-----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, Cptqsw/Vy3Sp2zDjVASoznQH/FlXz67uwieRuksUP7ursB818Hd/1Q3UNIG2pzI1 Uht6tBZcbpl0SstwHExmqg== 0000018926-08-000002.txt : 20080214 0000018926-08-000002.hdr.sgml : 20080214 20080214110627 ACCESSION NUMBER: 0000018926-08-000002 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20071231 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20080214 DATE AS OF CHANGE: 20080214 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: 001-07784 FILM NUMBER: 08609793 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 file8k.htm 4TH QTR EARNINGS RELEASE Unassociated Document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

 
FORM 8-K

 
 
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):
 

 
February 14, 2008

 
 
CenturyTel, Inc.
(Exact name of registrant as specified in its charter)

 
Louisiana
1-7784
72-0651161
(State or other jurisdiction of
(Commission File Number)
(I.R.S. Employer
incorporation or organization)
 
Identification No.)
 
 
 

 
100 CenturyTel Drive, Monroe, Louisiana 71203
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (318) 388-9000
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240. 14a-12)
 
 
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
Item 2.02.     Results of Operations and Financial Condition.

The following information, except for any forward-looking statements (including our forecasts for the upcoming quarter and year) 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 and 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, or otherwise subject to the liabilities of that section.

On February 14, 2008, we issued a press release announcing our fourth quarter 2007 consolidated operating results. More complete information on our operating results will be included in our Annual Report on Form 10-K  for the year ended December 31, 2007, which we expect to file shortly with the Securities and Exchange Commission. The complete press release is included as Exhibit 99.

Item 9.01.     Financial Statements and Exhibits.

(d)  
   Exhibit.

99  
   Press release dated February 14, 2008 reporting fourth quarter 2007 operating results.


SIGNATURES

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 hereunto duly authorized.

 
   
CENTURYTEL, INC.
     
     
 Dated: February 14, 2008  
By:/s/ Neil A. Sweasy    
   
Neil A. Sweasy
   
Vice President and Controller
EX-99.1 2 exh99.htm PRESS RELEASE OF EARNINGS AND FINANCIALS exh99.htm
Exhibit 99.1

FOR IMMEDIATE RELEASE:
FOR MORE INFORMATION CONTACT:
February 14, 2008
Tony Davis 318.388.9525
tony.davis@centurytel.com


CenturyTel Reports Fourth Quarter 2007 Earnings

Monroe, La... CenturyTel, Inc. (NYSE: CTL) announces operating results for fourth quarter 2007.


•           Operating revenues, excluding nonrecurring items, increased 8.3% to $657.8 million from $607.7 million in fourth quarter 2006. Operating revenues, reported under GAAP, were $656.6 million.

           Operating cash flow (as defined in the attached financial schedules), excluding nonrecurring items, grew 7.1% to $321.5 million from $300.0 million in fourth quarter 2006.

           Net income, excluding nonrecurring items, increased 13.1% to $89.8 million from $79.4 million in fourth quarter 2006. Net income, reported under GAAP, was $115.0 million compared to
             $72.2 million in fourth quarter 2006.

           Diluted earnings per share, excluding nonrecurring items, grew 20.6% to $.82 from $.68 in fourth quarter 2006, while GAAP diluted earnings per share was $1.04 in fourth quarter 2007 and
             $.62 in fourth quarter 2006.

           Free cash flow (as defined in the attached financial schedules), excluding nonrecurring items, was $85.6 million in fourth quarter 2007 and a record $564.5 million for full year 2007.

           Over 2.8 million shares were repurchased and retired for $122.1 million during the quarter.



Fourth Quarter Highlights
                 
(excluding nonrecurring items reflected in the attached financial schedules)
 
Quarter ended
   
Quarter ended
   
% Change
 
(In thousands, except per share amounts and subscriber data)
 
12/31/2007
   
12/31/2006
       
                   
Operating Revenues
  $ 657,846     $ 607,695       8.3 %
Operating Cash Flow (1)
  $ 321,472     $ 300,039       7.1 %
Net Income
  $ 89,822     $ 79,449       13.1 %
Diluted Earnings Per Share
  $ .82    
$
.68       20.6 %
Average Diluted Shares Outstanding
    110,119       118,874       (7.4) %
Capital Expenditures
  $ 141,744     $ 101,037       40.3 %
                         
Access Lines (2)
    2,135,000       2,094,000       2.0 %
High-Speed Internet Customers (2)
    555,000       369,000       50.4 %
 
(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)  
Quarter ended 12/31/2007 access lines and high-speed Internet customers include the effects of our April 2007 Madison River acquisition. Excluding the effects of this acquisition,
access lines decreased 5.7% and high-speed Internet customers increased 34.9%.
 
“CenturyTel achieved strong fourth quarter and full year 2007 results driven by solid demand for broadband services, the acquisition of the Madison River properties and our success in aligning our costs with the changing landscape of our business,” Glen F. Post, III, chairman and chief executive officer, said. “We remain focused on our goal of being the premier broadband company in our markets, as high-speed Internet customers and data revenues increased 50% and 31%, respectively, during 2007.”
 
     Operating revenues, excluding nonrecurring items, increased 8.3% to $657.8 million in fourth quarter 2007 from $607.7 million in fourth quarter 2006. Revenue increases during the quarter of approximately $73 million resulted primarily from $49 million in revenue contribution from the Madison River properties acquired in second quarter 2007, along with growth in high-speed Internet customers and long distance minutes of use. These increases were partially offset by revenue declines of approximately $23 million primarily attributable to previously anticipated access line losses and lower access revenues, along with lower revenues under the amended satellite television agreement.

     Operating expenses, excluding nonrecurring items, increased 9.2% to $473.9 million from $434.0 million in fourth quarter 2006, principally due to expenses associated with the Madison River properties, growth in high-speed Internet customers and marketing activities, which were partially offset by lower personnel costs.

“We generated record free cash flow of $564 million this year while also making strategic capital investments of $326 million,” Post said. “Additionally, we returned nearly $490 million to shareholders during 2007 through the repurchase of nearly 10.2 million common shares for approximately $460 million and $29 million in cash dividends.”

      Operating cash flow, excluding nonrecurring items, for fourth quarter 2007 grew 7.1% to $321.5 million from $300.0 million in fourth quarter 2006. CenturyTel achieved an operating cash flow margin, excluding nonrecurring items, of 48.9% during the quarter versus 49.4% in fourth quarter 2006. This margin decline was expected due to the growth in lower margin revenues and the anticipated decline in higher margin revenues discussed above.

      Other income and income tax expense were favorably impacted during fourth quarter 2007 due, respectively, to higher income from the Company’s equity interest in a wireless partnership and a lower effective tax rate.

      Net income, excluding nonrecurring items, was $89.8 million, a 13.1% increase from $79.4 million in fourth quarter 2006. Diluted earnings per share, excluding nonrecurring items, increased 20.6% to $.82 in fourth quarter 2007 compared to $.68 in fourth quarter 2006 due to the items discussed above and the reduction in diluted shares outstanding as a result of share repurchases during 2007.

      For the year 2007, operating revenues, excluding nonrecurring items, were $2.606 billion compared to $2.446 billion in 2006, a 6.6% increase. Operating cash flow, excluding nonrecurring items, was $1.292 billion for 2007 compared to $1.197 billion a year ago. Net income, excluding nonrecurring items, was $354.3 million compared to $303.0 million in 2006, while diluted earnings per share was $3.16 compared to $2.52 in 2006.

      Under generally accepted accounting principles (GAAP), net income for fourth quarter 2007 was $115.0 million compared to $72.2 million for fourth quarter 2006. Diluted earnings per share was $1.04 in fourth quarter 2007 compared to $.62 in fourth quarter 2006. Fourth quarter 2007 results reflect an after-tax benefit of $1.8 million related to hurricane-related insurance reimbursements, an after-tax benefit of $2.4 million related to the liquidation of Rural Telephone Bank stock, and a $32.7 million tax benefit related to the adjustment of income tax reserves, which were partially offset by $12.2 million of after-tax impairment charges associated with certain operating and non-operating investments described further in the attached financial schedules. Fourth quarter 2006 results reflect after-tax impairment charges of $7.2 million associated with certain non-operating investments.

Under GAAP, for the year 2007, the Company reported net income of $418.4 million, or $3.72 per diluted share, compared to net income of $370.0 million, or $3.07 per diluted share, for the year 2006. See the accompanying financial schedules for detail of the Company’s nonrecurring items for the years 2007 and 2006.

      Outlook for 2008. For full year 2008, CenturyTel anticipates operating revenues to be flat to modestly higher than 2007 operating revenues. The Company expects revenue increases associated with the full year contribution of the Madison River acquisition versus the eight months recognized in 2007 and growth in high-speed Internet and data revenues. These increases are expected to offset revenue declines associated with the $42 million of revenue settlements recorded in third quarter 2007 that will not reoccur in 2008, lower access revenues, reduced universal service funding and access line losses.

For full year 2008, CenturyTel anticipates diluted earnings per share to be in the range of $2.90 to $3.00. The following items are expected to have a positive impact on 2008 diluted earnings per share:

· 
anticipated further penetration of broadband service offerings and expected cost efficiencies (including incremental synergies associated with the Madison River properties) - $.16 to $.20;  and
· 
share repurchases made during 2007 and January 2008 along with anticipated lower interest expense - $.22 to $.24.
 
The following items are expected to negatively impact 2008 diluted earnings per share:

· 
lower revenue settlements mentioned above -  ($.23) to ($.25);
· 
reduced interstate universal service funding - ($.08) to ($.10); and
· 
anticipated access line losses of 4.5% to 6.0%, continued pressure on access revenues and expected lower income in 2008 from the Company’s equity interest in a wireless
partnership - ($.28) to ($.30).
 
For first quarter 2008, CenturyTel expects total revenues of $646 to $656 million and diluted earnings per share of $.69 to $.73.

Finally, the Company expects its capital expenditures in 2008 to be approximately $300 million, an 8% reduction from 2007 capital expenditures of $326 million.

These 2008 outlook figures exclude the effects of nonrecurring items, any share repurchases made after January 31, 2008, and any future mergers, acquisitions, divestitures 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 investors 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 schedules. 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 866.244.4635.  The call will be accessible for replay through February 20, 2008, by calling 888.266.2081 and entering the conference ID number 1185533. 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 March 5, 2008.


    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 adjust to changes in the communications industry; the Company’s ability to effectively  manage its expansion opportunities, including  successfully integrating newly-acquired properties into the Company’s operations and  retaining and hiring key personnel; possible changes in the demand for, or pricing of, the Company’s products and services; the Company’s continued access to credit markets on favorable terms; 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; the Company’s ability to successfully negotiate collective bargaining agreements on reasonable terms without work stoppages; the effect of adverse weather; other risks referenced from time to time in the Company’s filings with the Securities and Exchange Commission (the “SEC”); and the effects of more general factors such as changes in interest rates, in tax 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, 2006, as updated by the Company’s subsequent SEC reports.  You should be aware that new factors may emerge from time to time and it is not possible for management to identify all such factors, nor can it predict the impact of each such factor on the business or the extent to which any one or more factors may cause actual results to differ from those reflected in any forward-looking statements. You are further 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 February 14, 2008.  The Company undertakes no obligation to update any of its forward-looking statements for any reason.
 

      CenturyTel (NYSE:CTL) is a leading provider of communications, high-speed Internet and entertainment services in small-to-mid-size cities through our broadband and fiber transport networks. Included in the S&P 500 Index, CenturyTel delivers advanced communications with a personal touch to customers in 25 states. Visit us at www.centurytel.com.



###


 
 
CenturyTel, Inc.
 CONSOLIDATED STATEMENTS OF INCOME
 THREE MONTHS ENDED DECEMBER 31, 2007 AND 2006
 (UNAUDITED)
 
 
 
                                                     
     
Three months ended December 31, 2007
   
Three months ended December 31, 2006
             
                   
As adjusted
                 
As adjusted
         
Increase
 
           
Less
     
excluding
         
Less
     
excluding
         
(decrease)
 
           
non-
     
non-
         
non-
     
non-
   
Increase
   
excluding
 
     
As
   
recurring
     
recurring
   
As
   
recurring
     
recurring
   
(decrease)
   
nonrecurring
 
 In thousands, except per share amounts
 
reported
   
items
     
items
   
reported
   
items
     
items
   
as reported
   
items
 
                                                       
 OPERATING REVENUES
                                                   
 
 Voice*
  $ 225,525               225,525       214,208               214,208       5.3 %     5.3 %
 
 Network access
    215,415       (1,216 )   (1 )   216,631       211,819               211,819       1.7 %     2.3 %
 
 Data
    122,055       (68 )   (1 )   122,123       92,337               92,337       32.2 %     32.3 %
 
 Fiber transport and CLEC
    38,466                   38,466       39,770               39,770       (3.3 %)     (3.3 %)
 
 Other*
    55,101                   55,101       49,561               49,561       11.2 %     11.2 %
        656,562       (1,284 )         657,846       607,695       -         607,695       8.0 %     8.3 %
                                                                         
 OPERATING EXPENSES
                                                                     
 
 Cost of services and products
    251,026       13,740     (2 )   237,286       223,132                 223,132       12.5 %     6.3 %
 
 Selling, general and administrative
    99,008       (80 )   (2 )   99,088       84,524                 84,524       17.1 %     17.2 %
 
 Depreciation and amortization
    137,554                   137,554       126,360                 126,360       8.9 %     8.9 %
        487,588       13,660           473,928       434,016       -         434,016       12.3 %     9.2 %
                                                                         
 OPERATING INCOME
    168,974       (14,944 )         183,918       173,679       -         173,679       (2.7 %)     5.9 %
                                                                         
 OTHER INCOME (EXPENSE)
                                                                     
 
 Interest expense
    (53,102 )                 (53,102 )     (47,375 )               (47,375 )     12.1 %     12.1 %
 
 Other income (expense)
    10,639       2,206     (3 )   8,433       (9,306 )     (11,715 )   (5 )   2,409       (214.3 %)     250.1 %
 
 Income tax expense
    (11,478 )     37,949     (4 )   (49,427 )     (44,765 )     4,499     (6 )   (49,264 )     (74.4 %)     0.3 %
                                                                           
 NET INCOME
  $ 115,033       25,211           89,822       72,233       (7,216 )         79,449       59.3 %     13.1 %
                                                                           
 BASIC EARNINGS PER SHARE
  $ 1.05       0.23           0.82       0.63       (0.06 )         0.70       66.7 %     17.1 %
 DILUTED EARNINGS PER SHARE
  $ 1.04       0.23           0.82       0.62       (0.06 )         0.68       67.7 %     20.6 %
                                                                           
AVERAGE SHARES OUTSTANDING
                                                                 
 
 Basic
    109,008                   109,008       113,629                   113,629       (4.1 %)     (4.1 %)
 
 Diluted
    110,119                   110,119       118,874                   118,874       (7.4 %)     (7.4 %)
                                                                           
DIVIDENDS PER COMMON SHARE
  $ 0.0650                   0.0650       0.0625                   0.0625       4.0 %     4.0 %
                                                                           
                                                                           
                                                                           
 NONRECURRING ITEMS
                                                                       
 
(1) - Revenue reduction associated with gain on liquidation of Rural Telephone Bank.
                                     
 
(2) - Includes write-down due to impairment of CLEC assets ($16.6 million), net of insurance reimbursements associated with previously recorded hurricane related expenses ($3.0 million).
 
 
(3) - Includes gain on liquidation of Rural Telephone Bank ($5.2 million), net of $3.0 million impairment of a nonoperating investment.
 
 
(4) - Includes $32.7 million benefit due to the recognition of previously unrecognized tax benefits in accordance with FIN 48, plus the aggregate tax effect of Items (1) through (3).
 
 
(5) - Impairment of nonoperating investments.
 
 
(6) - Tax effect of Item (5).
 
                                                                           
*
Revenues from voice mail services previously reflected in "Other" revenues have been reclassified to "Voice" revenues for all periods.
         


 CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
TWELVE MONTHS ENDED DECEMBER 31, 2007 AND 2006
 (UNAUDITED)
 
 


      
Twelve months ended December 31, 2007
   
Twelve months ended December 31, 2006
             
                     
As adjusted
                   
As adjusted
         
Increase
 
           
Less
       
excluding
         
Less
       
excluding
         
(decrease)
 
           
non-
       
non-
         
non-
       
non-
   
Increase
   
excluding
 
     
As
   
recurring
       
recurring
   
As
   
recurring
       
recurring
   
(decrease)
   
nonrecurring
 
 In thousands, except per share amounts
 
reported
   
items
       
items
   
reported
   
items
       
items
   
as reported
   
items
 
                                                           
 OPERATING REVENUES
                                                       
 
 Voice*
  $ 889,960                 889,960       871,767                 871,767       2.1 %     2.1 %
 
 Network access
    941,506       48,298     (1 )     893,208       878,702       1,688     (6 )     877,014       7.1 %     1.8 %
 
 Data
    460,755       (68 )   (1 )     460,823       351,495       275     (6 )     351,220       31.1 %     31.2 %
 
 Fiber transport and CLEC
    159,317       13     (1 )     159,304       149,088                     149,088       6.9 %     6.9 %
 
 Other*
    204,703       1,869     (2 )     202,834       196,678                     196,678       4.1 %     3.1 %
        2,656,241       50,112             2,606,129       2,447,730       1,963             2,445,767       8.5 %     6.6 %
                                                                               
 OPERATING EXPENSES
                                                                           
 
 Cost of services and products
    937,375       11,655     (3 )     925,720       888,414       8,585     (6 )     879,829       5.5 %     5.2 %
 
 Selling, general and administrative
    389,533       694     (3 )     388,839       370,272       845     (6 )     369,427       5.2 %     5.3 %
 
 Depreciation and amortization
    536,255                     536,255       523,506                     523,506       2.4 %     2.4 %
        1,863,163       12,349             1,850,814       1,782,192       9,430             1,772,762       4.5 %     4.4 %
                                                                               
 OPERATING INCOME
    793,078       37,763             755,315       665,538       (7,467 )           673,005       19.2 %     12.2 %
                                                                               
 OTHER INCOME (EXPENSE)
                                                                           
 
 Interest expense
    (212,906 )                   (212,906 )     (195,957 )                   (195,957 )     8.6 %     8.6 %
 
 Other income (expense)
    38,770       12,643     (4 )     26,127       121,568       106,934     (7 )     14,634       (68.1 %)     78.5 %
 
 Income tax expense
    (200,572 )     13,701     (5 )     (214,273 )     (221,122 )     (32,477 )   (8 )     (188,645 )     (9.3 %)     13.6 %
                                                                               
 NET INCOME
  $ 418,370       64,107             354,263       370,027       66,990             303,037       13.1 %     16.9 %
                                                                               
 BASIC EARNINGS PER SHARE
  $ 3.82       0.59             3.24       3.17       0.57             2.59       20.5 %     25.1 %
 DILUTED EARNINGS PER SHARE
  $ 3.72       0.57             3.16       3.07       0.55             2.52       21.2 %     25.4 %
                                                                               
AVERAGE SHARES OUTSTANDING
                                                                     
 
 Basic
    109,360                     109,360       116,671                     116,671       (6.3 %)     (6.3 %)
 
 Diluted
    113,094                     113,094       122,229                     122,229       (7.5 %)     (7.5 %)
                                                                               
DIVIDENDS PER COMMON SHARE
  $ 0.26                     0.26       0.25                     0.25       4.0 %     4.0 %
                                                                               
 NONRECURRING ITEMS
                                                                           
 
(1) - Includes (i) revenue recorded upon settlement of a dispute with a carrier ($49.0 million) and (ii) revenue impact of severance and related costs due to workforce reductions ($.5 million),
 
 
         net of (iii) revenue reduction associated with gain on liquidation of Rural Telephone Bank ($1.3 million).
 
 
(2) - Reimbursement of amounts upon a change in our satellite television arrangement.
 
 
(3) - Includes (i) write-down due to impairment of CLEC assets ($16.6 million) and (ii) severance and related costs due to workforce reductions ($2.7 million), net of (iii) reimbursement of amounts
 
 
        upon a change in our satellite television arrangement ($4.1 million) and (iv) insurance reimbursements associated with previously recorded hurricane related expenses ($3.0 million).
 
 
(4) - Includes (i) gain on sale of non-core asset ($10.4 million) and (ii) gain on liquidation of Rural Telephone Bank ($5.2 million), net of (iii) $3.0 million impairment of a nonoperating investment.
 
 
(5) - Includes (i) $32.7 million benefit due to the recognition of previously unrecognized tax benefits in accordance with FIN 48, net of the aggregate tax effects of items (1) through (4)
        ($19.0 million).
 
 
(6) - Severance and related costs due to workforce reduction, including revenue effect.
 
 
(7) - Includes (i) gains of $117.8 million recorded upon redemption of Rural Telephone Bank stock and $.9 million recorded upon sale of Arizona properties, net of
 
 
        (ii) $11.7 million impairment of nonoperating investments.
 
 
(8) - Includes $38.9 million net tax expense related to Items (6) and (7), net of $6.4 million net tax benefit due to the resolution of various income tax audit issues.
 
                                                                               
*
Revenues from voice mail services previously reflected in "Other" revenues have been reclassified to "Voice" revenues for all periods.
         



CenturyTel, Inc.
 CONSOLIDATED BALANCE SHEETS
 DECEMBER 31, 2007 AND DECEMBER 31, 2006
 (UNAUDITED)
 
 
 
 
 
   
December 31,
   
December 31,
 
   
2007
   
2006
 
     (in thousands)  
ASSETS
           
 CURRENT ASSETS            
  Cash and cash equivalents   $ 34,402       25,668  
  Other current assets     257,997       264,449  
 Total current assets
    292,399       290,117  
                 
 NET PROPERTY, PLANT AND EQUIPMENT                
  Property, plant and equipment     8,677,141       7,893,760  
  Accumulated depreciation     (5,557,730 )     (4,784,483 )
 Net property, plant and equipment
    3,119,411       3,109,277  
                 
 GOODWILL AND OTHER ASSETS                
  Goodwill     4,005,966       3,431,136  
  Other     769,862       610,477  
 Total goodwill and other assets
    4,775,828       4,041,613  
                 
                 
 TOTAL ASSETS   $ 8,187,638       7,441,007  
                 
                 
LIABILITIES AND EQUITY
               
 CURRENT LIABILITIES                
  Short-term debt and current maturities of long-term debt   $ 279,898       178,012  
  Other current liabilities     456,637       439,553  
 Total current liabilities
    736,535       617,565  
                 
 LONG-TERM DEBT     2,734,357       2,412,852  
 DEFERRED CREDITS AND OTHER LIABILITIES     1,307,541       1,219,639  
 STOCKHOLDERS' EQUITY     3,409,205       3,190,951  
                 
 TOTAL LIABILITIES AND EQUITY   $ 8,187,638       7,441,007  

 
 
 
 
 CenturyTel, Inc.
 RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
 (UNAUDITED)




   
Three months ended December 31, 2007
   
Three months ended December 31, 2006
 
                   
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
  $ 168,974       (14,944 ) (1 )     183,918       173,679       -           173,679  
 Add:  Depreciation and amortization
    137,554       -           137,554       126,360       -           126,360  
 Operating cash flow
  $ 306,528       (14,944 )         321,472       300,039       -           300,039  
                                                         
 Revenues
  $ 656,562       (1,284 ) (2 )     657,846       607,695       -           607,695  
                                                         
 Operating income margin (operating income divided by revenues)
    25.7 %                 28.0 %     28.6 %                 28.6 %
                                                         
 Operating cash flow margin (operating cash flow divided by revenues)
    46.7 %                 48.9 %     49.4 %                 49.4 %
                                                         
                                                         
 Free cash flow (prior to debt service requirements and dividends)
                                                       
 Net income
  $ 115,033       25,211   (3 )     89,822       72,233       (7,216 ) (4 )     79,449  
 Add:  Depreciation and amortization
    137,554       -           137,554       126,360       -           126,360  
 Less:  Capital expenditures
    (141,744 )     -           (141,744 )     (101,037 )     -           (101,037 )
 Free cash flow
  $ 110,843       25,211           85,632       97,556       (7,216 )         104,772  
                                                         
 Free cash flow
  $ 110,843                           97,556                      
 Gain on asset dispositions
    (5,207 )                         -                      
 Deferred income taxes
    (42,093 )                         16,272                      
 Changes in current assets and current liabilities
    9,094                           7,821                      
 Decrease in other noncurrent assets
    4,665                           4,649                      
 Increase in other noncurrent liabilities
    (6,163 )                         152                      
 Retirement benefits
    5,549                           (19,369 )                    
 Excess tax benefits from share-based compensation
    7                           (4,174 )                    
 Other, net
    22,114                           14,267                      
 Add:  Capital expenditures
    141,744                           101,037                      
 Net cash provided by operating activities
  $ 240,553                           218,211                      
                                                         
                                                         
                                                         
 NONRECURRING ITEMS
                                                       
(1) - Includes write-down due to impairment of CLEC assets ($16.6 million) and revenue reduction associated with gain from liquidation of Rural Telephone Bank ($1.3 million),
 
        net of insurance reimbursements associated with previously recorded hurricane related expenses ($3.0 million).
 
(2) - Revenue effect of gain from liquidation of Rural Telephone Bank.
 
(3) - Includes (i) $32.7 million income tax benefit due to the recognition of previously unrecognized tax benefits in accordance with FIN 48, (ii) the after-tax effects of (a) the gain
 
        from liquidation of the Rural Telephone Bank, including revenue effect, and (b) insurance reimbursements associated with previously recorded hurricane related
 
        expenses, net of (iii) the after-tax effects of (a) the write-down due to impairment of CLEC assets and (b) the impairment of a nonoperating investment.
 
(4) - Impairment of nonoperating investments (presented on an after-tax basis).
 


 
CenturyTel, Inc.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
 (UNAUDITED)
 
 


   
Twelve months ended December 31, 2007
   
Twelve months ended December 31, 2006
 
                 
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
  $ 793,078       37,763     (1 )   755,315       665,538       (7,467 )   (4 )     673,005  
 Add:  Depreciation and amortization
    536,255       -           536,255       523,506       -             523,506  
 Operating cash flow
  $ 1,329,333       37,763           1,291,570       1,189,044       (7,467 )           1,196,511  
                                                           
 Revenues
  $ 2,656,241       50,112     (2 )   2,606,129       2,447,730       1,963     (4 )     2,445,767  
                                                           
 Operating income margin (operating income divided by revenues)
    29.9 %                 29.0 %     27.2 %                   27.5 %
                                                           
 Operating cash flow margin (operating cash flow divided by revenues)
    50.0 %                 49.6 %     48.6 %                   48.9 %
                                                           
                                                           
 Free cash flow (prior to debt service requirements and dividends)
                                                         
 Net income
  $ 418,370       64,107     (3 )   354,263       370,027       66,990     (5 )     303,037  
 Add:  Depreciation and amortization
    536,255       -           536,255       523,506       -             523,506  
 Less:  Capital expenditures
    (326,045 )     -           (326,045 )     (314,071 )     -             (314,071 )
    $ 628,580       64,107           564,473       579,462       66,990             512,472  
                                                           
 Free cash flow
  $ 628,580                           579,462                        
 Gain on asset dispositions
    (15,643 )                         (118,649 )                      
 Deferred income taxes
    1,018                           49,685                        
 Changes in current assets and current liabilities
    37,608                           (6,651 )                      
 Decrease in other noncurrent assets
    12,718                           9,078                        
 Increase in other noncurrent liabilities
    (20,372 )                         709                        
 Retirement benefits
    26,941                           5,963                        
 Excess tax benefits from share-based compensation
    (6,427 )                         (12,034 )                      
 Other, net
    39,518                           19,085                        
 Add:  Capital expenditures
    326,045                           314,071                        
 Net cash provided by operating activities
  $ 1,029,986                           840,719                        
                                                           
 NONRECURRING ITEMS
                                                         
(1) - Includes (i) $49.0 million revenue recorded upon settlement of a dispute with a carrier; (ii) $5.9 million reimbursement of amounts upon a change in our satellite television arrangement
 
        and (iii) $3.0 million insurance reimbursements associated with previously recorded hurricane related expenses. These favorable items were partially offset by (i) write-down due to