, 2004 AND DECEMBER 31, 2003 (UNAUDITED)
June 30, Dec. 31, 2004 2003 --------------------------------- (in thousands) ASSETS CURRENT ASSETS Cash and cash equivalents $ 96,386 203,181 Other current assets 240,494 259,758 --------------------------------- Total current assets 336,880 462,939 --------------------------------- NET PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment 7,254,584 7,184,155 Accumulated depreciation (3,906,613) (3,728,674) --------------------------------- Net property, plant and equipment 3,347,971 3,455,481 --------------------------------- INVESTMENTS AND OTHER ASSETS Goodwill 3,426,766 3,425,001 Other 572,721 552,431 --------------------------------- Total investments and other assets 3,999,487 3,977,432 --------------------------------- TOTAL ASSETS $ 7,684,338 7,895,852 ================================= LIABILITIES AND EQUITY CURRENT LIABILITIES Current maturities of long-term debt $ 121,456 72,453 Other current liabilities 412,441 398,930 --------------------------------- Total current liabilities 533,897 471,383 LONG-TERM DEBT 2,883,784 3,109,302 DEFERRED CREDITS AND OTHER LIABILITIES 913,513 836,651 STOCKHOLDERS' EQUITY 3,353,144 3,478,516 --------------------------------- TOTAL LIABILITIES AND EQUITY $ 7,684,338 7,895,852 =================================
CenturyTel, Inc. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)
Three months Three months ended ended In thousands June 30, 2004 June 30, 2003 -------------------------------- Operating cash flow and cash flow margin Operating income $ 189,911 188,381 Add: Depreciation and amortization 130,751 124,665 -------------------------------- Operating cash flow $ 320,662 313,046 ================================ Revenues $ 603,555 586,729 ================================ Operating income margin (operating income divided by revenues) 31.5% 32.1% ================================ Operating cash flow margin (operating cash flow divided by revenues) 53.1% 53.4% ================================ Free cash flow (prior to debt service requirements and dividends) Net income $ 83,284 87,367 Add: Depreciation and amortization 130,751 124,665 Less: Capital expenditures (94,269) (94,589) -------------------------------- Free cash flow $ 119,766 117,443 ================================ Free cash flow $ 119,766 117,443 Income from unconsolidated cellular entity (2,126) (1,590) Deferred income taxes 30,365 34,339 Changes in current assets and current liabilities (25,425) 11,017 Increase in other noncurrent assets (6,877) (4,750) Increase in other noncurrent liabilities 405 1,281 Retirement benefits 7,033 6,737 Other, net 2,508 706 Add: Capital expenditures 94,269 94,589 -------------------------------- Net cash provided by operating activities $ 219,918 259,772 ================================
CenturyTel, Inc. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)
Six months ended June 30, 2004 Six months ended June 30, 2003 -------------------------------- -------------------------------- As adjusted As adjusted Less excluding Less excluding non- non- non- non- In thousands As recurring recurring As recurring recurring reported items items reported items items -------------------------------- -------------------------------- Operating cash flow and cash flow margin Operating income $ 373,468 - 373,468 373,154 4,959 (1) 368,195 Add: Depreciation and amortization 257,743 257,743 251,430 251,430 -------------------------------- -------------------------------- Operating cash flow $ 631,211 - 631,211 624,584 4,959 619,625 ================================ ================================ Revenues $ 1,197,259 - 1,197,259 1,164,743 - 1,164,743 ================================ ================================ Operating income margin (operating income divided by revenues) 31.2% 31.2% 32.0% 31.6% ================================ ================================ Operating cash flow margin (operating cash flow divided by revenues) 52.7% 52.7% 53.6% 53.2% ================================ ================================ Free cash flow (prior to debt service requirements and dividends) Net income $ 166,563 - 166,563 171,286 3,223 (1) 168,063 Add: Depreciation and amortization 257,743 - 257,743 251,430 - 251,430 Less:Capital expenditures (156,014) - (156,014) (154,258) - (154,258) -------------------------------- -------------------------------- Free cash flow $ 268,292 - 268,292 268,458 3,223 265,235 ================================ ================================ Free cash flow $ 268,292 268,458 Income from unconsolidated cellular entity (4,185) (3,159) Deferred income taxes 57,038 43,841 Changes in current assets and current liabilities 32,270 115,827 Increase in other noncurrent assets (17,909) (11,501) Increase (decrease) in other noncurrent liabilities (3,544) 693 Retirement benefits 17,863 11,876 Other, net (2,481) (1,220) Add: Capital expenditures 156,014 154,258 ---------- ---------- Net cash provided by operating activities $ 503,358 579,073 ========== ========== NONRECURRING ITEMS (1) Partial recovery of amounts previously written off in connection with WorldCom bankruptcy (presented on both a pre-tax and after-tax basis).
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