-----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, GGWVU3VEeTiRrgFfYz31zWAIV/27C/9eAChi8k1eq2Fr6tlO/nV44O9QLhohVsu4 a8sdjYuwGXFvsH+m/HEWdA== 0000018926-05-000066.txt : 20050728 0000018926-05-000066.hdr.sgml : 20050728 20050728093812 ACCESSION NUMBER: 0000018926-05-000066 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050630 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050728 DATE AS OF CHANGE: 20050728 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: 05979260 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 earnrls.txt 2ND QTR EARNINGS RELEASE 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 28, 2005 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 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 July 28, 2005, we issued a press release announcing our second quarter 2005 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, 2005, 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. (c) Exhibit. 99 Press release dated July 28, 2005 reporting second quarter 2005 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. By: /s/ Neil A. Sweasy _________________________ Neil A. Sweasy Vice President and Controller Dated: July 28, 2005 EX-99 2 exhibit99.txt PRESS RELEASE ON EARNINGS EXHIBIT 99 FOR IMMEDIATE RELEASE FOR MORE INFORMATION CONTACT: July 28, 2005 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 2005. o Operating revenues increased to $606.4 million from $603.6 million in second quarter 2004. o Net income rose 2.2% to $85.1 million compared to $83.3 million in second quarter 2004. o Diluted earnings per share increased 8.5% to $.64 from $.59 in second quarter 2004. o Free cash flow (as defined in the attached financial schedules) was $113.6 million in second quarter 2005. o Through the second quarter, the Company had invested $114 million to repurchase 3.5 million shares of common stock under its $200 million share repurchase program.
SECOND QUARTER HIGHLIGHTS (In thousands, except per share Quarter Ended Quarter Ended % Change amounts and customer units) 6/30/05 6/30/04 - ---------------------------------------------------------------------------------------- Operating Revenues $ 606,413 $ 603,555 0.5% Operating Cash Flow (1) $ 316,334 $ 320,662 (1.3)% Net Income $ 85,118 $ 83,284 2.2% Diluted Earnings Per Share $ .64 $ .59 8.5% Average Diluted Shares Outstanding 135,345 142,968 (5.3)% Capital Expenditures $ 102,011 $ 94,269 8.2% - ---------------------------------------------------------------------------------------- Telephone Access Lines 2,273,279 2,350,505 (3.3)% Long Distance Lines 1,122,343 1,003,328 11.9% DSL Connections 194,847 108,820 79.1% - ----------------------------------------------------------------------------------------
(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. "CenturyTel continued to diversify its revenue mix in the second quarter with solid year over year revenue growth in data and fiber transport services of 11.6% and 18.1%, respectively," Glen F. Post, III, chairman and chief executive officer, said. "Further executing on this strategy, we acquired metropolitan fiber networks in 16 markets expanding the opportunity for our enterprise business and positioning us as a leading fiber transport provider near our existing markets." OPERATING REVENUES rose 0.5% to $606.4 million in second quarter 2005 from $603.6 million in second quarter 2004. This increase primarily resulted from revenue generated by data revenue growth from DSL subscribers, growth in our fiber transport business and increased enhanced calling feature penetration. These increases more than offset revenue declines attributable to access line losses and lower access and long distance revenues. OPERATING EXPENSES increased 1.7% to $420.5 million from $413.6 million in second quarter 2004 primarily due to growth in our DSL subscriber base and increases in access expense and employee related expenses that were partially offset by lower operating taxes. OPERATING CASH FLOW decreased to $316.3 million from $320.7 million. CenturyTel achieved an operating cash flow margin of 52.2% during the quarter versus 53.1% in second quarter 2004. "We generated over $113 million of free cash flow and returned more than $60 million to shareholders through share repurchases and cash dividends during the second quarter," Post said. NET INCOME increased 2.2% to $85.1 million from $83.3 million in second quarter 2004. The increase was primarily driven by lower interest expense 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 $.64 for second quarter 2005, an 8.5% increase from the $.59 reported in second quarter 2004, driven by higher net income and the decline in fully diluted shares outstanding as a result of share repurchases since second quarter 2004. As of July 27, 2005, the investment banks that sold approximately 12.9 million shares to the Company in late May 2005 under accelerated share repurchase agreements had repurchased approximately 32% of these 12.9 million shares at a weighted average price per share of approximately $33.94. The results for second quarter 2005 and second quarter 2004 discussed above reflect results reported in accordance with generally accepted accounting principles (GAAP). For the first six months of 2005, operating revenues increased to $1.202 billion from $1.197 billion for the same period in 2004. Operating cash flow was $625.4 million for the first half of 2005 compared to $631.2 million a year ago. Net income, excluding nonrecurring items, was $165.1 million in the first six months of 2005 compared to $166.6 million during the same period in 2004. Diluted earnings per share, excluding nonrecurring items, increased 6.0% to $1.23 during the first half of 2005 compared to $1.16 in the first half of 2004. For the first six months of 2005, under generally accepted accounting principles (GAAP), net income was $164.7 compared to $166.6 million for the first six months of 2004. The $164.7 million of net income for the first half of 2005 includes $3.7 million after-tax expense related to CenturyTel's purchase and retirement of approximately $400 million of Series J Notes and $3.3 million net benefit related to the settlement of various income tax audits. For the third quarter 2005, CenturyTel expects total revenues of $635 to $650 million and diluted earnings per share of $.65 to $.70. For the full year 2005, diluted earnings per share is expected to be in the range of $2.40 to $2.50, an increase over the $2.25 to $2.35 range previously provided. This increase in 2005 diluted earnings per share guidance is primarily due to the better than anticipated results during second quarter 2005, continuation of our successful cost containment efforts and fewer fully diluted shares outstanding as a result of share repurchases during the second quarter. Third quarter and full year 2005 guidance also include the anticipated results of operations attributable to the metro fiber assets acquired from KMC at the end of 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 888.423.4863. The call will be accessible for replay through August 3, 2005, by calling 888.266.2081 and entering the access code: 736032. 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 18, 2005. 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 and hiring adequate numbers of qualified staff; 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; the Company's ability to successfully negotiate collective bargaining agreements on reasonable terms; 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, 2004. 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 28, 2005. The Company undertakes no obligation to update any of its forward-looking statements. Included in the S&P 500 Index, CenturyTel (NYSE: CTL) is a leading provider of a full array of communications services primarily to rural areas and small to mid-size cities in 26 states. Visit CenturyTel at www.centurytel.com. * * * * * * * * * * CenturyTel, Inc. CONSOLIDATED STATEMENTS OF INCOME THREE MONTHS ENDED JUNE 30, 2005 AND 2004 (UNAUDITED)
In thousands, except Three months ended Three months ended Increase per share amounts June 30, 2005 June 30, 2004 (decrease) ------------------ ------------------ ---------- OPERATING REVENUES Local service $ 177,265 180,142 (1.6%) Network access 239,404 245,515 (2.5%) Long distance 44,443 45,727 (2.8%) Data 76,049 68,169 11.6% Fiber transport and CLEC 21,636 18,321 18.1% Other 47,616 45,681 4.2% ------------ ------------ 606,413 603,555 0.5% ------------ ------------ OPERATING EXPENSES Cost of services and products 194,873 190,226 2.4% Selling, general and administrative 95,206 92,667 2.7% Depreciation and amortization 130,452 130,751 (0.2%) ------------ ------------ 420,531 413,644 1.7% ------------ ------------ OPERATING INCOME 185,882 189,911 (2.1%) OTHER INCOME (EXPENSE) Interest expense (49,647) (53,089) (6.5%) Income from unconsolidated cellular entity 724 2,126 (65.9%) Other income (expense) 1,220 (3,811) (132.0%) Income tax expense (53,061) (51,853) 2.3% ------------ ------------ NET INCOME $ 85,118 83,284 2.2% ============ ============ BASIC EARNINGS PER SHARE $ 0.65 0.60 8.3% DILUTED EARNINGS PER SHARE $ 0.64 0.59 8.5% SHARES OUTSTANDING Basic 130,299 138,066 (5.6%) Diluted 135,345 142,968 (5.3%) DIVIDENDS PER COMMON SHARE $ 0.06 0.0575 4.3%
CenturyTel, Inc. CONSOLIDATED STATEMENTS OF INCOME SIX MONTHS ENDED JUNE 30, 2005 AND 2004 (UNAUDITED)
Six months ended June 30, 2005 Six months ended June 30, 2004 ------------------------------------- ------------------------------------- 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 $ 354,250 354,250 358,200 358,200 (1.1%) (1.1%) Network access 469,682 469,682 486,472 486,472 (3.5%) (3.5%) Long distance 91,958 91,958 90,316 90,316 1.8% 1.8% Data 148,955 148,955 133,797 133,797 11.3% 11.3% Fiber transport and CLEC 41,879 41,879 35,753 35,753 17.1% 17.1% Other 94,971 94,971 92,721 92,721 2.4% 2.4% ------------ --------- ------------ ---------- ----------- ------------- 1,201,695 - 1,201,695 1,197,259 - 1,197,259 0.4% 0.4% ------------ --------- ------------ ---------- ----------- ------------- OPERATING EXPENSES Cost of services and products 386,866 386,866 371,775 371,775 4.1% 4.1% Selling, general and administrative 189,460 189,460 194,273 194,273 (2.5%) (2.5%) Depreciation and amortization 262,627 262,627 257,743 257,743 1.9% 1.9% ------------ --------- ------------ ---------- ----------- ------------- 838,953 - 838,953 823,791 - 823,791 1.8% 1.8% ------------ --------- ------------ ---------- ----------- ------------- OPERATING INCOME 362,742 - 362,742 373,468 - 373,468 (2.9%) (2.9%) OTHER INCOME (EXPENSE) Interest expense (102,272) (1,196)(1) (101,076) (105,632) (105,632) (3.2%) (4.3%) Income from unconsolidated cellular entity 2,037 2,037 4,185 4,185 (51.3%) (51.3%) Other income (expense) 2,755 (1,574)(2) 4,329 (1,507) (1,507) (282.8%) (387.3%) Income tax expense (100,528) 2,395 (3) (102,923) (103,951) (103,951) (3.3%) (1.0%) ------------ --------- ------------ ---------- ----------- ------------- NET INCOME $ 164,734 (375) 165,109 166,563 - 166,563 (1.1%) (0.9%) ============ ========= ============ ========== =========== ============= BASIC EARNINGS PER SHARE $ 1.25 1.26 1.19 1.19 5.0% 5.9% DILUTED EARNINGS PER SHARE $ 1.23 1.23 1.16 1.16 6.0% 6.0% SHARES OUTSTANDING Basic 131,241 131,241 140,325 140,325 (6.5%) (6.5%) Diluted 136,257 136,257 145,197 145,197 (6.2%) (6.2%) DIVIDENDS PER COMMON SHARE $ 0.12 0.12 0.115 0.115 4.3% 4.3%
NONRECURRING ITEMS (1) - Write-off of unamortized deferred debt costs associated with purchasing and retiring approximately $400 million of Series J notes. (2) - Includes (i) $4.8 million debt extinguishment charge related to purchasing and retiring approximately $400 million of Series J notes, net of (ii) $3.2 million of interest income related to the settlement of various income tax audits. (3) - Includes (i) $1.1 million net tax benefit of Items (1) and (2) and (ii) $1.3 million tax benefit related to the settlement of various income tax audits. CenturyTel, Inc. CONSOLIDATED BALANCE SHEETS JUNE 30, 2005 AND DECEMBER 31, 2004 (UNAUDITED)
June 30, Dec. 31, 2005 2004 ----------- ---------- (in thousands) ASSETS CURRENT ASSETS Cash and cash equivalents $ 100,462 167,215 Other current assets 250,895 252,632 ----------- ---------- Total current assets 351,357 419,847 ----------- ---------- NET PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment 7,633,844 7,431,017 Accumulated depreciation (4,313,990) (4,089,616) ----------- ---------- Net property, plant and equipment 3,319,854 3,341,401 ----------- ---------- GOODWILL AND OTHER ASSETS Goodwill 3,444,198 3,433,864 Other 594,629 601,841 ----------- ---------- Total goodwill and other assets 4,038,827 4,035,705 ----------- ---------- TOTAL ASSETS $ 7,710,038 7,796,953 =========== ========== LIABILITIES AND EQUITY CURRENT LIABILITIES Current maturities of long-term debt $ 144,135 249,617 Other current liabilities 457,163 442,001 ----------- ---------- Total current liabilities 601,298 691,618 LONG-TERM DEBT 2,709,399 2,762,019 DEFERRED CREDITS AND OTHER LIABILITIES 956,234 933,551 STOCKHOLDERS' EQUITY 3,443,107 3,409,765 ----------- ---------- TOTAL LIABILITIES AND EQUITY $ 7,710,038 7,796,953 =========== ==========
CenturyTel, Inc. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)
Three months ended Three months ended In thousands June 30, 2005 June 30, 2004 ------------------ ------------------ Operating cash flow and cash flow margin Operating income $ 185,882 189,911 Add: Depreciation and amortization 130,452 130,751 ------------- ------------- Operating cash flow $ 316,334 320,662 ============= ============= Revenues $ 606,413 603,555 ============= ============= Operating income margin (operating income divided by revenues) 30.7% 31.5% ============= ============= Operating cash flow margin (operating cash flow divided by revenues) 52.2% 53.1% ============= ============= Free cash flow (prior to debt service requirements and dividends) Net income $ 85,118 83,284 Add: Depreciation and amortization 130,452 130,751 Less: Capital expenditures (102,011) (94,269) ------------- ------------- Free cash flow $ 113,559 119,766 ============= ============= Free cash flow $ 113,559 119,766 Income from unconsolidated cellular entity (724) (2,126) Deferred income taxes 3,806 30,365 Changes in current assets and current liabilities (8,669) (25,425) Increase in other noncurrent assets (119) (6,877) Increase in other noncurrent liabilities 145 405 Retirement benefits 6,513 7,033 Other, net 5,572 2,508 Add: Capital expenditures 102,011 94,269 ------------- ------------- Net cash provided by operating activities $ 222,094 219,918 ============= =============
CenturyTel, Inc. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)
Six months ended June 30, 2005 Six months ended June 30, 2004 ----------------------------------------- ----------------------------------------- As adjusted As adjusted Less excluding Less excluding non- non- non- non- As recurring recurring As recurring recurring In thousands reported items items reported items items ------------------------- ------------- -------------------------- ------------- Operating cash flow and cash flow margin Operating income $ 362,742 362,742 373,468 373,468 Add: Depreciation and amortization 262,627 262,627 257,743 257,743 ------------- ----------- ------------- -------------- ----------- ------------- Operating cash flow $ 625,369 625,369 631,211 631,211 ============= =========== ============= ============== =========== ============= Revenues $ 1,201,695 1,201,695 1,197,259 1,197,259 ============= =========== ============= ============== =========== ============= Operating income margin (operating income divided by revenues) 30.2% 30.2% 31.2% 31.2% ============= ============= ============== ============= Operating cash flow margin (operating cash flow divided by revenues) 52.0% 52.0% 52.7% 52.7% ============= ============= ============== ============= Free cash flow (prior to debt service requirements and dividends) Net income $ 164,734 (375)(1) 165,109 166,563 166,563 Add: Depreciation and amortization 262,627 262,627 257,743 257,743 Less: Capital expenditures (176,914) (176,914) (156,014) (156,014) ------------- ----------- ------------- ------------- ----------- ------------- Free cash flow $ 250,447 (375) 250,822 268,292 268,292 ============= =========== ============= ============= =========== ============= Free cash flow $ 250,447 268,292 Income from unconsolidated cellular entity (2,037) (4,185) Deferred income taxes 25,947 57,038 Changes in current assets and current liabilities 18,954 32,270 Increase in other noncurrent assets (1,477) (17,909) Decrease in other noncurrent liabilities (584) (3,544) Retirement benefits 12,517 17,863 Other, net (1,768) (2,481) Add: Capital expenditures 176,914 156,014 ------------- -------------- Net cash provided by operating activities $ 478,913 503,358 ============= ==============
NONRECURRING ITEMS (1) - Includes (i) $3.7 million after-tax expense related to purchasing and retiring approximately $400 million of Series J notes, net of (ii) $3.3 million net benefit related to the settlement of various income tax audits. -----END PRIVACY-ENHANCED MESSAGE-----