MONROE, La.--(BUSINESS WIRE)--Oct. 30, 2003--In BW5330 issued Oct.
30, 2003: The heading in the second table titled "Consolidated
Statements of Income" should read: Three Months ended September 30,
2002 (sted: Three Months ended September 30, 2003).
The corrected release reads:
CENTURYTEL ANNOUNCES THIRD QUARTER EARNINGS
CenturyTel, Inc.
(NYSE Symbol:CTL) announces operating results for
third quarter 2003.
-- Revenues from continuing operations, excluding nonrecurring
items, increased 13.5% to $603.8 million from $532.1 million,
while GAAP revenues from continuing operations increased 15.1%
to $603.8 million from $524.5 million.
-- Operating Cash Flow (OCF) from continuing operations (defined
as operating income plus depreciation and amortization),
excluding nonrecurring items, rose 12.7% to $307.6 million.
-- Net income, excluding nonrecurring items, grew 9.1% to $88.5
million. Reported under GAAP, net income was $91.0 million.
-- Diluted earnings per share, excluding nonrecurring items,
increased 7.0% to $.61, while GAAP diluted earnings per share
was $.63 in third quarter 2003.
-- Free cash flow, excluding nonrecurring items, climbed to
$103.1 million from $89.9 million.
----------------------------------------------------------------------
Third Quarter Highlights (1)
(In thousands, except per share
and customer amounts)
----------------------------------------------------------------------
Quarter Ended Quarter Ended % Change
9/30/03 9/30/02
Revenues from
continuing operations $ 603,752 $ 532,142 13.5%
OCF from
continuing operations $ 307,638 $ 272,875(2) 12.7%
Income from
continuing operations $ 88,452 $ 69,558(2) 27.2%
Net Income $ 88,452 $ 81,093 9.1%
Diluted Earnings
Per Share from
continuing operations $ .61 $ .49 24.5%
Diluted Earnings
Per Share $ .61 $ .57 7.0%
Average Diluted
Shares Outstanding 145,171 142,770 1.7%
Telephone Revenues $ 521,439 $ 468,580 11.3%
Other Operations Revenues $ 82,313 $ 63,562 29.5%
----------------------------------------------------------------------
----------------------------------------------------------------------
Telephone Access Lines 2,394,623 2,437,744 (1.8)%
Long Distance Customers 745,204 584,890 27.4%
----------------------------------------------------------------------
(1) These results include adjustments for nonrecurring items and
other non-GAAP financial measures. A reconciliation of these items to
comparable GAAP measures is included in the attached financial
schedules. For 2002, these results reflect only one month of
operations of the Company's Missouri telephone properties acquired
from Verizon on August 31, 2002.
(2) Includes corporate overheads previously allocated to
discontinued operations.
"CenturyTel again achieved solid results that reflect our focus on
bringing quality communications services to customers in rural areas
and smaller cities while driving revenue and controlling costs," Glen
F. Post, III, chairman and chief executive officer, said. "We are
pleased with our ability to sustain revenue and earnings growth in the
currently challenging industry and economic environment."
Consolidated revenues from continuing operations, excluding
nonrecurring items, for the third quarter rose 13.5% to $603.8 million
from $532.1 million, primarily due to contributions from the Missouri
properties acquired from Verizon on August 31, 2002. Operating cash
flow from continuing operations, excluding nonrecurring items, grew to
$307.6 million from $272.9 million, a 12.7% increase. The Company
achieved a consolidated cash flow margin, excluding nonrecurring
items, of 51.0% for the quarter versus 51.3% in third quarter 2002.
Income from continuing operations for the quarter, excluding
nonrecurring items, increased 27.2% to $88.5 million from $69.6
million in third quarter 2002. Diluted earnings per share from
continuing operations, excluding nonrecurring items, increased 24.5%
to $.61 from $.49. Diluted earnings per share, excluding nonrecurring
items, were $.61 in third quarter 2003 compared to $.57 in third
quarter 2002.
Telephone revenues, excluding nonrecurring items, for third
quarter reached $521.4 million, an 11.3% increase over $468.6 million
in third quarter 2002. The Verizon Missouri properties acquired August
31, 2002, contributed $44.5 million of the increase. The remaining
increase resulted primarily from growth in vertical services and
access revenues that more than offset revenue declines due to access
line losses. Telephone operating expenses increased primarily due to
the Verizon Missouri acquisition. Telephone operating income,
excluding nonrecurring items, increased 13.4% to $172.6 million from
$152.3 million, and telephone operating cash flow, excluding
nonrecurring items, rose 10.8% to $284.3 million from $256.6 million a
year ago. CenturyTel's third quarter 2003 telephone cash flow margin
was 54.5% while the operating income margin was 33.1%.
Other operations revenues grew 29.5% to $82.3 million during third
quarter 2003, compared with $63.6 million in third quarter 2002.
CenturyTel's long distance revenues increased 14.2% to $45.2 million.
Internet revenues increased 36.5% to $20.5 million in third quarter
2003 from $15.0 million in third quarter 2002. CenturyTel now serves
more than 745,200 long distance customers and 76,300 DSL customers,
adding more than 24,800 and 8,300 customers, respectively, during the
quarter. Fiber transport revenues increased $6.9 million, primarily
due to the June 2003 acquisition of fiber assets from Digital
Teleport, Inc.
"People in rural areas want and need advanced communications
services similar to those in urban areas. In our markets, we are
working to position CenturyTel as the carrier of choice for broadband
and other services, which is reflected in CenturyTel's record DSL
additions of more than 8,300 customers during the third quarter," Post
said.
Under generally accepted accounting principles (GAAP), the
Company's net income was $91.0 million compared to $607.7 million in
2002, while diluted earnings per share was $.63 for third quarter 2003
compared to $4.26 in third quarter 2002. Net income in third quarter
2003 included a net nonrecurring $2.5 million benefit from out of
period income tax adjustments. Net income in third quarter 2002
included a $551.4 million after-tax gain on the sale of its wireless
operations. See the accompanying financial information for additional
nonrecurring items that affected the third quarters and first nine
months of 2003 and 2002.
For the first nine months of 2003, results from continuing
operations benefited from the Alabama and Missouri wireline properties
acquired from Verizon in third quarter 2002. Revenues from continuing
operations, excluding nonrecurring items, increased to $1.774 billion
from $1.394 billion for the same period in 2002, a 27.3% increase.
Operating cash flow from continuing operations, excluding nonrecurring
items, was $910.6 million for the first nine months of 2003 compared
to $702.7 million a year ago, a 29.6% increase. Income from continuing
operations, excluding nonrecurring items, increased 56.9% to $256.5
million from $163.4 million in 2002.
For the fourth quarter 2003, CenturyTel expects total revenues of
$600 to $615 million and diluted earnings per share of $.58 to $.62.
For the full year 2003, diluted earnings per share is expected to be
in the range of $2.36 to $2.40, increased from our previous guidance
of $2.28 to $2.34. The increase in 2003 earnings per share guidance is
driven by our third quarter results exceeding our expectations.
These outlook figures are presented on a GAAP basis, excluding
nonrecurring items and the potential impact of 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 to identify 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 on 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.
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 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; the risks inherent in rapid technological change; the effects
of ongoing changes in the regulation of the communications industry;
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 product or service offerings on a timely and
cost-effective basis; the Company's ability to collect its receivables
from financially troubled communications companies; and the effects of
more general factors such as changes in interest rates, in general
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, 2002. 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 October 30, 2003. The
Company undertakes no obligation to update any of its forward-looking
statements.
CenturyTel's management will host a conference call at 10:30 A.M.
Central time today. Interested parties can access the call by dialing
800.346.2923 and the call will be accessible for replay until 1:30
p.m. CST, November 3, 2003, by calling 800.332.6854 and entering the
conference-id number: 3383. Investors can also listen to 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,
long distance, Internet access and data services to more than 3
million 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 SEPTEMBER 30, 2003 AND 2002
(UNAUDITED)
Three months ended September 30, 2003
--------------------------------------
As
Less adjusted
non- excluding
As recurring non-
In thousands, except per share amounts reported items recurring
items
--------- ---------- ---------
TELEPHONE OPERATIONS
Operating revenues
Local service $ 188,951 - 188,951
Network access 287,191 - 287,191
Other 45,297 - 45,297
--------- ---------- ----------
521,439 - 521,439
--------- ---------- ----------
Operating expenses
Plant operations 130,098 - 130,098
Customer operations 41,101 - 41,101
Corporate and other 65,931 - 65,931
Depreciation and amortization 111,666 - 111,666
--------- ---------- ----------
348,796 - 348,796
--------- ---------- ----------
Telephone operating income 172,643 - 172,643
--------- ---------- ----------
OTHER OPERATIONS
Operating revenues
Long distance 45,207 - 45,207
Internet 20,469 - 20,469
Other 16,637 - 16,637
--------- ---------- ----------
82,313 - 82,313
--------- ---------- ----------
Operating expenses
Cost of sales and other 58,984 - 58,984
Depreciation and amortization 5,191 - 5,191
--------- ---------- ----------
64,175 - 64,175
--------- ---------- ----------
Other operating income 18,138 - 18,138
--------- ---------- ----------
Corporate overhead costs
allocable to discontinued operations - - -
--------- ---------- ----------
TOTAL OPERATING INCOME 190,781 - 190,781
OTHER INCOME (EXPENSE)
Interest expense (54,360) - (54,360)
Income from unconsolidated cellular
entity 1,736 - 1,736
Other income and expense (1,076) - (1,076)
Income tax expense (46,102) 2,527(1) (48,629)
--------- ---------- ----------
INCOME FROM CONTINUING OPERATIONS 90,979 2,527 88,452
DISCONTINUED OPERATIONS, NET OF TAX - - -
--------- ---------- ----------
NET INCOME $ 90,979 2,527 88,452
========= ========== ==========
BASIC EARNINGS PER SHARE
From continuing operations $ 0.63 0.02 0.61
From discontinued operations $ - - -
Basic earnings per share $ 0.63 0.02 0.61
DILUTED EARNINGS PER SHARE
From continuing operations $ 0.63 0.02 0.61
From discontinued operations $ - - -
Diluted earnings per share $ 0.63 0.02 0.61
SHARES OUTSTANDING
Basic 143,897 143,897
Diluted 145,171 145,171
DIVIDENDS PER COMMON SHARE $ 0.0550 0.0550
NONRECURRING ITEMS
Three months ended September 30, 2002
--------------------------------------
As
Less adjusted
non- excluding
As recurring non-
In thousands, except per share amounts reported items recurring
items
--------- ---------- ----------
TELEPHONE OPERATIONS
Operating revenues
Local service 169,098 - 169,098
Network access 249,047 (7,645)(2) 256,692
Other 42,790 - 42,790
--------- ---------- ----------
460,935 (7,645) 468,580
--------- ---------- ----------
Operating expenses
Plant operations 117,997 - 117,997
Customer operations 41,161 - 41,161
Corporate and other 52,774 - 52,774
Depreciation and amortization 104,384 - 104,384
--------- ---------- ----------
316,316 - 316,316
--------- ---------- ----------
Telephone operating income 144,619 (7,645) 152,264
--------- ---------- ----------
OTHER OPERATIONS
Operating revenues
Long distance 39,592 - 39,592
Internet 14,996 - 14,996
Other 8,974 - 8,974
--------- ---------- ----------
63,562 - 63,562
--------- ---------- ----------
Operating expenses
Cost of sales and other 45,992 - 45,992
Depreciation and amortization 3,130 - 3,130
--------- ---------- ----------
49,122 - 49,122
--------- ---------- ----------
Other operating income 14,440 - 14,440
--------- ---------- ----------
Corporate overhead costs
allocable to discontinued operations (1,343) - (1,343)
--------- ---------- ----------
TOTAL OPERATING INCOME 157,716 (7,645) 165,361
OTHER INCOME (EXPENSE)
Interest expense (60,021) - (60,021)
Income from unconsolidated cellular
entity 1,492 - 1,492
Other income and expense (573) - (573)
Income tax expense (34,025) 2,676(3) (36,701)
--------- ---------- ----------
INCOME FROM CONTINUING OPERATIONS 64,589 (4,969) 69,558
DISCONTINUED OPERATIONS, NET OF TAX 543,160 531,625(4) 11,535
--------- ---------- ----------
NET INCOME 607,749 526,656 81,093
========= ========== ==========
BASIC EARNINGS PER SHARE
From continuing operations 0.46 (0.04) 0.49
From discontinued operations 3.83 3.75 0.08
Basic earnings per share 4.29 3.72 0.57
DILUTED EARNINGS PER SHARE
From continuing operations 0.45 (0.03) 0.49
From discontinued operations 3.80 3.72 0.08
Diluted earnings per share 4.26 3.69 0.57
SHARES OUTSTANDING
Basic 141,692 141,692
Diluted 142,770 142,770
DIVIDENDS PER COMMON SHARE 0.0525 0.0525
NONRECURRING ITEMS
Increase
Increase (decrease)
(decrease) excluding
as nonrecurring
reported items
In thousands, except per share amounts ---------- -----------
TELEPHONE OPERATIONS
Operating revenues
Local service 11.7% 11.7%
Network access 15.3% 11.9%
Other 5.9% 5.9%
13.1% 11.3%
Operating expenses
Plant operations 10.3% 10.3%
Customer operations (0.1%) (0.1%)
Corporate and other 24.9% 24.9%
Depreciation and amortization 7.0% 7.0%
10.3% 10.3%
Telephone operating income 19.4% 13.4%
OTHER OPERATIONS
Operating revenues
Long distance 14.2% 14.2%
Internet 36.5% 36.5%
Other 85.4% 85.4%
29.5% 29.5%
Operating expenses
Cost of sales and other 28.2% 28.2%
Depreciation and amortization 65.8% 65.8%
30.6% 30.6%
Other operating income 25.6% 25.6%
Corporate overhead costs
allocable to discontinued operations (100.0%) (100.0%)
TOTAL OPERATING INCOME 21.0% 15.4%
OTHER INCOME (EXPENSE)
Interest expense (9.4%) (9.4%)
Income from unconsolidated cellular entity 16.4% 16.4%
Other income and expense 87.8% 87.8%
Income tax expense 35.5% 32.5%
INCOME FROM CONTINUING OPERATIONS 40.9% 27.2%
DISCONTINUED OPERATIONS, NET OF TAX (100.0%) (100.0%)
NET INCOME (85.0%) 9.1%
BASIC EARNINGS PER SHARE
From continuing operations 37.0% 24.5%
From discontinued operations (100.0%) (100.0%)
Basic earnings per share (85.3%) 7.0%
DILUTED EARNINGS PER SHARE
From continuing operations 40.0% 24.5%
From discontinued operations (100.0%) (100.0%)
Diluted earnings per share (85.2%) 7.0%
SHARES OUTSTANDING
Basic 1.6% 1.6%
Diluted 1.7% 1.7%
DIVIDENDS PER COMMON SHARE 4.8% 4.8%
NONRECURRING ITEMS
(1) - Net out of period income tax adjustments.
(2) - Reserve for refunds of access charges to interexchange carriers.
(3) - Tax effect of item (2).
(4) - Gain on sale of wireless operations ($551.4 million after tax),
net of write down of wireless portion of billing system ($19.8
million after tax).
CenturyTel, Inc.
CONSOLIDATED STATEMENTS OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
(UNAUDITED)
Nine months ended
September 30, 2003
--------------------------------
As
Less adjusted
non- excluding
As recurring non-
In thousands, except per share reported items recurring
amounts items
---------- ---------- ----------
TELEPHONE OPERATIONS
Operating revenues
Local service $ 565,599 - 565,599
Network access 845,999 - 845,999
Other 136,191 - 136,191
---------- ---------- ----------
1,547,789 - 1,547,789
---------- ---------- ----------
Operating expenses
Plant operations 378,587 - 378,587
Customer operations 124,068 - 124,068
Corporate and other 189,284 (4,959)(1) 194,243
Depreciation and amortization 337,250 - 337,250
---------- ---------- ----------
1,029,189 (4,959) 1,034,148
---------- ---------- ----------
Telephone operating income 518,600 4,959 513,641
---------- ---------- ----------
OTHER OPERATIONS
Operating revenues
Long distance 130,968 - 130,968
Internet 58,345 - 58,345
Other 37,328 - 37,328
---------- ---------- ----------
226,641 - 226,641
---------- ---------- ----------
Operating expenses
Cost of sales and other 166,896 - 166,896
Depreciation and amortization 14,410 - 14,410
---------- ---------- ----------
181,306 - 181,306
---------- ---------- ----------
Other operating income 45,335 - 45,335
---------- ---------- ----------
Corporate overhead costs
allocable to discontinued
operations - - -
---------- ---------- ----------
TOTAL OPERATING INCOME 563,935 4,959 558,976
OTHER INCOME (EXPENSE)
Interest expense (165,909) - (165,909)
Income from unconsolidated cellular
entity 4,895 - 4,895
Nonrecurring gains and losses - - -
Other income and expense (1,034) - (1,034)
Income tax expense (139,622) 791(2) (140,413)
---------- ---------- ----------
INCOME FROM CONTINUING OPERATIONS 262,265 5,750 256,515
DISCONTINUED OPERATIONS, NET OF TAX - - -
---------- ---------- ----------
NET INCOME $ 262,265 5,750 256,515
========== ========== ==========
BASIC EARNINGS PER SHARE
From continuing operations $ 1.83 0.04 1.79
From discontinued operations $ - - -
Basic earnings per share $ 1.83 0.04 1.79
DILUTED EARNINGS PER SHARE
From continuing operations $ 1.82 0.04 1.78
From discontinued operations $ - - -
Diluted earnings per share $ 1.82 0.04 1.78
SHARES OUTSTANDING
Basic 143,370 143,370
Diluted 144,481 144,481
DIVIDENDS PER COMMON SHARE $ 0.1650 0.1650
NONRECURRING ITEMS
Nine months ended
September 30, 2002
--------------------------------
As
adjusted
Less excluding
non- non-
As recurring recurring
In thousands, except per share reported items items
amounts
---------- ---------- ----------
TELEPHONE OPERATIONS
Operating revenues
Local service 418,332 - 418,332
Network access 686,325 (7,645)(3) 693,970
Other 109,508 - 109,508
---------- ---------- ----------
1,214,165 (7,645) 1,221,810
---------- ---------- ----------
Operating expenses
Plant operations 305,230 - 305,230
Customer operations 103,484 - 103,484
Corporate and other 155,269 15,000(4) 140,269
Depreciation and amortization 283,886 - 283,886
---------- ---------- ----------
847,869 15,000 832,869
---------- ---------- ----------
Telephone operating income 366,296 (22,645) 388,941
---------- ---------- ----------
OTHER OPERATIONS
Operating revenues
Long distance 105,871 - 105,871
Internet 42,263 - 42,263
Other 23,818 - 23,818
---------- ---------- ----------
171,952 - 171,952
---------- ---------- ----------
Operating expenses
Cost of sales and other 130,818 - 130,818
Depreciation and amortization 9,859 - 9,859
---------- ---------- ----------
140,677 - 140,677
---------- ---------- ----------
Other operating income 31,275 - 31,275
---------- ---------- ----------
Corporate overhead costs
allocable to discontinued operations (11,275) - (11,275)
---------- ---------- ----------
TOTAL OPERATING INCOME 386,296 (22,645) 408,941
OTHER INCOME (EXPENSE)
Interest expense (164,826) - (164,826)
Income from unconsolidated cellular
entity 3,852 - 3,852
Nonrecurring gains and losses 3,709 3,709(5) -
Other income and expense (356) (3,000)(6) 2,644
Income tax expense (79,487) 7,678(7) (87,165)
---------- ---------- ----------
INCOME FROM CONTINUING OPERATIONS 149,188 (14,258) 163,446
DISCONTINUED OPERATIONS, NET OF TAX 608,091 531,625(8) 76,466
-------- ---------- ----------
NET INCOME 757,279 517,367 239,912
========== ========== ==========
BASIC EARNINGS PER SHARE
From continuing operations 1.05 (0.10) 1.15
From discontinued operations 4.30 3.76 0.54
Basic earnings per share 5.36 3.66 1.70
DILUTED EARNINGS PER SHARE
From continuing operations 1.05 (0.10) 1.15
From discontinued operations 4.26 3.73 0.54
Diluted earnings per share 5.31 3.63 1.68
SHARES OUTSTANDING
Basic 141,324 141,324
Diluted 142,710 142,710
DIVIDENDS PER COMMON SHARE 0.1575 0.1575
NONRECURRING ITEMS
Increase
Increase (decrease)
(decrease) excluding
In thousands, except per share amounts as nonrecurring
reported items
----------- -------------
TELEPHONE OPERATIONS
Operating revenues
Local service 35.2% 35.2%
Network access 23.3% 21.9%
Other 24.4% 24.4%
27.5% 26.7%
Operating expenses
Plant operations 24.0% 24.0%
Customer operations 19.9% 19.9%
Corporate and other 21.9% 38.5%
Depreciation and amortization 18.8% 18.8%
21.4% 24.2%
Telephone operating income 41.6% 32.1%
OTHER OPERATIONS
Operating revenues
Long distance 23.7% 23.7%
Internet 38.1% 38.1%
Other 56.7% 56.7%
31.8% 31.8%
Operating expenses
Cost of sales and other 27.6% 27.6%
Depreciation and amortization 46.2% 46.2%
28.9% 28.9%
Other operating income 45.0% 45.0%
Corporate overhead costs
allocable to discontinued operations (100.0%) (100.0%)
TOTAL OPERATING INCOME 46.0% 36.7%
OTHER INCOME (EXPENSE)
Interest expense 0.7% 0.7%
Income from unconsolidated cellular entity 27.1% 27.1%
Nonrecurring gains and losses (100.0%) -%
Other income and expense 190.4% (139.1%)
Income tax expense 75.7% 61.1%
INCOME FROM CONTINUING OPERATIONS 75.8% 56.9%
DISCONTINUED OPERATIONS, NET OF TAX (100.0%) (100.0%)
NET INCOME (65.4%) 6.9%
BASIC EARNINGS PER SHARE
From continuing operations 74.3% 55.7%
From discontinued operations (100.0%) (100.0%)
Basic earnings per share (65.9%) 5.3%
DILUTED EARNINGS PER SHARE
From continuing operations 73.3% 54.8%
From discontinued operations (100.0%) (100.0%)
Diluted earnings per share (65.7%) 6.0%
SHARES OUTSTANDING
Basic 1.4% 1.4%
Diluted 1.2% 1.2%
DIVIDENDS PER COMMON SHARE 4.8% 4.8%
NONRECURRING ITEMS
(1) - Partial recovery of amounts previously written off in
connection with WorldCom bankruptcy. See Note 4.
(2) - Net out of period income tax adjustments ($2.5 million credit),
net of tax expense effect of item (1).
(3) - Reserve for refunds of access charges to interexchange
carriers.
(4) - Reserve for uncollectible receivables, primarily WorldCom.
(5) - Gain on sale of PCS license.
(6) - Costs to defend unsolicited takeover proposal.
(7) - Tax effect of items (3) through (6).
(8) - Gain on sale of wireless operations ($551.4 million after-tax),
net of write down of wireless portion of billing system ($19.8
million after-tax).
CenturyTel, Inc.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2003 AND DECEMBER 31, 2002
(UNAUDITED)
Sept. 30, Dec. 31,
2003 2002
----------- -----------
(in thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 157,944 3,661
Other current assets 265,057 292,241
----------- -----------
Total current assets 423,001 295,902
----------- -----------
PROPERTY, PLANT AND EQUIPMENT
Telephone 6,536,888 6,347,900
Other 566,045 521,292
Accumulated depreciation (3,647,723) (3,337,547)
----------- -----------
Net property, plant and equipment 3,455,210 3,531,645
----------- -----------
INVESTMENTS AND OTHER ASSETS
Goodwill 3,429,479 3,427,281
Other 504,131 515,580
----------- -----------
Total investments and other assets 3,933,610 3,942,861
----------- -----------
TOTAL ASSETS $ 7,811,821 7,770,408
=========== ===========
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Current maturities of long-term debt $ 115,167 70,737
Other current liabilities 419,850 317,367
----------- -----------
Total current liabilities 535,017 388,104
LONG-TERM DEBT 3,119,378 3,578,132
DEFERRED CREDITS AND OTHER LIABILITIES 795,853 716,168
STOCKHOLDERS' EQUITY 3,361,573 3,088,004
----------- -----------
TOTAL LIABILITIES AND EQUITY $ 7,811,821 7,770,408
=========== ===========
CAPITAL EXPENDITURES
NINE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
Nine months ended
September 30, Increase
2003 2002 (decrease)
----------- ----------- ----------
(in thousands)
CAPITAL EXPENDITURES
Telephone $ 216,448 221,327 (2.2%)
Wireless (discontinued operations) - 27,242 (100.0%)
Other 40,011 49,447 (19.1%)
----------- -----------
Total capital expenditures $ 256,459 298,016 (13.9%)
=========== ===========
CAPITAL EXPENDITURES
THREE MONTHS ENDED SEPTEMBER 30, 2003 AND 2002
Three months ended
September 30, Increase
2003 2002 (decrease)
----------------------------------
(in thousands)
CAPITAL EXPENDITURES
Telephone $ 85,050 75,505 12.6%
Wireless (discontinued operations) - 6,978 (100.0%)
Other 17,151 16,235 5.6%
------------------------
Total capital expenditures $ 102,201 98,718 3.5%
========================
CenturyTel, Inc.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
Three months ended
September 30, 2003
-------------------------------
As
adjusted
Less excluding
non- non-
As recurring recurring
reported items items
----------------- ----------
Consolidated operating cash flow from continuing
operations and cash flow margin
Operating income $ 190,781 - 190,781
Add: Depreciation and amortization 116,857 - 116,857
--------- ------- ----------
Consolidated operating cash flow
from continuing operations $ 307,638 - 307,638
========= ======= ==========
Revenues from continuing operations $ 603,752 - 603,752
========= ======= ==========
Consolidated cash flow margin
(operating cash flow divided by
revenues) 51.0% 51.0%
========= ==========
Telephone operating cash flow, operating income margin
and cash flow margin
Telephone operating income $ 172,643 - 172,643
Add: Depreciation and amortization 111,666 - 111,666
--------- ------- ----------
Telephone operating cash flow $ 284,309 - 284,309
========= ======= ==========
Telephone revenues $ 521,439 - 521,439
========= ======= ==========
Telephone operating income margin
(operating income divided by
revenues) 33.1% 33.1%
========= ==========
Telephone cash flow margin (operating
cash flow divided by revenues) 54.5% 54.5%
========= ==========
Other Operations operating cash flow, operating income margin and
cash flow margin
Other Operations operating income $ 18,138 - 18,138
Add: Depreciation and amortization 5,191 - 5,191
--------- ------- ----------
Other Operations operating cash flow$ 23,329 - 23,329
========= ======= ==========
Other Operations revenues $ 82,313 - 82,313
========= ======= ==========
Other Operations operating income
margin (operating income divided by
revenues) 22.0% 22.0%
========= ==========
Other Operations cash flow margin
(operating cash flow divided by
revenues) 28.3% 28.3%
========= ==========
Free cash flow (prior to debt service
requirements)
Net income $ 90,979 2,527(1) 88,452
Add: Depreciation and amortization 116,857 - 116,857
Less: Capital expenditures (4) (102,201) - (102,201)
--------- ------- ----------
Free cash flow $ 105,635 2,527 103,108
========= ======= ==========
Free cash flow $ 105,635
Income from discontinued operations,
net of tax -
Income from unconsolidated cellular
entity (1,736)
Deferred income taxes 24,181
Changes in current assets and
current liabilities 12,604
Increase in other noncurrent assets (6,779)
Increase in other noncurrent
liabilities (1,277)
Other, net 14,520
Add: capital expenditures 102,201
---------
Net cash provided by operating
activities from continuing
operations $ 249,349
=========
Three months ended
September 30, 2002
-------------------------------
As
adjusted
Less excluding
non- non-
As recurring recurring
reported items items
--------- --------- ---------
Consolidated operating cash flow from
continuing operations and cash flow margin
Operating income 157,716 (7,645)(2) 165,361
Add: Depreciation and amortization 107,514 - 107,514
--------- -------- ----------
Consolidated operating cash flow from
continuing operations 265,230 (7,645) 272,875
========= ======== ==========
Revenues from continuing operations 524,497 (7,645) 532,142
========= ======== ==========
Consolidated cash flow margin (operating
cash flow divided by revenues) 50.6% 51.3%
===== ==========
Telephone operating cash flow, operating
income margin and cash flow margin
Telephone operating income 144,619 (7,645)(2) 152,264
Add: Depreciation and amortization 104,384 - 104,384
--------- -------- ----------
Telephone operating cash flow 249,003 (7,645) 256,648
========= ======== ==========
Telephone revenues 460,935 (7,645) 468,580
========= ======== ==========
Telephone operating income margin
(operating income divided by revenues) 31.4% 32.5%
===== ==========
Telephone cash flow margin (operating
cash flow divided by revenues) 54.0% 54.8%
===== ==========
Other Operations operating cash flow,
operating income margin and cash flow margin
Other Operations operating income 14,440 - 14,440
Add: Depreciation and amortization 3,130 - 3,130
--------- -------- ----------
Other Operations operating cash flow 17,570 - 17,570
========= ======== ==========
Other Operations revenues 63,562 - 63,562
========= ======== ==========
Other Operations operating income margin
(operating income divided by revenues) 22.7% 22.7%
===== ==========
Other Operations cash flow margin
(operating cash flow divided by
revenues) 27.6% 27.6%
===== ==========
Free cash flow (prior to debt service
requirements)
Net income 607,749 526,656(3) 81,093
Add: Depreciation and amortization 107,514 - 107,514
Less: Capital expenditures (4) (98,718) - (98,718)
--------- -------- ----------
Free cash flow 616,545 526,656 89,889
========= ======== ==========
Free cash flow 616,545
Income from discontinued operations,
net of tax (543,160)
Income from unconsolidated cellular
entity (1,492)
Deferred income taxes 14,084
Changes in current assets and current
liabilities 32,686
Increase in other noncurrent assets (9,154)
Increase in other noncurrent
liabilities 19,456
Other, net 29,059
Add: capital expenditures 98,718
---------
Net cash provided by operating
activities from continuing
operations 256,742
=========
(1) Net out of period income tax adjustments.
(2) Reserve for refunds of access charges to interexchange carriers.
(3) Gain on sale of wireless operations ($551.4 million after tax),
net of write down of wireless portion of billing system ($19.8
million after tax) and reserve for refunds of access charges to
interexchange carriers ($5.0 million after tax).
(4) Includes discontinued operations for 2002.
CenturyTel, Inc.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
Nine months ended
September 30, 2003
------------------------------
As
adjusted
Less excluding
non- non-
As recurring recurring
reported items items
--------- -------- ----------
Consolidated operating cash flow from continuing operations
and cash flow margin
Operating income $ 563,935 4,959(1) 558,976
Add: Depreciation and amortization 351,660 - 351,660
-------- --------- ---------
Consolidated operating cash flow from
continuing operations $ 915,595 4,959 910,636
======== ========= =========
Revenues from continuing operations $1,774,430 - 1,774,430
======== ========= =========
Consolidated cash flow margin
(operating cash flow divided by
revenues) 51.6% 51.3%
====== =========
Telephone operating cash flow, operating income margin
and cash flow margin
Telephone operating income $ 518,600 4,959 (1) 513,641
Add: Depreciation and amortization 337,250 - 337,250
--------- ---------- ---------
Telephone operating cash flow $ 855,850 4,959 850,891
======== ========= =========
Telephone revenues $1,547,789 - 1,547,789
======== ========= =========
Telephone operating income margin
(operating income divided by revenues) 33.5% 33.2%
======== =========
Telephone cash flow margin (operating
cash flow divided by revenues) 55.3% 55.0%
======== =========
Other Operations operating cash flow, operating income margin and
cash flow margin
Other Operations operating income $ 45,335 - 45,335
Add: Depreciation and amortization 14,410 - 14,410
---------- ------- --------
Other Operations operating cash flow $ 59,745 - 59,745
========== ======= ========
Other Operations revenues $ 226,641 - 226,641
========== ======= ========
Other Operations operating income
margin (operating income divided by
revenues) 20.0% 20.0%
========== ==========
Other Operations cash flow margin
(operating cash flow divided by
revenues) 26.4% 26.4%
========== ==========
Free cash flow (prior to debt service
requirements)
Net income $ 262,265 5,750 (2) 256,515
Add: Depreciation and amortization
(6) 351,660 - 351,660
Less: Capital expenditures (6) (256,459) - (256,459)
---------- ------- ----------
Free cash flow $ 357,466 5,750 351,716
========== ======= ==========
Free cash flow $ 357,466
Income from discontinued operations,
net of tax -
Less: depreciation and amortization of
discontinued operations -
Nonrecurring gains and losses -
Income from unconsolidated cellular
entity (4,895)
Deferred income taxes 68,022
Changes in current assets and current
liabilities 128,547
Increase in other noncurrent assets (18,280)
Increase in other noncurrent
liabilities 7,047
Other, net 34,056
Add: capital expenditures 256,459
----------
Net cash provided by operating
activities from continuing operations$ 828,422
==========
Nine months ended
September 30, 2002
--------------------------------
As
adjusted
Less excluding
non- non-
As recurring recurring
reported items items
---------- -------- ----------
Consolidated operating cash flow from
continuing operations and cash flow margin
Operating income 386,296 (22,645)(3) 408,941
Add: Depreciation and amortization 293,745 - 293,745
---------- -------- ----------
Consolidated operating cash flow
from continuing operations 680,041 (22,645) 702,686
========== ======== ==========
Revenues from continuing operations 1,386,117 (7,645)(4)1,393,762
========== ======== ==========
Consolidated cash flow margin
(operating cash flow divided by
revenues) 49.1% 50.4%
======== ==========
Telephone operating cash flow, operating
income margin and cash flow margin
Telephone operating income 366,296 (22,645)(3) 388,941
Add: Depreciation and amortization 283,886 - 283,886
---------- -------- ----------
Telephone operating cash flow 650,182 (22,645) 672,827
========== ======== ==========
Telephone revenues 1,214,165 (7,645)(4)1,221,810
========== ======== ==========
Telephone operating income margin
(operating income divided by
revenues) 30.2% 31.8%
======== ==========
Telephone cash flow margin (operating
cash flow divided by revenues) 53.5% 55.1%
======== ==========
Other Operations operating cash flow,
operating income margin and cash flow margin
Other Operations operating income 31,275 - 31,275
Add: Depreciation and amortization 9,859 - 9,859
---------- -------- ----------
Other Operations operating cash flow 41,134 - 41,134
========== ======== ==========
Other Operations revenues 171,952 - 171,952
========== ======== ==========
Other Operations operating income
margin (operating income divided by
revenues) 18.2% 18.2%
======== ==========
Other Operations cash flow margin
(operating cash flow divided by
revenues) 23.9% 23.9%
======== ==========
Free cash flow (prior to debt service
requirements)
Net income 757,279 517,367 (5) 239,912
Add: Depreciation and amortization
(6) 306,639 - 306,639
Less: Capital expenditures (6) (298,016) - (298,016)
---------- -------- ----------
Free cash flow 765,902 517,367 248,535
========== ======== ==========
Free cash flow 765,902
Income from discontinued operations,
net of tax (608,091)
Less: depreciation and amortization of
discontinued operations (12,894)
Nonrecurring gains and losses (3,709)
Income from unconsolidated cellular
entity (3,852)
Deferred income taxes 43,343
Changes in current assets and
current liabilities 104,722
Increase in other noncurrent assets (23,562)
Increase in other noncurrent
liabilities 31,849
Other, net 43,315
Add: capital expenditures 298,016
----------
Net cash provided by operating
activities from continuing
operations 635,039
==========
(1) Partial recovery of amounts previously written off in connection
with WorldCom bankruptcy. See Note 3.
(2) Net out of period income tax adjustments ($2.5 million credit)
and after-tax effect of item (1).
(3) Reserve for refunds of access charges to interexchange carriers
($7.6 million) and reserve for uncollectible receivables,
primarily WorldCom ($15.0 million).
(4) Reserve for refunds of access charges to interexchange carriers.
(5) Includes gain on sale of wireless operations ($551.4 million
after tax) and gain on sale of a PCS license ($2.4 million after
tax). Such favorable items were partially offset by unfavorable
charges for reserve for refunds of access charges to interexchange
carriers ($5.0 million after tax), reserve for uncollectible
receivables, primarily WorldCom ($9.8 million after tax), costs to
defend unsolicited takeover proposal ($2.0 million after tax) and
write down of wireless portion of billing system ($19.8 million
after tax).
(6) Includes discontinued operations for 2002.
NOTE: A spreadsheet is available at URL:
http://www.businesswire.com/cgi-bin/photo.cgi?pw.103003/bb5
CONTACT: CenturyTel, Inc.
Media: Patricia Cameron, 318-388-9674
patricia.cameron@centurytel.com
or
Investors: Tony Davis, 318-388-9525
tony.davis@centurytel.com
SOURCE: CenturyTel, Inc.