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) October 30, 2001
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
FOR IMMEDIATE RELEASE FOR MORE INFORMATION CONTACT:
October 30, 2001 Media: Patricia Cameron (318) 388-9674
patricia.cameron@centurytel.com
Investors: Tony Davis (318) 388-9525
tony.davis@centurytel.com
CenturyTel Reports 11.8 Percent Increase in Third Quarter Revenues
MONROE, La....CenturyTel, Inc. (NYSE Symbol: CTL) announces operating results
for third quarter 2001.
o Revenues climbed 11.8% to $539.4 million.
o Excluding nonrecurring gains and losses, earnings before interest, taxes,
depreciation and amortization (EBITDA) increased 7.4% to $278.3 million.
o Net income, excluding nonrecurring gains and losses, was $63.9 million.
o Excluding nonrecurring gains and losses, cash earnings per share was $.55.
o Diluted earnings per share, excluding nonrecurring gains and losses, was $.45.
Third Quarter Highlights
(Excluding nonrecurring
gains and losses)
(Dollars in thousands, Qtr Ended Qtr Ended % Change
except per share amounts) 9/30/2001 9/30/2000
------------------------------------------------------------------------------
Revenues $ 539,377 $ 482,634 11.8%
EBITDA $ 278,328 $ 259,158 7.4%
Net Income $ 63,873 $ 65,966 (3.2%)
Cash Earnings Per Share $ .55 $ .56 (1.8%)
Diluted Earnings Per Share $ .45 $ .47 (4.3%)
Average Diluted Shares Outstanding $ 142,260 $ 141,848 .3%
Telephone Revenues $ 377,747 $ 324,608 16.4%
Wireless Revenues $ 115,404 $ 120,232 (4.0%)
Other Operations Revenues $ 46,226 $ 37,794 22.3%
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Telephone Access Lines 1,808,574 1,800,728 .4%
Wireless Units in Majority-Owned Markets 794,664 741,183 7.2%
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"CenturyTel achieved strong third quarter results in spite of a sluggish
economy," said Glen F. Post, President and CEO of CenturyTel. "We made
substantial progress in the quarter resolving several regulatory issues
affecting our wireline operations and achieved good growth in our long
distance, Internet and DSL service offerings."
CenturyTel experienced non-recurring pre-tax items of $43.7 million primarily
related to a gain on the sale of our remaining interest in Illuminet common
stock net of the write-down of certain non-operating assets. Financial data
presented in the body of the press release excludes these one-time items.
Consolidated revenues rose 11.8% to $539.4 million from $482.6 million. EBITDA
grew to $278.3 million from $259.2 million, a 7.4% increase. CenturyTel achieved
a consolidated EBITDA margin of 51.6% during the quarter. Net income was $63.9
million in third quarter 2001 compared to $66.0 million in third quarter 2000.
The decline in net income is due to lower wireless roaming revenue and higher
expenses related to CLEC and DSL growth initiatives. Cash earnings per share was
$.55 in third quarter 2001 compared to $.56 in third quarter 2000. Diluted
earnings per share was $.45 in the third quarter 2001 compared to $.47 in third
quarter 2000.
Telephone revenues grew 16.4% to $377.7 million during the quarter compared with
$324.6 million in third quarter 2000. The 493,000 access lines acquired from
Verizon during 2000 contributed $46.4 million of the increase in telephone
revenues during third quarter 2001. Telephone operating income increased 4.6%,
reaching $104.4 million from $99.8 million in third quarter 2000, and EBITDA
rose 12.4% to $204.7 million from $182.1 million a year ago. CenturyTel's third
quarter telephone EBITDA margin was 54.2% while the operating income margin was
27.6%.
"CenturyTel continued to enhance the financial performance of the former Verizon
lines in Arkansas and Wisconsin during the quarter. We obtained regulatory
relief that should boost operating income in these properties by nearly $30
million annually," Post said.
Wireless revenues declined 4.0% to $115.4 million in third quarter 2001 compared
with $120.2 million in third quarter 2000. Roaming revenues declined 20.8% to
$24.0 million compared to $30.4 million a year ago. Wireless operating income
was $32.9 million compared to $39.3 million, a 16.2% decrease, and EBITDA
decreased 10.4% to $49.7 million compared to $55.4 million a year ago.
CenturyTel's third quarter wireless EBITDA margin was 44.0% based on service
revenues, and the operating income margin was 29.2% based on service revenues.
Net wireless subscriber additions were 14,700 for the quarter. Average monthly
cellular service revenue per user was $47 during third quarter 2001.
"We achieved solid wireless results despite the anticipated $6.4 million decline
in roaming revenues. Customer growth was good and our wireless margins remain
among the highest in the industry," Post said.
Other operations revenues grew 22.3% to $46.2 million during third quarter 2001
compared with $37.8 million in third quarter 2000. CenturyTel's long distance
revenues increased 14.7% to $31.1 million from $27.1 million. CenturyTel now
serves more than 438,600 long distance customers, adding more than 24,000 during
the quarter. Internet revenues rose 72.1% to $10.6 million from $6.1 million.
The company experienced a $1.1 million operating loss this quarter in its
Internet operations due to startup expenses pertaining to the rapid growth of
DSL. CenturyTel now serves more than 20,800 DSL customers, adding more than
5,000 during the quarter. CLEC operating losses were $2.9 million during the
quarter.
"CenturyTel achieved nearly 2% penetration of our DSL-enabled lines while
reducing Internet operating losses from the second quarter. We were successful
in adding more than 5,000 DSL customers during the third quarter," Post said.
During the first nine months of 2001, net income decreased 3.7% to $165.3
million from $171.7 million in 2000. Diluted earnings per share declined 4.1% to
$1.16 from $1.21, and consolidated revenues increased 19.4% to $1.574 billion
from $1.319 billion. Earnings before interest, taxes, depreciation and
amortization (EBITDA) was $796.8 million compared with $681.4 million a year
ago, a 16.9% increase.
"CenturyTel has generated $111.4 million in free cash flow year to date. Debt as
a percentage of total capitalization has fallen steadily from 63.1% at year end
2000 to 57.7% at the end of the third quarter," Post said.
For the fourth quarter 2001, CenturyTel expects total revenues to range from
$525 million to $545 million. Operating cash flow for the fourth quarter is
expected to be in the range of $245 million to $260 million. Cash earnings per
share is anticipated to be $.47 to $.51 while earnings per share is expected to
be in the range of $.37 to $.41.
All amounts disclosed above exclude one-time items.
In addition to historical information, this release includes 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 CenturyTel. 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 Company's ability to effectively manage its growth, including
integrating newly acquired businesses into our operations, hiring adequate
numbers of qualified staff and successfully upgrading our billing and other
information systems; the inherent risk of rapid technological change; the
effects of on-going changes in the regulation of the Company or the
communications industry generally; the effects of greater than anticipated
competition in the Company's markets; possible changes in the demand for, or
pricing of, the Company's products and services; the Company's ability to
successfully introduce new offerings on a timely and cost-effective basis;
higher than anticipated interest rates; 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, 2000. The information
contained in this release is as of October 30, 2001. The Company undertakes no
obligation to update or revise any of this information whether a result of new
information, future events or developments, or otherwise.
CenturyTel's management will be hosting a conference call today at 10:30 A.M.
CST to discuss third quarter earnings and the outlook for fourth quarter 2001.
Investors can access CenturyTel's earnings conference call and replay by
accessing the company's Web site at (www.centurytel.com)
CenturyTel, Inc. provides communications services including local exchange,
wireless, long distance, Internet access and data services to more than three
million customers in 21 states. The company, headquartered in Monroe, Louisiana,
is publicly traded on the New York Stock Exchange under the symbol CTL.
CenturyTel is the 8th largest local exchange telephone company, based on access
lines, and the 8th largest cellular company, based on population equivalents
owned, in the United States.
Visit CenturyTel's corporate Web site at (www.centurytel.com)
CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
(UNAUDITED)
In thousands, except INCREASE
per share amounts 2001 2000 (DECREASE)
------------------------------------------------------------------------------
TELEPHONE OPERATIONS
Operating revenues
Local service $ 122,829 106,304 15.5%
Network access 219,432 187,254 17.2%
Other 35,486 31,050 14.3%
------------------------------------------------------------------
377,747 324,608 16.4%
------------------------------------------------------------------
Operating expenses
Plant operations 98,605 76,086 29.6%
Customer operations 28,148 28,623 (1.7%)
Corporate and other 46,293 37,766 22.6%
Depreciation and amortization 100,336 82,380 21.8%
------------------------------------------------------------------
273,382 224,855 21.6%
------------------------------------------------------------------
Telephone operating income 104,365 99,753 4.6%
------------------------------------------------------------------
WIRELESS OPERATIONS
Operating revenues
Service 88,695 86,501 2.5%
Roaming 24,036 30,361 (20.8%)
Equipment sales 2,673 3,370 (20.7%)
------------------------------------------------------------------
115,404 120,232 (4.0%)
------------------------------------------------------------------
Operating expenses
Cost of equipment sold 6,108 7,192 (15.1%)
System operations 19,924 19,749 0.9%
General, administrative
and customer service 22,250 18,796 18.4%
Sales and marketing 17,466 19,081 (8.5%)
Depreciation and amortization 16,754 16,134 3.8%
------------------------------------------------------------------
82,502 80,952 1.9%
------------------------------------------------------------------
Wireless operating income 32,902 39,280 (16.2%)
------------------------------------------------------------------
OTHER OPERATIONS
Operating revenues
Long distance 31,050 27,075 14.7%
Internet 10,561 6,138 72.1%
Other 4,615 4,581 0.7%
------------------------------------------------------------------
46,226 37,794 22.3%
------------------------------------------------------------------
Operating expenses
Cost of sales and other 36,563 28,542 28.1%
Depreciation and amortization 3,119 1,226 154.4%
------------------------------------------------------------------
39,682 29,768 33.3%
------------------------------------------------------------------
Other operating income 6,544 8,026 (18.5%)
------------------------------------------------------------------
TOTAL OPERATING INCOME 143,811 147,059 (2.2%)
OTHER INCOME (EXPENSE)
Interest expense (54,438) (48,904) 11.3%
Income from unconsolidated
cellular entities 16,622 11,366 46.2%
Minority interest (2,819) (2,889) (2.4%)
Nonrecurring gains and losses 43,543 10,683 307.6%
Other income and expense 705 (4,065) (117.3%)
Income tax expense (55,119) (46,026) 19.8%
------------------------------------------------------------------
NET INCOME $ 92,305 67,224 37.3%
==================================================================
EARNINGS PER SHARE
Basic $ 0.66 0.48 37.5%
Diluted $ 0.65 0.47 38.3%
SHARES OUTSTANDING
Basic 140,772 140,220 0.4%
Diluted 142,260 141,848 0.3%
DIVIDENDS PER COMMON SHARE $ 0.0500 0.0475 5.3%
CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
(UNAUDITED)
Excludes nonrecurring items
In thousands, except INCREASE
per share amounts 2001 2000 (DECREASE)
------------------------------------------------------------------------------
TELEPHONE OPERATIONS
Operating revenues
Local service $ 122,829 106,304 15.5%
Network access 219,432 187,254 17.2%
Other 35,486 31,050 14.3%
------------------------------------------------------------------
377,747 324,608 16.4%
------------------------------------------------------------------
Operating expenses
Plant operations 98,605 76,086 29.6%
Customer operations 28,148 28,623 (1.7%)
Corporate and other 46,293 37,766 22.6%
Depreciation and amortization 100,336 82,380 21.8%
------------------------------------------------------------------
273,382 224,855 21.6%
------------------------------------------------------------------
Telephone operating income 104,365 99,753 4.6%
------------------------------------------------------------------
WIRELESS OPERATIONS
Operating revenues
Service 88,695 86,501 2.5%
Roaming 24,036 30,361 (20.8%)
Equipment sales 2,673 3,370 (20.7%)
------------------------------------------------------------------
115,404 120,232 (4.0%)
------------------------------------------------------------------
Operating expenses
Cost of equipment sold 6,108 7,192 (15.1%)
System operations 19,924 19,749 0.9%
General, administrative and
customer service 22,250 18,796 18.4%
Sales and marketing 17,466 19,081 (8.5%)
Depreciation and amortization 16,754 16,134 3.8%
------------------------------------------------------------------
82,502 80,952 1.9%
------------------------------------------------------------------
Wireless operating income 32,902 39,280 (16.2%)
------------------------------------------------------------------
OTHER OPERATIONS
Operating revenues
Long distance 31,050 27,075 14.7%
Internet 10,561 6,138 72.1%
Other 4,615 4,581 0.7%
------------------------------------------------------------------
46,226 37,794 22.3%
------------------------------------------------------------------
Operating expenses
Cost of sales and other 36,563 28,542 28.1%
Depreciation and amortization 3,119 1,226 154.4%
------------------------------------------------------------------
39,682 29,768 33.3%
------------------------------------------------------------------
Other operating income 6,544 8,026 (18.5%)
------------------------------------------------------------------
TOTAL OPERATING INCOME 143,811 147,059 (2.2%)
OTHER INCOME (EXPENSE)
Interest expense (54,438) (48,904) 11.3%
Income from unconsolidated
cellular entities 13,422 11,366 18.1%
Minority interest (2,819) (2,889) (2.4%)
Other income and expense 3,705 3,882 (4.6%)
Income tax expense (39,808) (44,548) (10.6%)
------------------------------------------------------------------
NET INCOME $ 63,873 65,966 (3.2%)
==================================================================
EARNINGS PER SHARE
Basic $ 0.45 0.47 (4.3%)
Diluted $ 0.45 0.47 (4.3%)
SHARES OUTSTANDING
Basic 140,772 140,220 0.4%
Diluted 142,260 141,848 0.3%
DIVIDENDS PER COMMON SHARE $ 0.0500 0.0475 5.3%
CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
(UNAUDITED)
In thousands, except INCREASE
per share amounts 2001 2000 (DECREASE)
------------------------------------------------------------------------------
TELEPHONE OPERATIONS
Operating revenues
Local service $ 367,283 284,896 28.9%
Network access 645,869 510,440 26.5%
Other 103,728 82,286 26.1%
------------------------------------------------------------------
1,116,880 877,622 27.3%
------------------------------------------------------------------
Operating expenses
Plant operations 285,980 198,625 44.0%
Customer operations 86,219 76,893 12.1%
Corporate and other 140,329 117,634 19.3%
Depreciation and amortization 296,624 217,371 36.5%
------------------------------------------------------------------
809,152 610,523 32.5%
------------------------------------------------------------------
Telephone operating income 307,728 267,099 15.2%
------------------------------------------------------------------
WIRELESS OPERATIONS
Operating revenues
Service revenues 253,886 246,890 2.8%
Roaming 67,047 73,946 (9.3%)
Equipment sales 8,563 10,942 (21.7%)
------------------------------------------------------------------
329,496 331,778 (0.7%)
------------------------------------------------------------------
Operating expenses
Cost of equipment sold 17,789 21,728 (18.1%)
System operations 54,565 51,782 5.4%
General, administrative and
customer service 64,042 56,423 13.5%
Sales and marketing 55,287 60,637 (8.8%)
Depreciation and amortization 48,974 49,225 (0.5%)
------------------------------------------------------------------
240,657 239,795 0.4%
------------------------------------------------------------------
Wireless operating income 88,839 91,983 (3.4%)
------------------------------------------------------------------
OTHER OPERATIONS
Operating revenues
Long distance 87,164 77,001 13.2%
Internet 27,678 16,423 68.5%
Other 13,103 15,922 (17.7%)
------------------------------------------------------------------
127,945 109,346 17.0%
------------------------------------------------------------------
Operating expenses
Cost of sales and other 105,049 81,331 29.2%
Depreciation and amortization 6,239 3,724 67.5%
------------------------------------------------------------------
111,288 85,055 30.8%
------------------------------------------------------------------
Other operating income 16,657 24,291 (31.4%)
------------------------------------------------------------------
TOTAL OPERATING INCOME 413,224 383,373 7.8%
OTHER INCOME (EXPENSE)
Interest expense (173,499) (120,213) 44.3%
Income from unconsolidated
cellular entities 32,648 19,382 68.4%
Minority interest (8,731) (8,052) 8.4%
Nonrecurring gains and losses 199,971 20,593 871.1%
Other income and expense 8,206 2,548 222.1%
Income tax expense (178,551) (123,278) 44.8%
------------------------------------------------------------------
NET INCOME $ 293,268 174,353 68.2%
==================================================================
EARNINGS PER SHARE
Basic $ 2.08 1.24 67.7%
Diluted $ 2.06 1.23 67.5%
SHARES OUTSTANDING
Basic 140,693 139,989 0.5%
Diluted 142,267 141,769 0.4%
DIVIDENDS PER COMMON SHARE $ 0.1500 0.1425 5.3%
CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
(UNAUDITED)
Excludes nonrecurring items
In thousands, except INCREASE
per share amounts 2001 2000 (DECREASE)
------------------------------------------------------------------------------
TELEPHONE OPERATIONS
Operating revenues
Local service $ 367,283 284,896 28.9%
Network access 645,869 510,440 26.5%
Other 103,728 82,286 26.1%
------------------------------------------------------------------
1,116,880 877,622 27.3%
------------------------------------------------------------------
Operating expenses
Plant operations 283,980 198,625 43.0%
Customer operations 86,219 76,893 12.1%
Corporate and other 140,329 117,634 19.3%
Depreciation and amortization 296,624 217,371 36.5%
------------------------------------------------------------------
807,152 610,523 32.2%
------------------------------------------------------------------
Telephone operating income 309,728 267,099 16.0%
------------------------------------------------------------------
WIRELESS OPERATIONS
Operating revenues
Service 253,886 246,890 2.8%
Roaming 67,047 73,946 (9.3%)
Equipment sales 8,563 10,942 (21.7%)
------------------------------------------------------------------
329,496 331,778 (0.7%)
------------------------------------------------------------------
Operating expenses
Cost of equipment sold 17,789 21,728 (18.1%)
System operations 54,565 51,782 5.4%
General, administrative and
customer service 64,042 56,423 13.5%
Sales and marketing 55,287 60,637 (8.8%)
Depreciation and amortization 48,974 49,225 (0.5%)
------------------------------------------------------------------
240,657 239,795 0.4%
------------------------------------------------------------------
Wireless operating income 88,839 91,983 (3.4%)
------------------------------------------------------------------
OTHER OPERATIONS
Operating revenues
Long distance 87,164 77,001 13.2%
Internet 27,678 16,423 68.5%
Other 13,103 15,922 (17.7%)
------------------------------------------------------------------
127,945 109,346 17.0%
------------------------------------------------------------------
Operating expenses
Cost of sales and other 105,049 80,827 30.0%
Depreciation and amortization 6,239 3,724 67.5%
------------------------------------------------------------------
111,288 84,551 31.6%
------------------------------------------------------------------
Other operating income 16,657 24,795 (32.8%)
------------------------------------------------------------------
TOTAL OPERATING INCOME 415,224 383,877 8.2%
OTHER INCOME (EXPENSE)
Interest expense (173,499) (120,213) 44.3%
Income from unconsolidated
cellular entities 27,284 24,712 10.4%
Minority interest (8,718) (8,052) 8.3%
Other income and expense 11,206 10,495 6.8%
Income tax expense (106,164) ( 119,112) (10.9%)
------------------------------------------------------------------
NET INCOME $ 165,333 171,707 (3.7%)
==================================================================
EARNINGS PER SHARE
Basic $ 1.17 1.23 (4.9%)
Diluted $ 1.16 1.21 (4.1%)
SHARES OUTSTANDING
Basic 140,693 139,989 0.5%
Diluted 142,267 141,769 0.4%
DIVIDENDS PER COMMON SHARE $ 0.1500 0.1425 5.3%
CenturyTel, Inc.
CONSOLIDATED BALANCE SHEETS
September 30, 2001 and December 31, 2000
(UNAUDITED)
September 30, December 31,
2001 2000
-------------------------------------------------------------------------------
(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 21,372 19,039
Other current assets 342,433 357,465
-------------------------------------------------------------------------------
Total current assets 363,805 376,504
-------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT
Telephone 5,220,236 4,999,808
Wireless 552,586 522,684
Other 443,038 392,024
Accumulated depreciation (3,230,162) (2,955,223)
-------------------------------------------------------------------------------
Net property, plant and equipment 2,985,698 2,959,293
-------------------------------------------------------------------------------
INVESTMENTS AND OTHER ASSETS
Excess cost of net
assets acquired 2,489,276 2,509,033
Other 550,543 548,460
-------------------------------------------------------------------------------
Total investments and other assets 3,039,819 3,057,493
-------------------------------------------------------------------------------
TOTAL ASSETS $ 6,389,322 6,393,290
===============================================================================
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term debt and current
maturities of long-term debt $ 314,385 425,962
Other current liabilities 448,004 317,408
-------------------------------------------------------------------------------
Total current liabilities 762,389 743,370
LONG-TERM DEBT 2,802,301 3,050,292
DEFERRED CREDITS AND OTHER LIABILITIES 536,201 567,549
STOCKHOLDERS' EQUITY 2,288,431 2,032,079
-------------------------------------------------------------------------------
TOTAL LIABILITIES AND EQUITY $ 6,389,322 6,393,290
===============================================================================
CAPITAL EXPENDITURES
NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
INC
2001 2000 (DEC)
------------------------------------------------------------------------------
(in thousands)
Telephone $ 248,831 157,841 57.6%
Wireless 52,522 38,964 34.8%
Other 82,902 85,876 (3.5%)
------------------------------------------------------------------
Total capital expenditures $ 384,255 282,681 35.9%
==================================================================
CAPITAL EXPENDITURES
THREE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
INC
2001 2000 (DEC)
------------------------------------------------------------------------------
(in thousands)
Telephone $ 87,014 82,427 5.6%
Wireless 18,926 24,279 (22.0%)
Other 34,997 36,568 (4.3%)
------------------------------------------------------------------
Total capital expenditures $ 140,937 143,274 (1.6%)
==================================================================
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